The companies shares traded on the Canadian and New York stock exchange soared with the news, the company had already presented a healthy financial book for 2005 (fourth quarter earning of $12million) and was looking towards a strong expansion plan - industry sources claiming a $650 million price tag on a all out company purchase. The company has leased their unique IMAX theatre package to over 266 facilities worldwide, the company having in recent years expanded their portfolio of film experiences to include motion pictures specially presented on the large screen display system (IMAX embracing the Digital Theatre delivery system).

The key financial houses who have invested in IMAX started a process of hiring financial advisors to monitor and control the process of casting for interested parties that should be included to a list for IMAX business and properties. A long list of candidates was created by industry pundits, with Microsoft, Warner Brothers, Apple Computers and SONY mentioned. That a partnership was mentioned in initial statement led many to observe that IMAX (which is in reasonable shape) may actually be looking for a partnership to help define their expansion in a changed motion picture market.

Observers of the cinema sector seemed to speculate that the writing had been on the wall for IMAX, and that it may have been an unconfirmed approach to IMAX investors by projection corporation Chrisitie. The projection company had undertaken an immense move to dominate the installation of the Digital Theatres across America (estimated as a 2,300 screen project in conjunction with AccessIT - for Carmike Cinema, the third largest theatre chain), undercutting possible competition to dominate the placement of this technology; in merging with IMAX the operation could be hoping to dominate the production market. However the ‘digitization’ of the US theatre business has become drawn out with only 300 fully digital venues of the over 36,000 available sites, at an estimated $100,000 cost per screen - estimated to take another five years.

Christie/AIX - the name given to their digital cinema deployment turnkey system to be deployed into the cinema theatre sector, with already five of the largest film studios supporting the concept (Sony, DreamWorks SKG, Disney, Universal, and Fox); that could see the majority of screens supporting the non-projectionist operated system, with internet delivery. It is interesting that Paramount and IMAX the only major film suppliers not to support the standard (though Paramount has recently acquired DreamWorks). AccessIT's Christie/AIX represents a funding group and administrator for the company's 4,000-screen digital cinema rollout plans originally announced in June 2005. Competitor in the ‘digitization’ is Technicolor, who hopes their higher quality high-rez 4k projects (against Christie/AIX’s 2k) will offer them final success - a second name linked to possible interest in IMAX.

The inevitability of that IMAX would have to protect themselves against the invasion of Digital Theatre, for IMAX depends on its large (and complicated) delivery system, the large format film platters proving cumbersome to a movie industry looking at the ‘death of the projectionist’ and digital delivery systems. IMAX also was caught in a paradox that means that as cinemas move to less and less complexity IMAX - even embracing their new digital movie delivery system still represented a complicated system, their one winning technological feature (3D) being stolen by the conventional theatre.

TSR has covered the IMAX Corporation in detail (Stinger #438) and the recent legal battle that it had started with In-Three Inc., regarding a claim of Infringement of the IMAX 3D film conversion process, currently used to be able to play conventional media on the large IMAX 3D screens. An agreement between the two operations ending in acrimony; other operations that IMAX has had relationship with include SONY, IMAX having established a relationship regarding eh placement of IMAX sites at SONY controlled venues, but this agreement had wavered.

IMAX has hemorrhaged a vast amount of money since their flotation. What would have been expected was an industrious rollout project in the late Eighties, but a sad departure in to infrastructure, and unusual new product lines wasted considerable sums. Most notably was the IMAX simulation business that saw a basically good idea of Dome based simulation squandered by investment in simulators with Doug Trumble and the development of feasibly poor attractions. The excremental ‘Orthogonal Simulator’ project, linked to the ‘Contraptions’ interactive system proved examples of vast money wasting endeavors.

The business in freefall forced IMAX to focus on core-business, and in the end the simulation business was sold to fellow Canadian operation SimEx, jettisoning the Trumble involvement. In California IMAX had also signed agreements with iWerks that in the end would also be acquired with SimEx that would result in a vast inventory of post product equipment and talent residing there.

Part of the iWerks inventory when SimEx acquired the troubled Californian developer involved a number of IMAX projection systems. However for SimEx Large Format development is a fraction of the business model and so unlike IMAX the diversity of digital, 3D and large format builds in protection of a changing market.

For IMAX the decision to move was brought to them by their chief investors and a mystery approach. Speculation is that possibly one of the largest of the projection companies in the digital theatre revolution has made approaches to IMAX parties towards acquisition / merger. For those investors the writing is on the wall that with the ‘death of the projectionist’ and the adoption of non film theatre systems IMAX could be turned into a ‘dinosaur’ with a limited available film pool - no matter the growing expense of digital ‘large screen’ motion picture development.

As a conservative estimate is that the majority of motion picture theatres will be completely digital by 2008, the prospect of those sites being easily configured to show 3D films, IMAX will need to offer 3D and a big screen display to survive as the cinema industry fight to address a decline revenues in 2005 reported as $9bn, while total attendance fell by 9% to 1.4bn guests.

It was observed that the IMAX revelation came conveniently close to the leading exhibition motion picture technology conference (ShoWest) - speculation was high that a possible suitor would be revealed then, along with the possible change in how amusement plays a part in cinema venue revenue.