Small movie houses struggle with switch to digital

05:00 AM, Jul 23, 2013

Posters with popular quotes from movies decorate the walls June 11, 2013, at the Little Theatre in downtown Rochester. The posters are part of the theater's fundraising campaign that will help it convert to digital. Shawn Dowd, Rochester (N.Y.) Democrat and Chronicle/


Written By by Matthew Daneman, USA TODAY

ROCHESTER, N.Y.Movies love calamities — from families breaking apart to fire-breathing giant monsters stomping Tokyo.

Now, many of the nation’s small and independent movie theaters are facing a calamity of their own: The reels of film they have screened for decades are about to disappear, elbowed out of the marketplace in a growing use of digital technology.

The cost of bringing in digital movie projectors to replace traditional 35-millimeter film projectors “is a huge problem … especially for independent theaters that have only one screen,” said General Manager Susan Rogers for WXXI-TV, -FM and -AM as she walked through the public broadcaster’s five-theater movie house. The Little Theatre is in the midst of a major fundraising campaign to pay for converting to digital.

Obtaining film prints of movies is set to become very hard this fall and nearly impossible next year.

You’ve got no choice, or you have to shut the theater down,” said owner John Trickey of Cinema Theater here, which is now trying to figure out how to foot the bill of going digital.

In the 14 years since the first digital movie theaters opened their doors in New York and Los Angeles, digital projection has become the norm. According to Digital Cinema Implementation Partners LLP, a joint venture of the AMC, Cinemark (CNK) and Regal (RGC) theater chains, those chains expect to be completely digital this year.

But the huge cost of going digital can be a major hurdle for small players.

The Little, which in recent weeks has been partially shut down as it converted four of its five screens to digital, has raised roughly $321,000 of the $500,000 needed to convert screens 2 to 5 — most of that in the form of a $180,000 pledge in 2012 from New York state through the Finger Lakes Regional Economic Development Council.

Converting screen 1 in a historic building will cost hundreds of thousands more because it also needs extensive renovation work, Rogers said.

Numerous community movie houses around the country — from Monte Rio, Calif.; to Milaca, Minn.; to Onarga, Ill. — have tried public fundraising campaigns to pay for new digital projectors through such websites as Kickstarter.com. They have had with varying degrees of success. The National Association of Theater Owners did not return messages seeking comment.

While a projector might be had for around $50,000, installation and other costs are easily in excess of $10,000, Trickey said. And the dimensions of his theater require a special lens, adding thousands more to the final bill at a movie theater that, at best, breaks even.

To help cover those costs, Trickey said community groups have talked about a couple fundraising efforts and perhaps a small grant or low-interest loan from the city.

Traditionally, movie theaters receive boxes holding several reels from a movie distributor with the theater then splicing those together into one big reel the diameter of a truck tire. A two-hour film represents roughly 10,000 feet of film. With digital, theaters instead often get a computer hard drive or even a Blu-Ray disc containing the movie.

The Cinema, which already has had difficulty finding prints of some films, expects that problem to become more difficult this fall. Whatever prints studios do put out for the U.S. market likely will be available only in major markets like New York, Los Angeles and Chicago, Trickey said.

The Little also has had increased difficulty getting film prints, lead projectionist Chris Hogan-Roy said.

Digital has some advantages for theaters: The image never degrades even after multiple screenings while film will show scratches, wear and tear. If demand for a movie is greater than expected, a theater can add additional show times on the fly, said Russ Nunley, vice president of marketing and communications for Regal Entertainment Group.

Previously, you had to have film shipped in,” he said. “All that was very cumbersome.”

For studios, going digital represents big cost savings. Making and shipping 35-millimeter prints is far more expensive compared to shipping a hard drive, Nunley said.

However, the studios’ savings means sliding sales for Eastman Kodak Co. (EKDKQ). The Rochester-based printing and imaging company is the dominant manufacturer of entertainment imaging film on the planet — especially since rival Fujifilm got out of the business in March. The company’s Entertainment Imaging and Commercial Films business represented 10% of total sales in 2012, down from 13% in 2011 and 14% in 2010.

But even as U.S. theaters go digital, film still has some life left. Numerous nations outside the U.S. have yet to convert, and about 1 in 5 screens in the United States use film, said Andy Evenski, who oversees Kodak’s entertainment and commercial films unit.

You come out with a major movie like Man of Steel, you’re still going to use some print film,” he said. “We’re very strong in Latin America and in the emerging markets. In some of the developed areas, like Europe, are they fully converted over? No. Greece is in the low 20s” in percentage of theaters that have gone digital.

In recent weeks Kodak has signed purchase contracts with several major Hollywood studios, which have committed to buying Kodak motion picture film products through at least 2014 or 2015. And Kodak’s plan to emerge from bankruptcy has it still in the entertainment imaging business at least through 2017.

But increasingly, Kodak’s entertainment imaging is focused on pitching it as an archive for contemporary motion pictures because today’s digital movies could become inaccessible as formats change.

The Little’s renovations still left film projection systems in theaters 1 and 5.

We’re not letting go of film,” Hogan-Roy said. “We know the cinephiles love film. So we’re going to continue to have that. There will be special events that will be only film. It opens us up to a whole world of archives we can start to have we couldn’t have before.”

When the Cinema converts to digital sometime in the near future, Trickey said he also hopes to use that as opportunity to play with the second-run theater’s programming and have occasional screenings of modern classic films.

But with technology advancing ever rapidly he worries that a pricey digital projection system might soon need to be replaced with a new generation of movie theater technology, projectors using lasers.

To put that kind of capital into it and then to think the possibility that in five, six, seven years it could be obsolete, that’s hard to think about,” Trickey said.

Matthew Daneman also reports for the Rochester (N.Y.) Democrat and Chronicle.