RoboCop 3D and the Battle over Bigger Big Screens in China

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Imax Corporation, the Canadian company responsible for introducing giant movie theater screens, has become embroiled in a legal battle with a Chinese competitor that offers similar (perhaps too similar) technology at a fraction of the cost. The outcome could affect the relationship between film production companies and long-time business partner Imax – as well as international distribution of Hollywood movies and prices at the ticket window.

Montreal-based Imax claims that former employee Gary Tsui stole trade secrets that led to the creation of China Film Giant Screen (CFGS), an emerging player in the large-format screen industry that Imax dominates. CFGS entered the playing field in 2012, showing off its products at the Cannes Film Festival and promising to disrupt the Imax “monopoly” by offering bigger big screen technology on a budget.

Further infuriating Imax executives is another entity, Beijing Cubic Pictures Technology, which converts large-format video to 3D by allegedly copying Imax’s 2D to 3D conversion methods. The company filed suit against Tsui last August.

The chief engineer at CFGS, Tsui is also the founder of Cubic Pictures.

“Tsui worked as a software engineer for Imax in Mississauga, Ontario from 1999 until 2009,” wrote The New York Times. “That year, he gave notice of intent to quit, but was immediately fired after it was learned that he had started Jiangsu Sunway Digital, a company that was bidding for giant-screen business in China at a price cheaper than that offered by Imax.”

The Times added, “A search of Tsui’s computer revealed his ‘rampant use’ of its trade secrets in starting Sunway, which Imax said eventually ‘morphed’ into CFGS.”

Despite the ongoing legal battle, CFGS and Cubic Pictures have attracted the attention of Hollywood production companies and international film distributors. The upcoming remake of cult sci-fi action movie RoboCop, made by MGM and distributed by Sony, will be shown on CFGS screens in China. A 3D version of the film will also be exclusive to China – courtesy of Cubic Pictures.

Imax CEO Richard Gelfond said that the company would more than double its giant screen presence in China over the next five years – from 150 screens to 400. China surpassed Japan as the world’s second-largest film market in 2013, with $3 billion in ticket sales.

“I feel like I’ve got the wind at my back,” Gelfond told Bloomberg last November. “I’m a huge China bull.”

Gelfond also announced a partnership with Shenzhen-based TCL Multimedia Technology that will bring Imax-powered home theaters to wealthy Chinese movie buffs. Production will begin in 2015 and the installations will cost a hefty $250,000.

Imax’s CEO better hope that Canadian, Chinese and American courts rule against CFGS and Cubic Pictures – otherwise the cost-cutting Chinese rival might start offering its own home theaters for $200,000.

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