Richard Gelfond, IMAX CEO, joined The Final Round to discuss the state of the movie business and Hollywood as movies like ‘Dune’ and ‘No Time to Die’ continue to push back their release dates due to the coronavirus pandemic.
Video Transcript
SEANA SMITH: Regal Cinemas suspending operations at all of its US locations. The decision coming as the release of the big budget films continue to be postponed. So here with a little bit more about how the pandemic’s impacting the movie industry, we want to bring in Richard Gelfond. He’s CEO of IMAX. And Richard, it’s great to have you on the show. We know it’s been a very challenging period for the movie and theater industry over the last several months. First, just let me get your take on how you’ve been managing through the pandemic and weathering the closures, as well as the limited capacity requirements around the world.
RICHARD GELFOND: So we’re in 82 countries. So as complicated as it’s been everywhere, it’s been even more complicated for us, because you have different regulatory schemes in different countries, you have different content in different countries, you have different levels of safety from consumers going on. But the general theme that’s flowed everywhere is, where people feel safe, they’ve gone to the movies. And where they haven’t, they haven’t gone to the movies.
So the best example is China, where we have over 700 theaters. And that’s been extremely successful. Just this weekend was the national holiday. And we were only allowed to have 75% capacity. And it was our best national holiday ever, $13 million over the weekend. On the other hand, in areas where it feels less safe, including the United States right now, the results have been very disappointing. So you have to follow the regulators, follow the consumers and then follow the movies.
SEANA SMITH: Well, Richard, what can we learn from what’s happening over in China in terms of the movie industry? With customers feeling confident and feeling safe just to go to the movie theater, is there anything that we can learn about what’s happening over there and kind of parlay that into our reopening plans here?
RICHARD GELFOND: I think we can. I think what happened in China was the cinemas reopened about a month before the first blockbuster movies came out, and they ran a lot of library content. So people got used to going back to the movies. They knew the theaters were open. They saw what the protocols were, wearing masks, social distancing.
And then when the first blockbuster came out, which is a film called “The Eight Hundred,” it did over $100 million, because there was a content that grew. In the United States, “Tenet” was the first blockbuster to come out, but in many cases, the jurisdictions only open a few days before the movie came out. In other cases, the cinema operators opened the night before the movie came out. So there really wasn’t an adjustment period for people.
Also in the US, California and New York were closed, and that’s where many of the reviews come out of, where many of the taste-makers give their influencer reports on what to see and what to do. So a combination of kind of it all happening so late and the key markets being closed, really prevented “Tenet” from doing as well as it should have.
AKIKO FUJITA: Richard, when you think back to the very beginning of the year, 2020 was supposed to be the year where China surpassed the US in terms of returns for the box office. Not quite sure where that stands right now, but given all the restrictions that are placed in the US and given that you’re coming off of this record weekend in China, to what extent do the gains that you’ve seen in China so far over the last several months help offset the big losses you’re seeing here in the US?
RICHARD GELFOND: So we have three regions of the world that we operate in, China, North America, and then what we call, rest of world. And our revenues basically are one third, one third, one third. So China’s pretty close to normal right now. So that’s going OK. The US is not normal. And as you led off today, with regal shutting down, I think we should assume that the US is not going to do well for the rest of this year.
And then I think the rest of the world, it’s a little bit of a mixed bag. So places like Japan and Korea are doing well. India is just reopening. Russia’s doing OK. So it depends on what the movies are, and it’s could be a little challenging without the Hollywood movies, because even though you do have local content in a lot of these countries, they’re still dependent on the Hollywood content.
One of the problems with the worldwide release of films, is that the studios are located in Los Angeles, and they sit in the Hollywood Hills, the executives, and they see COVID around them and health issues. So it’s hard for them to separate the fact that 75% of the box office is outside of the US. And I think that’s one of the reasons why they’ve been so hesitant to release movies. And I think it led to this chain reaction, which caused Regal to close down today, and probably will cause some other cinema operators to close down.
RICK NEWMAN: Hey Richard, Rick Newman here. What do you do when you can’t get enough films? Do you show old films? Do people want to see old films? Do you just go further down the food chain and look for films that maybe would not otherwise get distribution or what exactly?
RICHARD GELFOND: I think it depends where you are, what part of the world. So if you’re in Japan, you show Japanese films. In Korea, you show Korean films. In North America, I think you try and show library films that were popular before. We did some decent business in places with “Inception” and with “Interstellar,” the Chris Nolan films. We did some business with “Avengers.”
But I think over time, that’s a tough way to make money. And that’s why I think Regal did what it did, and I think you’re going to see some of the other chains either close down or shorten their hours. Because they’re just not going to have a lot of content to play in North America. For us, it’s fortunate that we’re global, so we can compensate a little in other places. But it’s still good to have the Hollywood movies.
RICK NEWMAN: Seana, unmute again.
Richard Gelfond, the CEO of IMAX. We wish we had more time with you, but we’ll hope to have you back again soon. Thanks for joining us today.
RICHARD GELFOND: Thanks so much, enjoyed being with you.
