IMAX Larger Than Life Essay Example

provide statistics for the third category, the article depicts that the 40-59-year-olds, the aging baby boomers, represent around 25% of admissions (Movie Theaters p. 493). Additionally in the case, the author mentions some characteristics of the audience. School groups correspond to more than 20% of IMAX audiences. The majority of the audience is at least college- or university-educated and earns on average a yearly income of more than $70,000 (IMAX p. 0).

Since IMAX mainly produced educational movies at the time of the statistics, the characteristics of an audience can be justified because educated parents see IMAX as an opportunity for their kids to learn and have fun at the same time. It is anticipated that the demographics would change since the company developed the MPX technology that allowed major theater chains such as Regal and AMC to convert to the IMAX format. As a result, this segment will change if the company chooses to increase the number of Hollywood movies in its format.

In the article, the author mentions that the cinema industry needs to cope with the changing audience demographics. The problem exists because “young people today have very different perceptions about entertainment, and value their mobile phones and Internet access over TV” (Movie theater p. 495). Thus, he is underlining the importance of targeting the so-called baby boomers and facing the change. It is because the segment aged 12-24 years has declined 22% in the interval from 1975 to 2005 (Movie theater p. 493).

Additionally, the author points out that “people 50 and over control 75% of the net worth of US households” emphasizing a wake-up call to cinema operators (Movie theater p. 495). However,

I believe that the previous segment will always remain the dominant one for several reasons. In looking at the segment aged 12-24 years, it’s important to at least divide it into two separate groups; high school and college students. High school students are frequent visitors to the theaters because they do not have many alternatives to choose from in going out on the weekends.

In other words, entertainment alternatives such as ice skating, going to amusement parks, bowling… etc. exist by they are somewhat limited. Therefore, the cinema option is an easily accessible and affordable one. On the other hand, college students have more alternatives such as going to sports games, hosting parties, and enjoying the nightlife. However, not every weekend revolves around those activities given that some weekends are quieter and more relaxed. They can also be constrained by financial factors as well since enjoying the nightlife is costlier than the movies.

Therefore, both groups of this segment will remain dominant in terms of movie attendance. Sociocultural Segment Regarding the sociocultural segment, the case touches upon that the screening of the IMAX movie Volcanoes of the Deep Sea was prevented due to the protest of religious groups. These groups “were offended by the position on, and depiction of, evolution” (IMAX p. 9). Moreover, there are increasing concerns about violence, sex, and vulgar language not particularly in the educational movies that IMAX produces but an issue to consider in transitioning to Hollywood films.

If the clash of science and religion, and society’s non-acceptance of the level of inappropriateness in movies continue to rise, they can be an obstacle to the movie theater industry in general. Increased consumption of

educational entertainment helps IMAX to achieve growth as a niche player. The case illustrates that “ever since Sesame Street succeeded in educating and entertaining kids simultaneously, the “entertainment” market had grown” (IMAX p. 10). Other shows that followed include Barney & Friends and Teletubbies supporting the success behind educational entertainment.

The author of the case attributes this trend to the “increasing belief among parents that in a knowledge economy, their kids’ success might depend on education” (IMAX p. 10). Basically, parents aim to produce smart kids and achieve that through educational entertainment. In return, it makes it easier on the parents and can be explained by overscheduled kids and parents. On the other hand, the article discusses another sociocultural phenomenon that can be linked to people lacking time and being overscheduled. This recent phenomenon is called “hiving” and has transformed several industries such as entertainment and housing.

The author explains, “Hiving refers to social activities that bring people into contact with each other around a central home base” (Movie theaters p. 494). Although the previous definition is not so clear, it can be summarized in that people return to their homes, reestablish relationships, and reconnect with their community which mainly includes the family. The article states that “64% of participants identified themselves as ‘hivers’” (Movie theaters p. 494). Political/Legal Segment Both the case and the article touch upon some aspects of the political/legal segment.

In this case, the author mentions growing concerns regarding violence, sex, and vulgar language in movies which results in “considerable efforts to organize and lobby political action to regulate the industry” (IMAX p. 9). Further, he explains, “Tipper Gore and Lynn Cheney (spouses of

Al Gore and Dick Cheney, respectively) had worked hard to curtail the levels of [inappropriateness]” (IMAX p. 9). So if lobbying and political action succeed in forming a new law to regulate the industry, Hollywood producers and movie theaters will suffer the consequences.

In the article, the author depicts the changes in movie production and exhibition since the Studio Era. The US Supreme Court’s 1948 antitrust ruling forced Hollywood film producers to sell theater chains that they owned. In other words, the antitrust rule set precedent in that film producers cannot own theater chains. IMAX happens to be in the production and distribution industries, thus, it does not violate this regulation. Another major aspect of the political/legal segment is piracy. In the case, the author depicts that “the U. S. film industry lost more than $3 billion annually because of piracy” (IMAX p. ).

In America, piracy is taken seriously after the 1982 amendment of The Copyright Act of 1976. Violations are considered felonies and are subject to federal criminal charges and civil lawsuits. Surprisingly enough, the author uses the movie example of The Hulk which was released by pirates before it was shown in theaters. Technological Segment Since IMAX is part of the Equipment and Supplies industry, the case goes into details about the company’s technologies and innovations which can be divided into printed films, screens, projectors, glasses, sound systems, and cameras.

