Reading handout
After its Odyssey, IMAX hits the big time
Words to know
prestige
preh-STEEZHQuote from the article
“Less fanatical directors still value the prestige that comes from their films being shown on IMAX screens.”
Meaning:Prestige is the respect and admiration people give to something because it seems special or important. A famous school, an award, or a well-known brand can all have prestige. In the article, movie directors want their films on IMAX screens because that name makes a movie feel important.
More examples
- Winning the state spelling bee brought a lot of prestige to our school.
- Some people pay extra for a brand because of its prestige, even when a cheaper one works just as well.
scarcity
SKAIR-sih-teeQuote from the article
“They have a scarcity value as well as a visual richness that cinephiles love”
Meaning:Scarcity means there is only a small amount of something, so it is hard to get. Things that are scarce are often worth more to people. In the article, only 41 IMAX screens use the giant 70mm film, so tickets for them are rare and sell out very fast.
More examples
- The scarcity of rainy days in the desert makes every storm exciting.
- Because the game console was in scarcity at the store, kids lined up before it opened.
premium
PREE-mee-umQuote from the article
“That, in turn, results in premium prices—though still far cheaper than a live concert or sports match.”
Meaning:Premium describes something of higher quality that costs more than the regular kind. A premium ticket or product gives you something extra, and you pay extra for it. In the article, an IMAX ticket costs more than a normal movie ticket because the experience is bigger and richer.
More examples
- My dad paid a premium price for the front-row seats at the game.
- The premium headphones cost twice as much as the basic ones, but they sounded much clearer.
Concepts behind the story
Shares
Quote from the article
“Nolanomics has underpinned a tripling of IMAX’s share price over the past three years.”
How can a company's value go up three times in three years, and who even decides that? The answer starts with shares.
A share is a small slice of ownership in a company. When a big company wants money, it can cut its ownership into millions of tiny slices and sell them. People who buy a slice are called shareholders, and they own a very small part of the company. Shares are bought and sold on a stock market, and the share price is simply what one slice costs right now.
The price moves because of what buyers and sellers think. If many people want a company's shares, the price goes up. If many people want to sell, it falls. Good news, like a hit movie, makes more people want shares.
Imagine a rare trading card that your class is trading. If everyone hears it was just used by a famous player, more kids want it, and its price in snacks goes up. A share price works the same way, with a company's slice instead of a card.
So the takeaway: a share is a slice of a company, and its price rises when more people want to own it.
In the article, IMAX's share price tripled because its movies sold so many tickets.
Leasing
Quote from the article
“It does not own or operate theatres. Instead it sells or leases its projection and sound technology to cinemas, then takes a cut of their revenue.”
Why would a company that does not own any movie theatres make money from them? One way is leasing.
To lease something means to let someone else use it for a fee while you still own it. The owner is the lessor, and the person paying to use it is the lessee. You see this with apartments and with a rented bike. The one who owns it gets paid over time instead of selling it once.
A company can also take a cut of the money the other side earns. That means it gets a share of each ticket sold, as well as or instead of a set fee.
Imagine you own a great pair of soccer goals. You do not run a team. You lend the goals to your school, and in return you get a small part of the snack money from every game. The more games happen, the more you earn, and you never ran a single match.
So the takeaway: leasing lets an owner earn money from something others use, and a cut means the owner does better when the users do.
In the article, IMAX leases its screens and sound systems to cinemas and takes a cut of their ticket money.