FLASHBACK: IMAX At The Crossroads – The New DIGIMAX Revolution

Today, we look back at the industry six years ago. The following piece first appeared in Issue 4 of sfc: the magazine of special format cinema in March, 2005.  Doug Darrow’s comments on IMAX’s DLP license are from an interview conducted with Mr. Darrow for that issue.  For clarification, at the time, IMAX was in discussions with SONY to use SXRD 4K projectors in their digital systems.

While walking the floor of the Consumer Electronics Show, I was astounded when a Samsung representative proudly showed me their newest camera, the Digimax V700, capable of up to 700 pixels. But instead of being amazed by this new product, I began to wonder about potential lawsuits. Remember when IMAX threatened lawsuit against MaxImage, causing publisher James Hyder to change the newsletter’s name to Large Format Examiner? How about the famous letter from Mary Pat Ryan, encouraging exhibitors to double check their contracts with IMAX before showing such un-family fare as Haunted Castle? At this point on the CES trade floor, my mind was thinking back to a press release from March 2001:

“IMAX Corporation (Nasdaq: IMAX; TSE: IMX) today announced its plans to build DLP Cinema(TM) projectors capable of projecting the largest high-quality digital image available anywhere in the world. This new Super Digital Cinema(TM) projector will have twice the performance of D-Cinema and will be the only system capable of filling the largest stadium-style theatres with screens as large as 80 feet wide. The projector will use proprietary and patent-pending technology in addition to Texas Instruments Inc.’s (TI) DLP Cinema(TM) technology.

“Speaking at a luncheon at the exhibition industry’s ShoWest forum, IMAX co-CEOs Richard L. Gelfond and Bradley J. Wechsler said: ‘IMAX is the leader in high-end visual presentations and has provided the world’s best cinematic images for 30 years. We plan to leverage our expertise to deliver a DLP Cinema(TM) presentation product that is superior in quality to any other digital-based product in existence. To date we have built early stage working prototypes of the projector and our intention is to roll out a production version late this year.’

“This announcement follows on the heels of the sale by IMAX subsidiary Digital Projection International (DPI) of the first DLP Cinema(TM) projector to a commercial exhibition chain in December 2000. The DIGIMAX(TM) projector located at T-Joy’s multiplex in Hiroshima, Japan, is the first to be in operation outside of the prototype network established by TI. Attendance is reported to be higher than at comparable theatres in the multiplex that are non-digital.”

Wait a minute? DIGIMAX? As luck would have it, there was no threat from Samsung’s camera line. As those of us in the industry know, IMAX has consistently changed its operating philosophy. The Large Format Examiner is now an integral source for IMAX to communicate with the industry. The company has realized that in addition to family friendly entertainment, there’s money to be made with mature fare, such as The Matrix Reloaded and The Matrix Revolutions. As for DIGIMAX, a quick search of the US Patent Office’s website shows that IMAX has let the trademark die. According to Doug Darrow of Texas Instruments, even though IMAX still maintains the exclusive large format license for DLP projection, they have opted to go with other digital options. And it is these other options that may be the salvation of the cinema industry.

In the early 1990s, IMAX and other large format companies attempted to integrate into the traditional Hollywood market by bringing in established directors and filmmakers, such as Brett Leonard and Rick Berman of Paramount Studios, to work with IMAX equipment. However, IMAX filmmaking had many limitations – bulky cameras, short cartridge and reel lengths, and a limited number of theaters in commercial markets.

In 2000, with Fantasia 2000, Walt Disney Pictures showed that transferring a 35mm film onto large format stock could be a successful alternative to filming on large format film. IMAX took this into consideration and in the years following led in developments in digital remastering (DMR) to eliminate the type of film grain from a 35mm to large format print that had plagued Fantasia, and in stereoscopic conversion of CGI animation. They also worked on making IMAX theatres more cost effective and efficient, first with the SR projector and then with the MPX theatre.

If one were to have headed to San Francisco’s METREON in December of last year, Polar Express would have been available in 35mm, digital, and IMAX 3D. The number of options in which a film is available is irrelevant. On a per-screen basis, IMAX will gross at least three times as much as conventional cinema. For instance, of the $161 million that Polar Express grossed in its first eleven weeks, over $40 million came from the IMAX 3D version. The IMAX version accounted for only 60 out of an original count of 3,650 screens. Part of the reason for this huge profit is the size of the theatres: an IMAX theatre usually has at least four times the seats of a standard cinema. The other part is the high clarity of the IMAX image and sound.

As consumer technology expands its emulation of the cinema experience, exhibitors are going to have to alter the film-going experience to retain clientele. In the mid-1990’s, Bob Rogers of BRC Imagination Arts wrote an article predicting the end of film in attractions. The exception to the rule, he said, would be large format. And Rogers was right. Now, almost ten years later, we are discovering the same thing happening all over again – except that instead of attractions, film will become obsolete in mainstream theaters in major markets.

Earlier this year, Intel established the Intel-Revelations Open House in association with Morgan Freeman’s Revelations Entertainment. The idea is that films can be made for streaming into homes much more efficiently than for theaters. By taking films directly to the internet, Mr. Freeman expects to counter the bad press that films receive by going direct to video, rather than having played in a large number of exhibition houses. Reducing the amount of time between a film’s commercial and home exhibition poses another option for studios to gain revenue. In China, according to a recent Wall Street Journal report, Warner Brothers is countering piracy of new releases by offering officially sanctioned DVDs at bargain prices. With the day just around the corner when on-demand viewing through software and broadband will have coinciding releases with their cinema counterparts, the exhibition industry must move to new technologies to offer experiences not available within the home environment.

The salvation of the exhibition industry will be digital and large format cinema, and a large portion of it will be 3D. Filmmaker James Cameron has already opted to make all of his films digitally using Sony 3D cameras. In a recent interview, he said he expects over 1000 digital 3D projectors to be installed in North American cinemas within the next 10 years. In fact, DLP will be offering a presentation on 3D projection technology at this year’s ShoWest. IMAX itself, is in the process of mastering the conversion of live action into 3D, a process they have been working on for years. In an interview with the Toronto Globe, IMAX Co-CEO Rich Gelfond alluded that this process will be perfected within just a few years.

So, as Samsung enjoys financial success with its new Digimax cameras, cineplexes will continue to prosper over the next decade due to another kind of digimax – the revolution of digital and IMAX cinema.

Written by and (C) 2005-2010 Joseph L. Kleiman

NO PART OF THIS PIECE MAY BE REPRODUCED IN WHOLE OR IN PART WITHOUT WRITTEN CONSENT OF THE AUTHOR.

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