New Delhi: Imax Corp. , the Canadian entertainment technology company, will open at least 15 theatres in India by the end of next year. The company that specializes in 2D and 3D projection, cameras, post production and digital sound systems, has two Imax theatres in the country—one each in Hyderabad and Mumbai. Imax screens are typically much larger than the norm without the attendant loss of resolution.

“One month ago we opened an Imax in Bangalore, which has done a business of $200,000 in this period," said Richard L. Gelfond, chief executive officer, Imax Corp. The theatre is exhibiting Life of Pi in 3D.

Although Gelfond came to India to inaugurate an Imax in Chennai, he could not do so as it hadn’t obtained all the relevant permits. Still, he foresees the dynamics of the Indian market change in line with that of China.

“In China, we have 100 theatres open. Another 150 will open in the next few years. It is the second largest market in the world for Imax after the US," Gelfond pointed out.

Imax may be upbeat about the Indian market but content inventory could hamper growth, said Smita Jha, leader of the entertainment and media practice at PwC.

“Imax is known for 3D," Jha said. “Since such content is limited in India, theatre occupancy could remain low, affecting business potential."

Gelfond’s strategy includes coaxing Indian film production houses to either shoot with Imax cameras or to allow the company to convert their films to suit Imax theatre formats. In September, the company announced its deal with Yash Raj Films for action-thriller Dhoom 3 that will be converted to suit the Imax 2D format and released next year around Christmas.

The company expects more Indian film studios to agree to make films for Imax audiences. “I don’t want to overplay this, but in China we did our first film three years ago. This year we have five Chinese films," Gelfond said.

For India, the company has devised a business model for such content tie-ups. It bears the conversion cost of a film for 2.5% of the box office at Imax theatres. Two Hollywood hits, Dark Knight Rises and Skyfall, were converted for Imax release.

Gelfond said the company, with a market capitalization of $1.3 billion, started focusing on the commercial theatre business seriously only in 2002. Traditionally, Imax technology was restricted to science museums.

Globally, Imax has 650 theatres, nearly four times the number in 2008. Gelfond said the breakthrough occurred with digital technology lowering the conversion cost dramatically.

He has his eyes set on “India’s rising middle class, their disposable incomes and the affordable luxury of the Imax experience."

Indian consumers are getting used to diverse devices at home—television, computers, iPads, he said. “So, when they go out they want something special, like an Imax." What may further propel growth is the accelerated pace of mall development with multiplexes epanding from three screens to six and seven. “So if you have one Imax in that, it works," he said.

According to the 2012 media and entertainment report by the Federation of Indian Chambers of Commerce and Industry (Ficci), a lobby group, and consultancy KPMG, the cinema exhibition industry

is estimated to double multiplex screens to over 2,200 by 2016.

Still, Imax is expensive technology and may not draw too many theatre chains in India, said Jha of PwC.

The company is currently operating on a licence-based relationship with theatre owners here. It provides the equipment and theatres pay an upfront fee and a small royalty. The same model was followed for the first seven-eight years in China.

“However, now we are co-investing with the exhibition companies in China. I think over time as we get more comfortable in India, we will consider this model," Gelfond said.

Footfalls at the Imax theatres have been encouraging, said Pramod Arora, group president and chief excutive of PVR Ltd, which has a five-theatre deal with Imax. Footfalls are twice the number than at normal theatres.

“It is good to see that consumers are not deterred by the ticket prices, which are 1.5 to 2 times higher than what they are for a regular screen," Arora said, adding that the format is definitely more immersive from a consumer point of view.

Higher ticket prices may boost box-office collections. According to a report by the Confederation of Indian Industry and PwC, even though India ranks at the top in terms of number of films produced and admissions, it is eighth in box-office collections.

Vidhi Choudhary contributed to this story.

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