Going wide into the Canadian market with new 3D screens helped Cineplex Galaxy Income Fund get through a summer season of underwhelming Hollywood releases.

Cineplex Galaxy on Thursday saw its earnings for the three months to June 30 fall 12.5% to $17.4 million, on revenue down 2% to $243.7 million, this after going gang-busters through the economic downturn with high-profile Hollywood releases like Avatar 3D.

Poorly performing Hollywood studio releases forced total attendance at Cineplex locations countrywide to be down year-on-year by 8.2% to 16.7 million patrons, the company reported.

But here’s the zinger: Cineplex has aggressively super-sized the movie-going experience for Canadians, enabling the circuit to charge premium ticket prices for 3D movies, and so underpin its bottom line when its pipeline of Hollywood releases disappoint.

Cineplex was busy installing 3D screens in the run-up to Avatar 3D, and did 28% of the North American 3D business for the James Cameron¹s sci-fi epic, against a traditional 8% to 10% Canadian market share for Hollywood releases.

“We were basically very aggressive in 3D, we were one of the leaders,” Cineplex Galaxy CEO Ellis Jacob told Playback Daily.

“We outperformed most of the other circuits. Our focus was to go deep, rather than wide. So we went to a small footprint, but a lot more per location. It’s about giving people a choice,” he explained.

That meant installing 3D screens in major markets like Toronto, Montreal, Vancouver and Calgary, and putting as many as six 3D screens in any one multiplex.

The result is, during the latest quarter when underperforming titles like Lionsgate’s Killers and Fox’s A-Team steered Canadians away from the local multiplex, Cineplex Galaxy picked up the slack with fat ticket prices for Imax 3D titles.

The top five films in Cineplex locations during the quarter screened on Imax screens. And four of studio pics — Shrek Forever After, How to Train your Dragon, Clash of the Titans and Toy Story 3 — screened in 3D.

What’s more, the percentage of box office revenues earned from the 3D and Imax titles comprised 25.8% of Cineplex’s total box office results in the second quarter, up from 13.6% for the same period of 2009.

And Cineplex shows no sign of letting up on its digital rollout, however dependent it remains on successful Hollywood releases to drive ultimate performance.

The circuit added 42 digital projectors and 37 3D systems in the latest quarter. Cineplex now has 21% of its screens equipped with digital projectors and 17% of screens have 3D systems.

The Canadian exhibitor also opened a seven-screen theatre in Calgary with an XSCAPE entertainment centre, and Cineplex debuted a UltraAVXTM digital system in two locations, with another seven set to be installed by the end of the year.

Jacob told Playback Daily that he intends to get Cineplex to around 33% to 35% of its screens featuring 3D capability.

“There’s very few locations that by the end of the year will not have at least one 3D screens, and many locations will have multiple screens,” he predicted.