Route 66 News

Tough miles ahead for old theaters, drive-ins

Michael Phillips of the Chicago Tribune┬átells about an upcoming development that likely will lead to a rough era for drive-in theaters and older movie houses — digital film distribution.

According to the article, the Route 66 Twin Drive-In in Springfield, Ill., remains the state’s only digital-projection drive-in. Obviously, the SkyView Drive-In on Route 66 in Litchfield isn’t digital, and it’s probably safe to say the other surviving drive-ins on Route 66 — 66 Drive-In in Carthage, Mo., and soon-to-be-rebuilt Admiral Twin in Tulsa — aren’t digital.

Some stark data about theaters converting from film to digital:

Right now it costs about $75,000 per screen to convert to digital projection. That’s $150,000 (lower if he waits a couple of years for used equipment) for a weather-dependent outdoor theater open four or five months out of the year […]

Film distributors commonly spend $1,200-$1,300 to strike a single 35 mm print, plus shipping costs. Digital delivery of a new release, by contrast, is more like $100, according to Cinedigm’s McGurk.

The studios have been steamrolling this one for several years while squabbling with exhibitors over the bill for the digital conversion tab. The industrywide conversion to digital has been financed by what’s called a virtual print fee (VPF) formula. Digital projection equipment costs between $50,000 and $80,000 per screen on average. The majority of those costs will be repaid to the theater owners by the studios.

But it takes up to a decade. And the studios are saying that after September 2012 they won’t be striking any new VPF deals. No deals, no subsidy. […]

Right now North America has about 39,000 movie screens. (Worldwide estimates run between 100,000 and 150,000.) Cinedigm has already handled the digital conversion on 10,000 of those North American screens. In all, 22,000 screens have gone digital. That’s more than half, and that means 35 mm is going to have a very hard time hanging in there for very long, outside the realms of archives, academia and the most purist-driven of the revival and art houses.

That likely would also leave a bunch of small, historic theaters — such as the H & S Theater in Chandler, Okla., and the Odeon Theatre in Tucumcari, N.M. — out in the cold. (Incidentally, the Odeon’s been for sale for about $60,000 for months, with no takers despite being the only theater for at least 100 miles.)

The film industry is yet another sector likely to be severely disrupted by the rise of the Internet. With Netflix streaming, Amazon on-demand, and even Facebook eventually getting into the home-movie sector, it’s going to be difficult to see how many movie theaters will remain financially viable in the coming years.

Perhaps a few of these old film venues can survive by hosting concerts, showing classic films, or becoming beer-and-a-movie places like Alamo Drafthouse. But, in the meantime, you’d better enjoy them while you can.


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