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Netflix, Inc. (NFLX) Finally Convinced IMAX Corporation (USA) (IMAX) To Take The High Road and Live Dangerously

Netflix, Inc. (NASDAQ:NFLX) and IMAX Corporation (USA) (NYSE:IMAX) embark on a venture in which the fates of the two companies seem dangerously intertwined together. Rich Gelfond, CEO of IMAX Corporation (USA) (NYSE:IMAX) talked about the simultaneous release of the sequel to ‘Crouching Tiger and Hidden Dragon’ with Netflix, Inc. (NASDAQ:NFLX), on CNBC.

Netflix, Inc. (NASDAQ:NFLX)

While the news of an original movie is clearly a source of jubilation for Netflix, Inc. (NASDAQ:NFLX), which has been given the chance to test the unchartered waters of the film industry, the same cannot be said about IMAX Corporation (USA) (NYSE:IMAX). From his interview it seemed that Gelfond has agreed to this deal in good ‘corporate spirit’. However, there is no such thing as good spirit in the business industry when it comes to risking a company’s revenues by forming new competitors. The decision could potentially drive  IMAX Corporation (USA) (NYSE:IMAX) into the grave.

Gelfond didn’t hide the fact that he was concerned about this deal with Netflix, Inc. (NASDAQ:NFLX). He also explained how the involvement of Netflix, Inc. (NASDAQ:NFLX) in this film release has led IMAX to change some rules for its exhibitors.

” […] Of course I have concerns, that’s why I have called it an experiment. We will see what happens. More important point is that under many of our contracts the exhibitors have to play IMAX content, but in this case we are not going to do that, because there are some sensitivities to this simultaneous release […],” said Gelfond.

It took Netflix, Inc. (NASDAQ:NFLX) a considerable time to finally take a bold step as this one. Gelfond mentioned that the two companies had been thinking about various other movies as well for about a year, but none of them stuck except this one. There is one thing going in IMAX Corporation (USA) (NYSE:IMAX)’s favour as well. The date for the movie release is the most sluggish time of the year for cinemas and hence IMAX might not be missing out on enormous revenues.

Disclosure: none

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