Imax has moved into the the virtual-reality space in addition to its large-scale film products.Eric Charbonneau
When Galt, Ont., science teacher Gordon Clark gave three of his students the run of the high-school lab after hours in the 1940s, he would have had no idea that, years later, they would come up with one of the biggest innovations in movie history.
But Imax Corp., the company they founded in 1967 (originally as Multi-Screen Corp.), not only revolutionized the film-going experience with its giant screens and innovative cinematic technology. It also planted the seeds of what would grow into a Hollywood powerhouse, with arms in film production, display and distribution. There are now more than 1,000 Imax theatres in 66 countries, according to the company.
Popular across North America and Europe, Imax has stepped into the emerging markets of India and China as well, with a planned expansion of 200 screens in China alone. It recently signed a deal for 25 new theatres in Europe.
"Both the technology vision that started off the company, and also the vision to leverage partnerships and then to expand, has been impressive," said Andreas Schotter, assistant professor of international business at Ivey Business School in London, Ont.
By engaging with the movie industries in countries such as India and China, he said, "I see this as a role model for agility versus complacency, by not relying purely on the North-South relationship, and also to dynamically change."
Imax inventors Graeme Ferguson, Robert Kerr, William Shaw and Mr. Ferguson's brother-in-law, Roman Kroitor, originally based their company in Galt, now part of Cambridge. At the time, said Mr. Ferguson, now 87, "people in the motion picture industry thought it weird."
For them, however, it was logical. They all knew each other well and brought different facets of expertise to the venture. Mr. Ferguson and Mr. Kroitor were filmmakers. Mr. Shaw was an engineer then working at what is now CCM Hockey. And Mr. Kerr brought not only some business experience but the goodwill of the local Toronto-Dominion Bank, which trusted his judgment enough to give them a loan.
All four shared a major ambition: to create an awe-inspiring movie-watching experience that practically immersed viewers in the massive images on giant screens.
But that meant finding a camera that could shoot images on a film frame about 10 times larger than a 35-millimetre format, as well as a projector that would advance the film without ripping it, something Mr. Shaw accomplished by adding a compressed air component to a newly patented Australian machine. Even the movie theatre itself would have to be entirely redesigned.
By 1970, they had overcome those obstacles, presenting their first single-screen, large-format film at the world's fair in Osaka, Japan. A year later, they got a permanent space in the Cinesphere at Ontario Place in Toronto.
According to Mr. Ferguson, interest from the organizers of world fairs in Imax technology was a key part of the company's ability to constantly innovate. "The people who were in charge of designing and building the pavilions kept saying to us, 'What have you got that's new?'" he said. "I don't think very many inventors have been so lucky, to have people provoking further changes and innovations."
Fulfilling their second mandate – to bring Imax theatres to cities around the world – was also a challenge. Over its first two decades, Imax films could be seen at fairs and in museums and science centres. Funded by organizations such as Canada's National Film Board and the Arlington, Va.-based National Science Foundation, they were mostly nature films and documentaries.
Regular theatre owners, meanwhile, faced upfront costs of $2-million just to install the projection and sound equipment. Each film reel cost $30,000, compared to about $1,000 for conventional films, and required a forklift to get it into the projection room.
Hollywood studios liked what they saw, but unless they could be seen at thousands of cinemas, demurred at the price tag and complexity of making Imax movies.
In 1994, a U.S. investor named Richard Gelfond bought Imax with a partner and took on some of those problems.
The company came up with another innovation in 2001, what Mr. Ferguson described as "the ability to up-res 35mm film to Imax quality." This digital media remastering, or DMR, technology allowed them convert existing Hollywood movies to its stunningly large format.
The company then set up a deal with the studios to convert their films in return for a percentage of the take from the Imax versions.
In a Harvard Business Review article, Mr. Gelfond described how, in 2006, the company started offering multiplex movie theatres free equipment installation in return for 20 per cent of box-office receipts. Movie-goers would pay a premium, he pointed out, to see a film on an Imax screen, which meant more money for studios, theatres and the company.
"Scaling up from where they were was a very important move for them strategically," said Dr. Schotter, "in particular after 2007, when their balance sheet carried a lot of debt. And considering how expensive the system was, this was the right move to make."
Indeed, when the film Avatar came out on Imax screens in 2009, for example, its share of global earnings of $250-million augured what Mr. Gelfond called a "financial turning point" for the company.
Imax continues to innovate. Earlier this year, it brought out Imax Private Theatre, offering wealthy viewers the Imax experience in their own homes.
It also unveiled its first flagship virtual-reality centre in Los Angeles, featuring VR gaming spaces. Imax has deals to open three more VR centres in the United States and one in China.
"We founded the company 50 years ago this year," said Mr. Ferguson, "and the innovations have been pretty much continual."