Reprint: R1307A
Richard Gelfond knew little about the movie business when he and a partner acquired IMAX, back in 1994. At the time, most IMAX movies were nature documentaries, shown in the theaters of science museums, but he recognized that the entertainment experience the company provided had great potential. Figuring out how to move into mainstream markets turned out to be far more challenging than Gelfond had anticipated, however. The technology constraints of the predigital era and the cultural constraints of the Hollywood movie industry combined to slow IMAX’s progress toward the successful business model it relies on today.
At one point in 2001, the stock was trading at 55 cents a share, and some bondholders tried to force IMAX into bankruptcy. In 2006 Gelfond and his team actively tried to sell it. But doubts about its survival faded in 2009—particularly after the IMAX version of Avatar became a global phenomenon, bringing $250 million in revenue to the company.
The Idea: The company experimented with business models to grow from its modest roots in nature documentaries into a major player in multiplexes around the world.
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