Movie theaters started spending big money a few years ago to prepare for the revolutions of digital projection and 3-D. They haven’t stopped since.
The latest craze: the megascreen.
Now, the leading company in providing 3-D systems to theaters, RealD Inc. in Beverly Hills, is seeing the big picture, too. RealD announced last week that it is launching a brand of large-format theaters called Luxe: A RealD Experience, which will compete with other big-screen brands such as Imax.
Jim Goss, an analyst who follows RealD at Barrington Research Associates in Chicago, said it’s a good move.
“I view this as a positive for RealD,” Goss said. “(It’s) an attempt to maintain and even broaden its image and position as a purveyor of high-quality video imaging.”
The Luxe theaters will have massive screens, ultrabright displays, high-end audio equipment and luxury seating, the company said. They’ll show movies in either 2-D or 3-D.
The rollout will begin in Europe this winter. Two of RealD’s existing 3-D partners, Moscow-based cinema chain Karo Film and Bulgarian chain Arena Cinema, said in the announcement last week that they will use the Luxe brand.
The market for the theaters is growing since moviegoers have shown enthusiasm for bigger screens. A report last year from U.K. research firm Dodona Research predicts that admissions to large-format theaters will increase from 42 million tickets in 2011 to 170 million in 2016.
Theaters see bigger screens as yet another way to differentiate the movie experience from what’s available at home. Tickets usually cost about $2 to $5 extra.
But RealD is coming late to the party. Along with industry leader Imax, many cinema chains, especially in the United States, have developed their own brands, such as Cinemark Holdings’ XD, AMC Entertainment’s ETX and Carmike Cinema’s BigD.
There is still plenty of opportunity, however, to establish a new brand overseas, said Eric Wold, an analyst at B. Riley & Co.’s San Francisco office.
“Where it’s a big benefit is in Europe, where there hasn’t been a lot of development,” he said. “Some of the smaller exhibitors that operate a handful of theaters or own one theater don’t have the capital to build their own.”
RealD’s main business is installing 3-D systems in theaters at a cost of about $10,000 and then collecting a 50 cent fee for each ticket sold to the 3-D movies. It had installed about 22,700 screens as of March.
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