Chinese movie goers' passion for big screen movies, aroused by Avatar, appears to see no signs of fading away, given growing number of IMAX theaters available in the country. But industry insiders said Monday that weak investment returns may cast dim light on IMAX's further expansion in China.
So far, IMAX theaters grow to 37 in China, including several in domestic science and technology museums, according to the company's website.
IMAX, a film format and projection standard created by Canada-based IMAX Corp, enables bigger size and higher resolution than conventional film systems.
China's market for IMAX movies has considerable growth potential, said Yin Hong, deputy dean of Tsinghua University's school of journalism and communication.
"The number of movies available in the IMAX format is rising (in the market), and public demand for them has been nurtured, ensuring the prospects for IMAX in the market are promising." Yin said.
An upswing seen in China's film industry is consistent with booming market demand for IMAX, Yin added.
China's box office sales totaled 6.21 billion yuan ($0.94 billion) in 2009, according to the State Administration of Radio Film and Television. The official figure for 2010 will be released later this month, and market watchers expect the figure to exceed 10 billion yuan ($1.52 billion) in 2010.
China is now IMAX Corp's second largest market trailing the US, in terms of the number of IMAX screens.
But industry watchers pointed out that the heavy investment required for IMAX equipment might dampen enthusiasm over IMAX's rosy prospects.
Installing an IMAX screen needs an injection of more than 10 million yuan ($1.52 million), which would extend the investment return period, Yuan Xin, vice president of SMI Corporation, which runs the Stellar International Cineplex, told the Global Times Monday. SMI has a chain of 18 Cineplex venues, which is a complex housing multiple movie theaters, in China.
Normally, a Cineplex would require an investment of around 20 million yuan ($3.04 million), which takes more than six years to turn a profit, said SMI's Yuan. In contrast, the return on investment in an IMAX theater would take at least nine years, Yuan said.
Stellar International Cineplex now has one IMAX theater in Shanghai, and a second is expected to open in Beijing in the second half, according to Yuan.
"It is unlikely that we would continue investing in IMAX theaters in the future. The current trend of IMAX expansion (in China) is more due to cinemas' competing to boost brand image," Yuan said.
One industry watcher said there is still room for expansion. There are no signs of overheating in the IMAX movie sector, as the number of IMAX screens available could be easily monitored compared to conventional screens, which helps reduce the risks involved, said Tsinghua University's Yin.
