“We are not an exhibitor.” That is the tout of Imax CEO Richard Gelfond on Wall Street as the executive aims to differentiate the giant-screen company from more volatile rivals like theater giants AMC and Cineworld . And, on September 22nd, Imax unveiled its $21 million acquisition of online video technology company, SSIMWAVE, which would come as a surprise if Gelfond hasn’t announced its ambitions yet.
SSIMWAVE, a startup run by CEO Dr Abdul Rehman, uses machine learning to enable customers – including Disney, Paramount and Warner Bros. Discovery – provides high video quality for viewing on multiple devices. The startup’s technology aims to enable streaming players to deliver a better customer experience by reducing content delivery issues such as loss of quality, out-of-sync screen audio and video. , contrast and color depth are not uniform. This acquisition appears to reinforce Imax’s efforts to expand its revenue streams beyond the 1,600+ displays the company operates globally.
This purchase adds to a portfolio of non-box-office properties that include Imax Enhanced, a remake service that optimizes movies for online viewing at home, and Imax AI, a joint venture with VFX company Maximus. High resolution video technology for streaming services.
Unlike previous Imax, which has boosted new revenue streams on its own with the ImaxShift film studio and sold private home cinemas, SIMMWAVE represents an acquisition using a business model that helps exhibitors major involvement in television and streaming content.
“Many of our previous business endeavors were to enter new markets on our own,” says Gelfond The Hollywood Reporter. “With this technology, we have had leading technology with world-class customers, revenue, proprietary technology and this drives our brand and core business. “
But these properties represent only a small fraction of Imax’s total revenue, largely coming from box office revenues, royalties from large-format theater technology rentals to exhibitors, and technical remake revenues. numbers from supersized movies. As of the fourth quarter of fiscal 2021, Imax’s line of “new business initiatives” totaled full-year sales of $1.15 million and $3.7 million respectively. For comparison, in the most recent quarter, Imax’s total sales totaled $74 million.
So far, analysts are favoring Imax for a buy. Eric Handler of MKM Partners wrote that the acquisition “helps further Imax’s goal of leveraging its platform beyond theatrical experiences and access to family” and has “a compelling risk/reward with minimal capital risk”.
“Strategically, we like how this acquisition has both expanded the company’s reach and built deeper relationships with streaming partners,” said Rosenblatt Securities analyst Steve Frankel. potential and provide solutions that can help both existing efforts in the legacy business and the nascent live events business.” 22 Investor’s note on Imax’s expansion in its industry.
Goldman Sachs analyst Michael Ng adds that SIMMWAVE, with its perceived quality analytics technology, will drive new recurring revenue for Imax, expanding its own technology expertise in image enhancement and enabling synergies as Imax scaled up the tech startup’s business using its own brand and exhibiting industry reach.
“We are encouraged by the potential synergy realized by combining SIMMWAVE’s product of enhanced visuals for streaming, gaming, VR/AR with Imax’s scale, deep relationships industry breadth and global footprint,” Ng wrote in a September 23 investor note.
A version of this story appeared in the September 27 issue of The Hollywood Reporter magazine. Click here to register.