Thursday, March 24, 2011

The Digital Revolution

There are all sorts of issues facing our industry these days. You probably hear about these things in the news: Piracy, VOD, release windows, D-Cinema.  The issue that I am faced with right now and that I spend the most time thinking about is "Going Digital."

Right now, the Eltrym runs 35mm film, as it has done since 1940.  The projectors we use were patented in the 20's.  The technology is stable and safe, and best of all it is mechanical.  That is an important factor when you are located in rural America, far from any cinema techs. Because it is mechanical I can make repairs by myself. I can talk to a tech on the phone and they can walk me through how to locate a broken part, remove it, fix or replace it and how to reassemble it.  With a digital projector, that won't be possible. Why? Because I know very little about making repairs to computers. Usually when my computer starts to have problems I buy a new one.

The reason our industry is moving toward digital is, basically, to save money for film distributors. 35mm prints are big, bulky and heavy; they are expensive to produce and expensive to move around.  Studios want  to do away with this bulk and move to a more streamlined digital model. This way they can spend less on materials, shut down facilities, cut a few jobs and save lots and LOTS of money.

While it saves them lots of money, it costs your local movie theater a ridiculous amount of money to change over. The sum of money required to purchase digital projectors and convert a facility is so ridiculous that it is obscene. Seriously, I typed out the number here and then erased it because it felt dirty.  There are a lot of old theaters in our region that have been owned by the same families for years, and those families are now faced with the idea of going back into major debt to convert. Theaters owners like us are already in debt, having just purchased our facility, but we are now faced with how much debt we want to take on. Will we be able to make it cash flow? How loud will my banker laugh when I ask for that much money?

The studios have thrown us a bone, sort of, called a VPF or Virtual Print Fee.  They say they will give you payments for showing digital prints. Of course, they won't give you any concrete figures of how much money is involved in VPF payments or make any promises, and those VPFs are only available for a limited time.

It is a confusing time for a small independent theater owner.  I had one tech come here and tell me "You should go digital ASAP, it will save you so much trouble." The next tech through the doors says "Don't worry about going digital for a few more years, wait until you NEED to convert."  We pay membership fees to two organizations that represent theater owners, and they are pushing a certain financing deal--that we don't qualify for.  And I sit here all day thinking, if I'm going to spend a gazillion dollars on this place, I'd rather spend it on new flooring and seats (and replacing just about everything else we own, since we are talking that kind of money).

There is an upside to digital which is alternative content. With a digital projection system, you can buy into live telecasts of wonderful things like opera and sporting events, and broadcast them over your theater system. That is something we aren't able to do now with our media projectors, because there isn't a way for us to appropriately pay for these telecasts and pipe them into our system.

So now we are studying up on our financing options and crossing our fingers that the cost will come down a bit in the next couple of years.

And if you are concerned that your local theater owners won't pony up and will walk away and close the doors, don't worry about that.  I'm committed.

(But if you are reading this and if you happen to be a billionaire and if you happen to be interested in making a "charitable donation" for tax purposes, my number is 523-5439. Call me and lets talk.)


1 comment:

  1. Film looks so much better than "digital technology". I have seen both and if the Eltrym were to go "digital" I would not go back. I do not support them because if I wanted that I would stay home and watch TV. I want emulsion lines, I want crackles in my sound, I want splices, I want sudden booms where the splice was done wrong, to me that is all part of the movie going experience. You take those things away and you got Television! Now who wants to go see that, all these people that really don't like the "theatre". It is a shame that the movie industry has lost it's "art". Its all about money, not about the product. Anyone can buy a digital projector and run it on a screen, but it takes talent to run film.