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Why IMAX Is Investing $50 Million in Premium VR Content

In 2016, the film industry is forecasted to have sold the fewest U.S. tickets per person of any year since perhaps before the 1920s. Lazy sequels, remakes and the rise in popularity of online streaming from sites like Kodi are partly to blame. Whatever the exact reasons, Hollywood is struggling to adapt to the changes in customer demands. They need revitalization.

IMAX recently revealed it was working with strategic investors to raise a $50 million investment to fund at least 25 interactive virtual reality content experiences. Analysts optimistically predict that VR and AR could generate $120 billion in revenue by 2020. This should be welcome news for film franchises struggling to draw in customers and for filmmakers searching for new ways to engage audiences.

IMAX’s Race to Virtual Reality

Over the next three years, IMAX plans to launch this next generation technology in malls and multiplexes across the globe. The ambitious plan is to create an experience that is even more immersive than its big screen counterpart.

“IMAX has built its legacy on using innovation and creative collaboration to drive the further adoption of new technologies.” – CEO Richard L. Gelfond

The first wave of IMAX VR centers is expected to land in Los Angeles and at ODEON & UCI Cinemas Multiplex in Manchester, England. Further test facilities are expected across the US, along with China, Japan, Western Europe and the Middle East in the coming months.

We can assume the concept to appear close to high-profile tourist destinations along with the more traditional shopping and multiplex cinema locations. It is hoped that the current high cost of VR consumption to home-users will be enough to tempt them away from their homes to experience the cinematic VR content that is poised revolutionize an entire industry.

In the long-term, IMAX is planting the seed of fully-immersive entertainment, which might be enough to spread the IMAX brand into the consciousness of mainstream audiences before VR products reach their front steps. After that happens, affordable proprietary VR equipment for the home is just a step away.

The Potential Setbacks

Projected ticket prices range between $7 and $10 for ten-minute immersive experiences. At that price, IMAX might struggle to achieve long-term success. Add to that the possibility that VR will suffer the same fate as 3D, and you’ve got some serious concerns. Although the hype is strong, the actual experience may simply not be pleasurable for the average consumer.

“We’ll be able to leap five years ahead of what most people can do in their homes” – Starbreeze CEO Bo Andersson Klint

Although 2016 was a tipping point for VR, it’s important to remember that the technology is still very much in its infancy. Early adopters are faced with an expensive outlay to snatch a glimpse of the future. But, the reality is that VR is simply not good enough or affordable enough for mainstream adoption at the moment.

In Sum

To hear that IMAX will invest in VR is exciting and bodes well for the film industry. The question is whether the economic barriers to entry and the ruggedness of the technology itself are still high enough to prevent widespread adoption.

At this point, I believe we are still several years away from exploring the metaverse together. Nonetheless, I’m convinced that in a few years’ time, we will look back on this year as a watershed moment when we began to take the possibilities of VR seriously.

Personally, the most potent aspect of IMAX’s proposition is that it’ll make the technology widely available.

If they manage to draw in the right people, then the technology could certainly spread. Once that happens, people might begin to understand the possibilities which would stoke excitement and thereby acceptance. From that point, it’ll quickly reach epidemic proportions.

What are your thoughts around the first phase of virtual reality? Are you excited, disappointed or simply not interested?

Let me know by commenting below.