This year could be a good one for Imax (IMAX) .
The large-format theater company's core business is positioned for a strong rebound, while new initiatives enter their launch phase, says MKM Partners Managing Director Eric Handler. "We see a clearer path for Imax shares to move higher over the next few quarters," he wrote in a recent note. While focus remains on the core business, the company is exploring other initiatives such as virtual reality to drive future growth.
Last month, Imax opened its first virtual reality hub in Los Angeles and is planning to debut five more VR pilot centers in the U.S., the U.K. and China by the year's end.
VR was a natural fit for Imax as its well-known brand is associated with immersive experiences says Rob Lister, the company's chief business development officer, to TheStreet.
With the Los Angeles VR hub, Imax wanted to get a "first-mover advantage" and gauge whether consumers are really interested in it, he said. If the pilot period is successful, the company could roll out VR experiences globally.
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The consumer proposition for VR has been a "difficult" one so far, Lister said. A VR headset from Oculus or HTC Vive costs upward of $600 and requires a PC with enough processing power to drive it. "That's a very expensive proposition," he said. "Our approach to this center was, let's give people an opportunity to have their first experience in VR without having to make that material investment."
The Los Angeles hub offers about 12 different VR experiences across 14 pods, costing between $7 and $15 and ranging from seven to 12 minutes. The offerings include options for multiple players, kids and sports and movie-themed games, such as its "Star Wars" experience.
In contrast, the five VR centers slated for this year in cities like New York and Shanghai will be at multiplex theaters rather than stand-alone hubs. The pods will either be in a retrofitted auditorium or located within the lobby.
VR pods could help attract consumers to movie theaters, especially Millennials. Millennials have had less movie theater experiences than previous generations because they have so many other options for content. Providing VR experiences and new digital and interactive content is a good way to keep movie theaters "vibrant," Lister said.
Imax dabbles in virtual reality