IMAX Corporation, leader in premium large format for film exhibition, together with its subsidiary IMAX China have raised a $50M fund to create 25 pieces of interactive VR content.
The projects, a combination of event-style productions and games, will originate from existing relationships with filmmakers and Hollywood studios and from game publishers. The content will be available not only in upcoming IMAX VR centres (pilot venues to be launched in the next months, previously reported) but also in non-IMAX platforms worldwide.
Strategic investors in the fund include Acer, CAA, The Raine Group, WPP and Chinese companies Enlight Media, Studio City and China Media Capital.
This logical next step follows two previous ones that saw IMAX entering the VR space: the creation of a cinema-grade VR camera in partnership with Google and the announcement of a handful of pilot IMAX VR Centres to be opened in several locations worldwide in partnership with Starbreeze, a VR content and hardware creator.
IMAX’s primary intention with this fund is to feed its own VR centres with content. It has used a similar strategy with films, for which it has set up the IMAX Original Film Fund and the China Film Fund, each of $50M, in the last two years. However, it is meaningful that this new VR fund is of the same size in just its first phase: a symptom that IMAX does not want to lose momentum in entering this market and aims to secure a preeminent position if the venture turns out successful.
Although it is not possible to benchmark the projects without knowing their individual size and budget, $50M should be sufficient to deliver 25, high-quality, 10-15min experiences that can be compared to high-end VR games and successful marketing-led experiences in the market.
Whilst the IMAX Film Fund was underpinned by one institution only (The Knights of Columbus) the diverse and balanced profile of the VR fund’s strategic investors is significant: a hardware manufacturer (Acer, which is the manufacturer of StarVR, the VR headset that IMAX will use in its centres), a talent agency (CAA), a media and entertainment investment group (China Media Capital), a leading film and TV production company (Enlight Media), a boutique merchant bank (The Raine Group), an investment company (Studio City) and an advertising and marketing company (WPP). In addition to capitalising the fund, these could (and probably will) provide services to the venture and benefit from the insight knowledge arising from the experience.
In addition to this, the significant presence of Chinese funders underlines IMAX’s focus in that territory and the growth potential that it is already capitalising on in the Cinema field . China is IMAX’s largets single market, by revenue and screens. It is also expected that, if successful, this venture will help IMAX China (floated in the Hong Kong stock exchange) regain some ground after its shares have lost 40% of their value since a peak in December 2015. For Chinese funders, this is an opportunity to tap into China’s appetite for location-based VR, exemplified by the estimated 6,000 venues that are showing VR in some form or other, although most not in premium spaces such as cinema.
By controlling content creation, which is IMAX’s preferred strategy for cinema, IMAX will be able to adapt it to its own technology and venues and guarantee the best experience, more difficult to achieve with third party content.
At this stage the content will be exploited in both IMAX VR centres and non-IMAX platforms. This approach aims to both maximise the fund’s returns and increase VR awareness among the general public, which in turn is necessary to build the market. However, it is unclear how many existing venues can replicate IMAX VR centres’ premium experience, a crucial aspect for IMAX positioning. This will depend on the equipment (including motion or 4D seats, if these are eventually used), the staff and the venue itself. Additionally, exclusivity in certain markets or venues would add value to the overall experience,
With regards to its cinema-grade VR camera, which IMAX is developing with Google (previously reported), these projects will be a useful test lab for it. That said, in order to provide the interactivity aspect the projects will also require game-engines, a technology IMAX does not own.
Overall, and although IMAX is testing the waters in this incipient VR market, this fund goes in the direction of its core business in that it helps create premium experiences within entertainment centres. Being eminently a film company and a leader in the Premium Large Format market, it is expected IMAX will leverage its well-known brand and its links with top filmmakers to position itself as the leading provider of premium location-based VR experiences.
It does have some competition within cinema, as Korean group CJ CGV (the group behind 4DX and ScreenX multi-screen cinema format) is also active in VR. Korea is a driver country for VR, with Samsung a prime player, and the government’s Ministry of Science, ICT and Future Planning has granted funding to five projects in the VR space, including cinema. There are also smaller ventures The VR Cinema in Amsterdam and VRrOOm, which is planning VR cinemas in China and France, beginning with existing cinemas in China.