IMAX’s film technology uses a 15/70 mm format which is “10 times larger than the 35mm films that were used in traditional multiplexes” (IMAX p. 3). The screens on average are 88-feet-high and 120-feet-wide or use domes that are 81 feet in diameter. Moreover, the

projectors use 15,000-watt bulbs compared to 3,000-4,000 watts which the regular 35mm projectors used require IMAX projectors to have powerful cooling systems. Overall, the previous distinct characteristics enabled the viewers to enjoy brighter and sharper images compared to the conventional cinemas. In order to guarantee the quality of its projector and camera systems, the company maintains “strict quality control of components and end products [ensuring] an average service time of 99. 9 percent” (IMAX p. 3).

Another technology that the company uses to create the 3D effect is “polarized or electronic glasses that split the images for the left and right eye using liquid crystal shutter lenses” (IMAX p. 3). To accompany the 3D visuals, IMAX uses “six-channel digital audio that typically produced 12,000 watts of realistic, distortion-free sound” and “had developed a 3D directional sound technology” (IMAX p. ). Regarding the cameras, the company developed a 3D camera to shoot a movie in space that weighed 90 pounds compared to the traditional one that weighed 228 pounds.

In 2008, IMAX planned to install newly developed digital cameras and projectors that, in the long run, would help cut its operational costs. An additional example of IMAX’s technological advancement is the development of digital re-mastering technology (DMR). This technology “allowed [the company] to convert traditional 35 mm films … into the large-screen format and even develop 3D versions of [movies]” (IMAX p. ).

The author explains, “the development of this technology was critical because merely projecting a 35 mm on the large IMAX screen would have produced a grainy picture” (IMAX p. 7). It took the company more than five years to develop DMR costing millions of dollars. As

IMAX repeated the process of converting films, the costs significantly decreased over time. The costs are $22,599 to convert a standard 2D film and $45,000 to convert a 3D film. It is anticipated that by switching to the digital format which was planned in 2008, the company can further decrease costs.

The benefit associated with this technology is that IMAX can attract more studios, Hollywood mainly, to convert from 35 mm films. As a result, more theater chains would open IMAX format screens using the MPX projection system. This system “enables movie theaters to convert to IMAX at a cost that is much lower than of traditional IMAX projection system” (Movie Theater p. 497). Overall, the previously mentioned technologies show the company’s commitment to continuous innovations and efficiency; given that five percent of its sales revenue was spent on research and development in 2007.

It also had 46 patents in Canada and 7 were pending in the United States which are probably granted by now. Moreover, IMAX received an Oscar Award for Scientific and Technical Achievement in 1997. On the other hand, the article closely examines the impact of product substitutes’ technological innovations and movie theater attendance. To summarize the trend, with the introduction of commercial radio the theater admissions declined. Following WWII, movie attendance significantly increased. Then, the introduction and popularity of television in American households impacted admissions by a decrease of 20-40%.

The reason behind mentioning the previous is with the introduction of 3D televisions and affordability over time, IMAX can be negatively affected following the previous trend. Economic Segment Regarding the economic segment, the case illustrates that the United States has the highest per capita

movie attendance rate in the world. In 2007, the rate equaled to “5. 3 films a year” (IMAX p. 10). Furthermore, after excluding the people who did not see any movies in that year, the rate “rose to 8. 6 films per year” (IMAX p. 0). It also mentions that owners of theaters utilized the screening of commercials before the showing of the movie to generate more revenue. Also, “the release of big-budget franchise movies or sequels of popular movies attenuated the adverse impact of the economy on theater attendance” (IMAX p. 10). In the article, the author mentions that “[Americans] are spending more on entertainment, but social forces, as well as a technological revolution, mean we’re spending it at home” (Movie Theaters p. 494).

To support the previous statement, he further points out that “the average person now spends 50% more on DVDs than on cinema tickets” (Movie Theaters p. 494). As an explanation, the premium prices of both tickets and concessions, in addition, too noisy and rude viewers in multiplexes help in driving people to enjoy movies at home. Need not to add, the new substitute technologies and heavy discounting of DVDs by mass merchandisers. IMAX does not seem to be affected by economic factors given that, after conducting the price elasticity of demand study, audiences enjoyed the movie in the price range of $10-13 per ticket.

The previous emphasizes the company’s ability in charging higher prices. Another example of the economic segment is the economic crisis of commercial movie theater owners in the 1990s. The author of the article explains, “AMC, Cinemark, and Regal went on a building spree and bought IMAX systems to

install in their multiplexes” (IMAX p. 6). Consequently, IMAX could not escape the crisis as many theater-owners filed for bankruptcy and took a major big hit. However, the company dealt with it adequately and replaced the alliances with partnership agreements that are clearly defined.

Global Segment In the global segment, there were about 295 IMAX theaters operating in 40 countries at the end of 2008. According to the case, “almost 60 percent of the theaters [were] in North America” implying that there is room for expanding internationally (IMAX p. 2). The author of the case provides more information about the year 2007 by mentioning, “seven billion attendances and annual global box office revenues estimated at $26. 7 billion” (IMAX p. 10). The Asian-Pacific region captured the largest share of the global market.