Global stocks have been rattled for months by the often harsh tone of U.S.-China trade talks. Yet film industry technology leader Imax’s CEO Richard Gelfond isn’t worried about an unhappy ending
Jiande Chen, chief executive officer of Imax China Holding Inc., left, and Richard Gelfond, chief executive officer of Imax Corp., pose for a photograph prior to a news conference in Hong Kong in 2015. Photographer: Xaume Olleros/BloombergGlobal stocks have been rattled for months by the often harsh tone of U.S.-China trade talks. Headlines of late have bemoaned the expansion of a trade war into a currency war, if not worse.
Gelfond concedes a solution to the U.S.-China friction may not immediately be at hand. U.S. President Donald Trump and China President Xi Jinping “face a lot of parallel issues, in that there are internal issues and constituencies talking to them,” Gelfond said. “They also face existential issues of needing to save face.
China is doing well jn part because years of brisk economic growth have given consumers have more money to spend on entertainment. That has fed box office revenue, which, in turn, has made it possible for film businesses to invest more “on special effects or actors, or sets, or reshoots and all of that,” he said. “You can really afford high-quality production.”
Gelfond sees Imax’s success in the context of more than two decades of building partners and government ties. Imax’s early business was “whales, bears and seals, meaning documentary movies,” he said. “I wanted to open up the China market, and I thought the best way to do it was off of the institutional business, which was those documentaries, because China at that time was more closed to content. There weren’t really multiplexes in China.
But that wasn’t enough, either. After listing at HK$31 a share, Imax China’s shares eventually fell; on Monday, they closed at HK$17.50. “Even as we were opening new theatres, our box office was flat. We were underperforming. We really spent time in ’17 really analyzing what was going on,” he said. “We couldn’t pick the best movie in China all of the time. In the U.S., we were pretty good at saying, ‘Avengers: Endgame’ is going to do really well, or ‘Lion King.
In China itself, local titles have an important role. “We’re also doing more Chinese films especially in lower-tier cities,” he said. “The Hollywood films don’t work as well in those cities. In the lower tier cities, they don’t have the same connection.”
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