IMAX faced two critical questions: would IMAX lose its differentiation if it exhibited too many Hollywood movies and should IMAX be sold to a larger studio such as Sony, Disney, or Time-Warner? I think IMAX wouldn’t lose its differentiation and shouldn’t be sold to a larger studio.
We can start our case with SWOT analysis. The strengths for IMAX include its film technology, partnership with theaters and strong brand name. IMAX films are printed on films that are 10 times larger than the 35 mm films that were used in traditional multiplexes and were projected on screens that were eight stories high and 120 feet wider. These features of the IMAX produce images on screen that are brighter and sharper than those found in conventional movie theater. IMAX entered into partnerships with AMC and Regal cinemas to screen IMAX films in multiplexes using its MPX technology. The company’s main sources of revenues were long term theater system lease and maintenance agreements, film production and distribution, and theater operation. IMAX is a brand so they don’t have to pay the same kind of talent that Hollywood has to pay which is really a high percentage of the costs. IMAX films are often educational and entertaining and involve documentaries of natural and scientific wonders.
The weaknesses for IMAX include expensive production, it is smaller compare to Hollywood studio, and long term debt. Because of its larger size, printing and distributing, IMAX films are costlier than 35 mm films. IMAX films faced competition from other films produced by studio such as Pixar/Disney that are targeted for families. Within the large format film segment, Iwerks was the only rival to IMAX. It received two academy awards for scientific and technical achievement. There is a debt remained problem for IMAX which caused by the crisis that hit the theater industry in the late 1990’s because of overbuilding during that decade.
The opportunities for IMAX include global market, newer agreements...