hill country observerThe independent newspaper of eastern New York, southwestern Vermont and the Berkshires




Go digital or die

Small theaters struggle to convert before film reels disappear



Contributing writer


“Wait a minute! Wait a minute! You ain’t heard nothin’ yet.”

The movie industry is arguably experiencing its biggest technological revolution since Al Jolson spoke those first words, in “The Jazz Singer,” to usher in the era of the talkies in 1927.

By the end this year, the major studios will stop producing the 35-millimeter film reels that have been the standard operating equipment for movie theaters since the early 20th century. 

“Industry-wide, it’s the biggest change in about 100 years,” said Sandra Thomas, the executive director of Images Cinema in Williamstown.

The change to an all-digital format will save the studios money. But the equipment needed to screen the new digital movies – starting with projectors that cost at least $70,000 apiece -- has some smaller area theaters scrambling to raise money to keep pace with the computer-driven technology.    

“If you don’t, you’ll be out of business,” said Keith Pickard, co-owner of The Spectrum 8 Theatres in Albany. Cinemas that don’t convert by the end of the year, he and others explained, will be unable to continue showing new movies.

As a result, some smaller independent movie theaters are wondering whether this year could be their last.

“The studios know they will save billions, and I’m serious about billions,” said Duane Greenawalt, the owner of Hathaway’s Drive-In Theatre in North Hoosick.

The studios also risk losing some revenue if the change forces some smaller theaters out of business. But Greenawalt said that even in the worst-case scenario, these losses would amount to millions of dollars – far less than the studios’ cost savings from the digital switch.

“That’s a trade they’re happy to live with,” he said.

The result is that theater owners like Greenawalt are trying to figure out how to raise tens of thousands of dollars to stay open. For smaller, independent operations that may be only marginally profitable to begin with, it’s a daunting task. Some, like the seasonal Carol Theater in the northern Warren County hamlet of Chestertown, have already announced they won’t be continuing into the digital age, and hundreds of others nationally are expected to close.

Making the change

Many theaters around the region have managed to raise and spend the money needed to go digital – and are hoping they’ll be able to recoup it in the years ahead.

Pickard said the Spectrum 8 complex, for example, was able to raise more than $500,000 on its own to upgrade its eight theaters with digital projectors. 

John Valente, general manager of the Beacon Cinema in Pittsfield and Triplex Cinema in Great Barrington, likewise said his company pursued traditional bank financing to convert the Triplex, which opened in 1995.

“At the Beacon, we opened fully digital in 2009,” he said. “We were pretty sure that was the direction things were going.”

Images Cinema in Williamstown converted to digital projection in November, nearly a century after the movie house first opened its doors as the Walden Theatre in 1916. 

“It’s a different way of doing business,” Thomas said.

To support the change, the board at the nonprofit cinema, which took over operation of the theater in 1998, sought donations from the community and secured a grant from the Massachusetts Cultural Facilities Fund.

Thomas said the change to digital technology has gone well so far.

“There is a learning process,” she said. “The nice thing is that it’s automatic. But there are glitches.”

In the past, for example, damaged film could be repaired with the staff’s in-house splicing skills. Problems in the digital age, however, likely mean a specialized technician must be called in.   

Online campaign

To raise the money needed for the new technology, Village Picture Shows in Manchester, Vt., tried a 21st century solution. Owners Jeff and Shelly Gibson launched a 60-day online Kickstarter campaign in January with the goal of raising $175,000 to renovate the theater. Backers who pledged $5,000 or more were offered free advertising for a year on the big screen; those who pledged $1,000 or more received a pair of movie passes redeemable for an entire year, and smaller donations netted smaller incentives. 

The Kickstarter effort was successful: More than 1,000 people pledged donations, and the theater raised more than $195,000. In April, Village Picture Shows closed for renovations, and it expects to reopen this month with new digital projectors.

But the burden of making the digital switch seems likely to hasten the trend toward consolidation that’s been going on for years in the movie theater business. That means fewer theater locations, with more screens at each surviving location.

