Going Hollywood

For

the 282-seat IMAX theater in Grand Rapids, Mich., Nov. 12 was a banner day. On the 53-ft.-high screen that evening: the first full-length feature converted into IMAX 3-D, Warner Bros.' The Polar Express. One performance after the other sold out — and the momentum kept up all weekend, even with ticket prices at $13. When the receipts were counted, this IMAX screen had raked in more for the film's opening than any other theater in the state. "We would've done even better," says John Loeks, CEO of Celebration! Cinemas in Michigan, "but we ran out of seats."

For IMAX executives, those results are almost as magical as the snowflakes seemingly drifting down over audiences watching Polar Express in 3-D. While the regular film didn't do as well as expected on its opening weekend, the 3-D version set a record for IMAX, pulling in an average $35,600 per screen — roughly six times as much as conventional theaters. Armed with those numbers, IMAX hopes it can convince Hollywood and theater operators that IMAX movies can draw big crowds at premium prices. For an industry stung by a 4% drop in attendance last year and probably steeper drops this year, according to box-office tracker Exhibitor Relations Co., it may be a compelling sales pitch. "We're ready for prime time," says IMAX co-chairman and co-CEO Richard Gelfond. "It's almost a no-brainer."

Well, maybe. Until recently, IMAX was not exactly what you would call Hollywood hip. Founded in 1967, the Ontario-based entertainment company was known for its eight-story-tall screens in museums and its educational films on such subjects as dolphins and space — some in 3-D. Cool? Definitely. Profitable? Not very, especially considering the $8 million cost of an IMAX theater. But over the past 21 months, IMAX has introduced a new technology that allows multiplex operators to retrofit existing theaters for about $1.6 million. The company also developed a way to digitally convert films to its giant-screen format — making Hollywood blockbusters easily IMAX ready. (At the moment the 3D process used in Polar Express works only on computer-generated films; 3-D live-action movies are a year or two away.)

The once staid IMAX now has Hollywood sizzle and a new customer base: multiplex owners. The updated business model appears to be working. In the past year, IMAX had successful runs with three Hollywood titles, including Spider-Man 2, and has inked deals for 25 theaters worldwide. IMAX now operates 245 theaters in 35 countries, including China and India.

Eric Wold, an analyst for Merriman Curhan Ford & Co., believes IMAX gives movie studios and multiplex owners a competitive advantage — and generates extra revenues for both. Or as Dan Fellman, head of domestic theatrical distribution for Warner Bros. (owned by TIME'S parent company), puts it: "IMAX 'event-izes' your movie. It's that simple."

Will IMAX be able to pull couch potatoes away from their plasma TVs? Polar Express's director, Robert Zemeckis, thinks so. "The one thing that IMAX delivers," he says, "you can't get in your home-theater system: this great big, beautiful image." Whether IMAX is the answer to Hollywood's troubles, though, may yet prove to be as ethereal as those magical 3-D snowflakes.