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Big media mergers will lead to more blockbuster movies, says Imax CEO

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Key Points
  • Media mergers will lead to more blockbuster content, says Imax CEO Richard Gelfond.
  • Three years ago, blockbuster movies accounted for only 25 percent of the box office. Gelfond says it's now more than 30 percent of the box office.
  • The CEO says he thinks streaming companies like Netflix will one day show content directly at Imax theaters before streaming on their own platform.

Imax CEO Richard Gelfond said Wednesday that large-scale media mergers will lead to more blockbuster movies and TV shows.

"The middle companies are going to compete with the streaming companies, companies like Lions Gate," Gelfond said on CNBC's "Closing Bell." "And I wouldn’t be surprised to see some of them get sold as these streaming companies pick up more of that service."

"On the high end, you’re definitely going to see Netflix and Amazon and Hulu and Apple go toward creating big blockbuster content," he said.

Gelfond called an acquisition of Twenty-First Century Fox by Walt Disney "inevitable" and said the movie business is going "toward more and more blockbusters," or big-budget movies with high-profile stars.

Three years ago, blockbusters accounted for only 25 percent of the box office, but today they take up more than 30 percent, Gelfond said. That's big business for global box office revenues, which were around $38 billion in 2016 but are expected to reach nearly $50 billion by 2020, according to Statista.

"You have to go big to compete," Gelfond said.

The long, drawn-out media bidding war for Fox assets appeared to near an end on Wednesday after Disney won U.S. antitrust approval to buy the company for $71.3 billion on the condition that it sell 22 regional sports networks.

Only a day early, Disney raised its bid — originally at $52.5 billion —to top Comcast's bid of $65 billion.

Jeff Greenberg | Getty Images

The Imax CEO said he envisions a day when new media streaming companies, like Netflix and Hulu, will have their content go directly to Imax theaters rather than stream on their own platforms.

"There’s no question that [new media companies] are all going to provide blockbuster content," he said. "And I think in a windowed way," he said, referring to the term used to describe the period of time a specific media is allowed to be screened.

"Look at 'Avengers,'" he said. "There’s going to be merchandise, sequels, theme park rides, and I think the Netflix model is likely to change in the long run. Amazon respects windowing. As does Hulu. We’ll see about Apple."

Netflix could not immediately be reached for comment.

— Disclosure: Comcast is parent company to CNBC and is a co-owner of Hulu.