IMAX CEO Defends Netflix 'Crouching Tiger' Sequel After Major Theater Chains Refuse To 'Participate In Experiment'

IMAX is sticking to its plan to team with Netflix and The Weinstein Company to release the sequel to “Crouching Tiger, Hidden Dragon” in theaters worldwide on the same day the film will be available on Netflix. On Tuesday, the country’s biggest theater chains each announced their refusal to carry the sequel in theaters -- an act of protest against what the chains view as a threat to their business.

IMAX CEO Richard Gelfond insisted in a statement on Tuesday that the chains -- Regal, Cinemark, Carmike and AMC -- need not resist the changing distribution models.

“The hand that feeds us is filmmakers and studios and content providers,” Gelfond told The Wrap on Tuesday. “Theaters are our partners, and by bringing additional content to the market, I think it helps the market and I think it's helping them. I understand change isn't always the easiest thing in the world, it's easier to stick with the status quo, but on the other hand, if you don't try to change you get stuck in a certain place. We made our reputation by innovating.”

Those involved in the unprecedented co-production have downplayed the impact it would have to theater ticket sales. Ted Sarnados, chief content officer at Netflix, told the New York Times Monday that streaming a movie at home and watching it in 3-D in an IMAX theater are “two different experiences, like going to a football game and watching a football game on TV.”

Film critic and columnist Gary Susman agrees. “Confronted with a choice between IMAX and streaming, people who want to stream it are people who wouldn’t have shelled out extra bucks for IMAX showings anyway,” he told IBTimes. “People who do go see the film on the IMAX screen are those who would have done so anyway because they prefer the immersive format enough not to mind the expense. It’s cheapskates vs. cinephiles, if you like -- two different audiences. They’re not going to cannibalize each other.”

But the theater chains aren’t buying it. In a statement on Tuesday, Regal’s VP of Communications, Russ Nunley, said the chain “will not participate in an experiment where you can see the same product on screens varying from three stories tall to 3 inches wide on a smart phone. We believe the choice for truly enjoying a magnificent movie is clear.”

As numerous reports on the “Crouching Tiger” sequel have pointed out, theater chains are intensely resistant to reducing or eliminating the windowing system of theatrical distribution, which typically gives theater chains three months with each new release before it can be distributed on DVD, cable, VOD or a streaming service.

“Crouching Tiger, Hidden Dragon: The Green Legend” being shut out of major theater chains doesn’t necessarily mean the experiment will fail. “In China, where they don’t have Netflix, this will be a purely theatrical play, and it’s clearly where the studio expects to make most of its money,” Susman said. “The North American market is an afterthought, one small enough that the studio can afford to do this kind of experiment without the risk of doing much damage to the worldwide box office total.”

Gelfond reinforced this notion to The Wrap. “Remember, we're a global company, 60 percent of our revenues are from international sources,” he said. “In China, there is no Netflix, so this can play in all our theaters in China if it gets through the quota. That could be 200 theaters in China alone.”

“This is a test, and I can't tell you for sure that it's going to work,” he continued, “but I can tell you for sure that attempting to innovate is a good idea because as technology changes, viewers change, and we have to figure out what does or doesn't work.”

For his part, Susman thinks the theater chains should get on board with these changes, however threatening they might appear. “It was inevitable … that one day, a major wide-release-type movie was going to hit Netflix on the same day as it hit theaters,” Susman said. “The exhibitors can pout, but they can’t stop the locomotive. They need to figure out a way to get on board or be left behind.”