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Cineplex Galaxy Income Fund (CGX.UN.T), Imax Corp.'s (IMAX) biggest Canadian customer, is following the trend of its U.S. counterparts by developing its own large-format theater concept.
Dubbed UltraAVX (audio-visual experience), the format will feature "supersized" wall-to-wall screens, enhanced sound, comfy leather chairs, and reserved seating, Cineplex announced at its annual meeting Wednesday. The first UltraAVX auditorium is expected to open at a new theater in Calgary next month, with another to follow soon after in Toronto.
Ellis Jacob, president and chief executive of Cineplex, told attendees that UltraAVX will give new meaning to the company's motto "Escape With Us."
Several Imax customers in the U.S. have already launched their own giant-screen formats using "off-the-shelf" technologies. Cinemark Holdings Inc. (CNK) was the first with its "XD" brand, then came AMC Entertainment with "ETX," and more recently Regal Entertainment Group's (RGC) "RPX." The premise is the same for all of them - bigger screens and upgraded sound at a premium ticket price.
In an interview after the meeting, Jacob said Cineplex is in talks with Imax - a Canadian company - about putting more locations in its home territory. He also noted that Cineplex has some of the highest-grossing Imax screens in North America, and Jacob himself chose to see "Avatar" at an Imax theater.
He said that 25 years ago, home video was predicted to destroy the movie exhibition industry, yet Cineplex posted its best financial results ever in 2009. "It's things like VIP (auditoriums), AVX, Imax, and 3D in particular that really differentiates our experience compared to what you watch at home," he said.
In response, Imax's chief executive, Richard Gelfond, told Dow Jones that many exhibitors have seen the success of Imax and are creating premium brands to capture a bigger piece of the "high-end" box office. But he's not concerned, as such "home-grown" large-format theaters haven't hurt Imax's results, and underperform Imax theaters.
With respect to Canada, he said there's a lot of interest from exhibitors to add Imax to their multiplexes. "Whether we do more theaters with Cineplex or with others, I'm pretty sure we'll be adding some more theaters in Canada," Gelfond said.
Company Web Sites: http://www.cineplex.com, www.imax.com
-By Andy Georgiades; Dow Jones Newswires; 416-306-2031; email@example.com