• The Wall Street Journal, Thursday, November 8, 2007 12:31 PM

Imax, which has a 40-year head start on the competition for large-format 3-D films, demonstrates how ahead-of-the-curve technologies can find themselves in danger of being leapfrogged when something new comes along.

In the case of 3-D films, many of the nation's 4,000 screens equipped with digital projectors can show those movies at a fraction of the cost of the Imax system. Film studios are helping finance the rollout of the digital projectors, making them essentially free for theater owners. In contrast, if a theater wants to install an Imax system, it pays around $250,000.

Imax is taking a number of steps aimed at holding onto its franchise. Next year, it will begin rolling out its own digital technology, which will make it easier and cheaper to tinker with movie schedules. Using digital files instead of clunky film reels--which in the case of Imax weigh 5,800 pounds each--Imax theaters can quickly add another movie to play on an Imax screen. And digital technology will dramatically lower the cost of individual movie "prints" for both Imax and standard movies.

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