The future is here. And it isn’t cheap.
Theaters around town and across the country are converting their 35 mm projection systems to all new digital systems. While the move may be seen as necessary for many operators, it can cost as much as $100,000 per screen, according to Dennis McIntire, director of strategic planning for Liberty-based B&B Theatres.
This week, McIntire is preparing for the Nov. 4 opening of B&B Theatres Ozark/Nixa 12. He said the company is investing roughly $1 million to install a fully integrated digital projection system at the new movie house. B&B should finish its companywide conversion to digital at its 30 theaters in five states by the end of the year, he said.
Its Ozark theater is outfitted with 12 digital projectors connected to servers, sound processors and amplifiers, and two computers for each projector. All of it is wired to a library management system, which McIntire calls “the brains” of the theater’s system. The new system allows equipment installers and manufacturers to monitor the equipment from afar since it is all connected to a modem.
“For an old projectionist, it’s scary, because I could look at a 35 mm projector and see what’s wrong with it. A circuit board – I can’t look at a circuit board,” McIntire said, noting staff will be on hand to monitor the equipment and make changes as needed.
According to Michael Karagosian, president of Calabasas, Calif., digital consultancy group MKPE, the U.S. reached the tipping point in digital conversion this summer. By August, Karagosian said half of theater owners had converted to digital projectors.
The development of international standards for digital cinema began in 2000. But it wasn’t until 2005 – when the top six studios in Hollywood worked together to release digital specification standards through a joint venture called Digital Cinema Initiatives – that movie houses began to seriously consider making the switch, Karagosian said via e-mail. Disney, 20th Century Fox, Paramount, Sony Pictures Entertainment, Universal Studios and Warner Bros. Studios comprise the DCI cooperative, according to
DCIMovies.com.
McIntire said the decision to install a new digital system at the theater opening in Ozark was “a no-brainer.”
“The life expectancy of that building is a minimum of 30 years, and in 30 years there is going to be no more 35 mm film,” he said.
Mike Stevens, executive director of nonprofit art-house Moxie Cinema, said the expense to convert the downtown theater’s two 35 mm projectors to digital is too much to bear.
“It’s incredibly expensive to convert to the specs that have been set up by the studios,” Stevens said. “Theaters like us … are having difficulty making the transition.”
Stevens intends to wait at least three years before making the switch to digital.
“Digital projection is amazing and, guess what, it is twice as good as it was four years ago,” Stevens said. “Four years ago, people bought digital projectors that are out of date.”
Bill Menke, executive vice president and chief operations officer for St. Louis-based Wehrenberg Theaters, said the company is in the middle of a nearly $10 million conversion at its 15 theaters. Six of the theaters have been fully converted, and all of Wehrenberg’s sites, including Springfield’s Campbell 16, should be fully digital by Nov. 20, Menke said. Springfield’s theater has operated with four digital screens since 2009.
“Guests can expect to see a pristine digital image on the screen each time they visit. No more jumpy film because of the mechanical projection the films utilized,” he said. “We’ll have the quality of the image to meet that of the digital sound systems that we’ve had in theaters for the past 15 years.”
Another benefit cited is that digital formats allow the theaters to book alternative content such as sporting events or concerts. Still, Menke admitted the move is not without challenges. “It is a difficult thing to wrestle with – the cost of retooling or retrofitting – whether you are a manufacturing company or a movie theater,” he said.
Menke said Wehrenberg’s financial burden is lightened through an agreement with DCI that allows the theater to recoup some of the expense through studio reimbursements based on the number of times a film is shown on its digital screens. He declined to disclose the terms of its deal.
Converting to digital projection systems is part of ShowPlex Cinemas Inc.’s $4 million renovation and expansion at the Springfield 8 on East Montclair Street. That project, which is expected to wrap in time for the Nov. 18 release of “Happy Feet 2,” also includes two standard auditoriums and a 300-seat IMAX auditorium.
Patrick Corcoran, director of media and research for the National Association of Theater Owners, said theater operators who convert all of their screens to digital are eligible to earn what are called virtual print fees from the studios that can help operators recover up to 70 percent of their conversion expense during the next decade.
“The benefits of digital distribution, monetarily, all go to the studios,” he said, adding that studios can save up to $1 billion per year because the cost of producing a single 35 mm print can cost up to $1,500 compared to a digital hard drive cost of nearly $100. He said conversion typically costs theater operators about $75,000 per screen. “It was important that (studios) contribute something to the cost of conversion,” he added.
To qualify for VPFs, Corcoran expects that theater owners would have to be fully digital by the end of next year because the studios are demanding a sunset on those fees. He added that as fewer people use 35 mm prints, the cost to produce films rises.
The National Association of Theater Owners has helped in forming the Cinema Buying Group, which currently represents 6,000 screens of independent operators to form a united front to qualify for fees that larger chains typically would receive.
Consultant Corcoran expects the major studios to stop producing film for the domestic market by the end of 2013. Right now, about 300 screens are being converted every week to digital systems, and nearly 60 percent of all domestic screens have made the switch, he said. “The reckoning is on the way,” said Stevens at Moxie Cinema. “As soon as distributors stop making 35 mm prints, then the rubber will meet the road and we’ll have to figure out how to finance a transition.”
Until then, he said the theater’s 35- and 42-year-old projectors would continue spinning film reels.[[In-content Ad]]
