Rich Gelfond: Imax boss who started off shining shoes
- 24 June 2013
- From the section Business
As an eight-year-old boy Rich Gelfond used to shine shoes to earn some money.
At 16 he was running his own newspaper in New York, with a circulation of about 25,000. The paper attracted national advertisers and he would walk up and down Madison Avenue selling space.
As someone who showed such entrepreneurial spirit as a child, it is perhaps not surprising that he has ended up running a large and successful business.
Some 50 years on from his shoe-shining days, Mr Gelfond is now chief executive of Imax, the giant-screen, high-resolution cinema chain.
Underestimated the task
In 1994 he and business partner Brad Wechsler completed the purchase of the company.
The entrepreneur in him saw an opportunity to take what had up until then been a company focusing on large-screen film formats in museums and science centres, and take it into much more commercial venues and show more commercial films.
However, the task at hand was harder than they imagined, not helped by the fact Imax films traditionally had to be shot on special expensive cameras.
"Probably the biggest thing we underestimated was the history of the movie business. There was a 100-year history where studios and exhibitors did things a certain way and there was a real reticence to change," he says.
Mr Gelfond and Mr Wechsler met top directors, including Steven Spielberg and George Lucas, "to try and get them into the Imax business", but they were reluctant to change their way of doing things.
"Over a period of time... instead of trying to convince them to do their business completely differently, we evolved the company in a way that made it easy and cheap for them to get into our business."
This was mostly through technology and innovation.
For while shooting a movie with dedicated Imax cameras could cost about $10m (£6.4m) more than filming with standard cameras, the company later developed a way of converting standard films into the Imax format using algorithms. This can be done for about $1m.
On the theatre side, whereas it would have cost $3m to $4m to build a standalone Imax building, eventually they engineered a way to convert an existing auditorium for around $150,000.
Three breakthrough movies
And after almost 20 years under Mr Gelfond, the company has transformed into one that is now more known for its Hollywood movie showings than its education and science films.
Mr Gelfond points to three movies that helped increase Imax's brand profile among the public.
First, he points to Disney's Fantasia 2000, which he says was "a huge success, and that drove a lot of people to Imax theatres".
Second, he highlight's Warner Brothers' 3D Polar Express, released in 2004, because "the quality was excellent". Finally, he thanks Avatar, the James Cameron sci-fi movie, which came out in 2009.
"We only had about 150 theatres and we did $250m [from Avatar], which was by any measure an amazing box office success," Mr Gelfond says.
But as more and more films are being made in 3D, has this hurt Imax? Far from it, says Mr Gelfond, who notes that - as with two-dimension movies - Imax's version of 3D is also higher resolution than the standard-sized 3D.
"When it first happened [3D becoming more widely commercialised] of course you're concerned about how you adapt to change, but it grew the market. And we were the premium experience," he says.
In 2008 Imax had about 150 commercial theatres; today it has close to 700.
"Not only has the advent of 3D not hurt us, to some extent I think it's helped us," Mr Gelfond says.
Pushes and pulls
Describing his route to the top of Imax, Mr Gelfond says he was born an entrepreneur but was professionally trained "in the middle".
That refers to a number of business classes that he took and his training as a lawyer.
As someone who did well at school, he says he was sometimes torn between wanting to gain professional experience and wanting to work for himself.
"I was a good student. If you're a good student there's a very strong push to follow your professional career possibilities.
"But on the other hand, I always liked being my own boss and I felt these polar forces acting on me."
These forces are evident in his career. He left the law firm he worked for to start a chain of dry-cleaning stores when an opportunity came up, then went back to the professional path to work for an investment bank before deciding "to try and buy companies on my own and run them".
But he thinks he's a much better businessman because of his professional training.
"Professional experience teaches you about attention to detail and to take a degree of caution, to take a step back and [it gives you] perspective that you might not have if you didn't have that kind of training."
And perhaps it is that sense of perspective that now sets the boss apart from others at Imax.
"We are transitioning to a more corporate culture and I think some people in our organisation think I'm not doing it quickly enough," he admits.
While others would like to see more systems in place and more rigid lines of reporting, Mr Gelfond fears that if you try to do things too quickly you will lose the essence of who you are as a company.
"There's always a trade-off between an entrepreneurial culture and a corporate culture. And I think very few companies succeed at both," he says.
"I've deliberately made the decision that if I have to err on one side or the other, the last thing I want to do is beat the entrepreneurial spirit out of the company."