Articles & Notes — January 8, 2013 at 12:53 pm

Film industry forcing U.S. theaters go digital or close down

movie-theaterThe theaters in the U.S. continue to fight for their survival against movie industry’s will to forget film, and go towards digital projection.

Co-owner of the Colonial Theater in Belfast Maine, Michael Hurley has recently said that up to 20 percent of theaters in North America, representing up to 10,000 screens, would not convert and would probably close.

John Fithian, CEO and president of the National Association of Theatre Owners has put it more clearly: “Convert or die”.

Small movie theaters however struggle to keep the lights on. For them, where the profits are not high in the first place, the expense of changing to digital is simply too expensive.

For the past few years, movie studios have been extolling the virtues of digital projection systems: lower distribution costs, immaculate picture quality, easier maintenance and even increased safety (film is flammable).

Theaters have been making the conversion, and 2013 may be the year the process comes to a close.

The director of media and research for the National Association of Theater Owners, Patrick Corcoran told CapeNews that coverting to digital distribution saves the movie studios about $1 billion every year, so the studios are contributing through financing plans which will cover about 70 percent of the conversion cost.

“The cost of producing a digital hard drive is about a third as much as producing a 35-millimeter print,” Corcoran said. “It’s  possible to make the hard drive and distribute it to the theater for about $500.”

“While the cost of each 35-millimeter print is between $1,500 and $2,500, it’s possible to put a film on 1,000 screens for a third of the cost,” he said. “The hard drives are also reusable, he said, which saves the movie studios money over time.”

Corcoran added, that nationwide, about 64 percent of the 5,732 movie theaters have already converted to digital projection.

“Those theaters make up about 80 percent of the 40,000 screens in the country,” he said.

John Fithian, CEO and president of the National Association of Theatre Owners told USA Today recently that the move to digital movies has been in the works for a decade.

Fithian said in the article about 31,135 of the nation’s 39,908 movie auditoriums, or about 78-80 percent, had made the transition to digital projectors.

Some theaters are financing the conversion through third-party groups that pick up the tab and are reimbursed by theater owners and through fees paid by movie studios, according to the USA Today article.

“Because theaters must meet certain profit levels, it can be difficult for owners of small movie houses to qualify,” Fithian told the USA Today.

TURNING NON-PROFIT?

In one small town, a group of residents are trying to save the lone movie theater, turning the commercial theater into a nonprofit.

Debby Ebke is the treasurer of the Bonham Theatre Project, which is trying to save the lone movie theater in Fairbury, Nebraska. The group is accepting donations to convert to digital projection and remodel the 86-year-old building.

“It’s an economic issue for the whole town,” Ebke said. “It’s important to maintain any type of entertainment to keep young people in our community.”

So far, the group has raised $15,000, and they are accepting in-kind donations. Some local farmers have pledged grain, and livestock are also accepted.

DRIVE-IN THEATERS

Drive-in theaters in the U.S. seem to have the exact same problem. According to United Drive-In Theatre Owners Association, there are under 500 such theaters left in the world today.

368 of them are in the United States, and just over 50 in Canada.

Owner of the “Skyview” Drive In theater Steve Bloomer told BZFilm in September 2012, that the problem for the survival of a lot of drive-ins is the forced conversion to digital projection.

“There are a lot of mom & pop drive ins that are living on a shoestring that won’t be able to afford the cost of this conversion. They will just close up,” he added.

“It would not surprise me, if 25 percent of existing drive-ins are gone in a couple of years.”



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