UPDATE 6:30 AM PT: IMAX has released full details of its joint venture with TCL, including that their new premium home theater system is expected to launch in China and other select markets in 2015. A full press release follows the earlier story below.
PREVIOUS: IMAX is due to announce later today that it has set up a joint venture with China’s TCL Multimedia Technology Holdings Limited to develop and manufacture $250,000 home theater systems in the booming country. IMAX CEO Richard Gelfond tells The New York Times the decision to partner with TCL was primarily because IMAX expects China to be its largest market. Low production costs were also a factor, but not the driver, he said. China is especially ripe for premium home-entertainment given it does not have a window restriction on the release of films in formats suitable for the systems. Also, despite the quota on foreign movies that are distributed theatrically, the latest Hollywood movies are widely available on DVD and in other formats, which, the NYT says, prompts families “to spend heavily to see them at home in style.” Gelfond said the new systems would not hurt box office. “The cost of this is not at a price point that threatens the theatrical community,” he said. TCL and IMAX have a pre-existing relationship: TCL bought naming rights to Hollywood’s Chinese Theater earlier this year and IMAX has its largest auditorium there. On Monday, IMAX said it had acquired a stake in PRIMA Cinema Inc to expand its home entertainment offering. As part of the deal IMAX will have a five-year window of exclusivity to distribute and resell PRIMA systems in China.
HONG KONG and LOS ANGELES – Oct. 29, 2013 –IMAX Corporation (NYSE: IMAX, TSX: IMX) and TCL Multimedia Technology Holdings Limited (HKSE stock code: 01070), one of the world’s leading consumer electronics companies, today announced a joint venture agreement to design, develop and manufacture a premium home theatre system that will deliver a best-in-class home entertainment experience. The companies expect to launch the new system in China and select other global markets in 2015.
The new 4K fully integrated home theatre system will provide a more accessible and versatile solution that complements the IMAX Private Theatre, IMAX’s recent entry into the ultra-high-end market. The new system will incorporate components of IMAX’s best-in-class projection and sound technology adapted for a broader home environment. Customers will also be able to access current theatrical releases that have been digitally re-mastered into the IMAX format, and will receive unrivaled maintenance and service.
“Our recent introduction of the cinema-grade IMAX Private Theatre, the partnership with PRIMA and, now, our joint venture with TCL, are all part of our carefully designed effort to expand the IMAX brand to additional platforms. While we are very excited about these opportunities, we remain firmly committed to our critical, long-term relationships with our commercial exhibition and studio partners, and to the success of the cinema industry in general,” said IMAX CEO Richard L. Gelfond. “As one of the fastest-growing and most innovative players in the global entertainment technology marketplace, with a strong expertise in display and manufacturing, TCL is an ideal partner to help us change the way people around the world experience their favorite content in the home environment.”
“As content viewing in the home is constantly improving, we wanted to stake out an entirely new position in the premium home theatre market,” said TCL Chairman Mr. Li Dongsheng, “There is no company better-equipped and more knowledgeable than IMAX to deliver that premium experience. Together, we plan to leverage the complementary assets of our companies to create a high-quality, end-to-end home theatre solution.”
The parties’ 50/50 joint venture will initially operate in Hong Kong and Mainland China and include research and development, sales, marketing and manufacturing, and feature IMAX-enhanced, current theatrical content delivered to the home through PRIMA Cinemas’ secure transmission system. The parties are also in discussions with local content providers regarding a variety of options in and around Greater China. The joint venture’s board will consist of representatives from both companies, with IMAX Chief Business Development Officer Robert D. Lister serving as chairman.