Should IMAX Shareholders Worry About This New Competitor?
3-D ticket sales aren't quite the cash cow they used to be. Walt Disney 's megahit Iron Man 3 seems like a perfect fit for the high-octane 3-D experience, but only 45% of the title's ticket sales came from such screens -- a performance that Variety calls "pathetic." Viacom 's zombie romp World War Z might be an even better fit, starring Brad Pitt and a plethora of spectacular special effects. But that shoo-in 3-D hit garnered only 34% of its sales in the depth-enabled format last weekend.
So, what's a 3-D expert to do? Explore new markets, of course!
That's what 3-D projection specialist RealD is doing with "LUXE: A RealD Experience." The big-screen concept is a direct competitor to the established IMAX brand, but RealD sees an opportunity to consolidate "an alphabet soup of brands and differing amenities" in the space.
Not so fast.
While it's true that nearly every major theater chain nurses its own brand of premium screens, Fool contributor Anders Bylund sees little room for another player in the market. That's especially true because a real premium experience requires cooperation between studios and technology platforms. The next time Disney or Viacom are looking to convert a big-budget action title to the extra-large screen, do you think they'd choose the proven IMAX brand, or the upstart RealD solution?
In the video below, Anders explains in greater detail why IMAX shareholders shouldn't lose sleep over the new RealD challenge. If a dozen brands are confusing customers, adding another name only creates a baker's dozen. And if there's a race to consolidate the premium cinema market, IMAX would be the dog to beat.
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The article Should IMAX Shareholders Worry About This New Competitor? originally appeared on Fool.com.Fool contributor Anders Bylund holds no position in any company mentioned. Check out Anders' bio and holdings or follow him on Twitter and Google+. The Motley Fool owns shares of Walt Disney. Motley Fool newsletter services have recommended buying shares of Imax and Walt Disney. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
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