According to the National Association of Theater Owners, the number of indoor cinema screens nearly doubled from 1987 to 2011, from 20,600 to nearly 39,000 screens. But the number of cinema locations steadily declined throughout that period.

 The trend toward multi-screen theater chains and is evident in places like Saratoga County, where Bow-Tie Cinemas recently announced plans to open an all-digital 11-screen theater in July in Saratoga Springs and another eight-screen theater by the end of the year in the neighboring town of Wilton. Bow-Tie Cinemas already owns theaters at 21 locations with 177 screens, according to its Web site.

A downtown classic

The change to digital is a bigger challenge for an operation like Crandell Theatre in Chatham, the oldest cinema in Columbia County. The single-screen, 534-seat movie house on the village’s main street was built in 1926 as a vaudeville theater, and upgrading it to the digital age will require a new screen, sound system, projection booth and other related changes with an estimated price tag of $200,000 to $250,000.

“For us, it’s been an adventure,” said Lael Locke, a board member of the Chatham Film Club, which took over operation of the Crandell in 2010, shortly after the death of its previous owner, Tony Quirino, whose family had run the downtown landmark for decades.

As with other independent theaters, the Crandell’s new owners have faced the choice of raising money for a digital conversion or ceasing to exist.

“It’s a massive project, and we have miles to go, but the good news is we’re doing this conversion,” Locke said.

The film club has raised about $55,000 so far and continues to accept donations to meet a $100,000 matching grant received from the Ellsworth Kelly Foundation. (Kelly, a nationally known artist who lives in nearby Spencertown, is celebrating his 90th birthday this month.)   

Disappearing drive-ins

The cost of digital conversion is perhaps most daunting for drive-in theaters, seasonal operations that had already been vanishing from the landscape.

According to the United Drive-In Theater Owners Association, about 357 drive-in theaters remain nationwide, down from more than 4,000 in 1958. Of the survivors, there are 29 in New York, four in Vermont and three in Massachusetts.

Despite an increased competition for the entertainment dollar, however, many area drive-ins are holding their own, even with the costs involved with a forced digital conversion.   

Queensbury’s Glen Drive-In Theater will open for the season this month with newly installed digital projectors. And The Hollywood Drive-In Theater in Averill Park, which opened 60 years ago with two carbon-arc projectors, converted to a digital projection system with Dolby digital sound last year.

The Malta Drive-In Theatre in Saratoga County premiered a new digital system at its two-screen cinema in late April.

“There are certain advantages to digital, but it is expensive,” co-owner Ed Caro said.

Caro explained that new projectors are only part of the expense. The new digital projectors require ancillary costs such as climate-controlled projection booths that weren’t needed before.

“It’s basically a computer, and it doesn’t do well in extreme temperatures,” Caro said. 

One funding opportunity used by the drive-in owners in Malta is the so-called “virtual print fee.” The program is a long-term financing agreement with the movie studios that typically involves a third party. Essentially, the program allows the cost of the digital machines to be repaid on a per-showing basis over a period of years. Caro said he expects to recoup at least some of the money from his digital investment in the next decade.   

But Greenawalt, the owner of Hathaway’s Drive-In, said the virtual-print-fee model doesn’t work quite so well for single-screen theaters, particularly given the seasonal nature of drive-ins.

He praised the successful Kickstarter campaign mounted by Village Picture Shows in Manchester, but he suggested that model also has its limits.

“We took a different approach,” Greenawalt said.

Speaker sale

Aiming to capitalize and the retro appeal of drive-in theater hardware, Greenawalt has set out to raise the $70,000 needed for digital conversion by selling off hundreds of old speakers and junction boxes from Hathaway’s. The drive-in no longer needs the old speakers, as people can listen to the film’s soundtrack through their car stereos. Greenawalt is offering a pair of speakers with a junction box for a package price of $125. 

“Most of the people who buy them have classic cars,” he said. “You can hook them up to your stereo at home and put them in your man cave. We’ve sold quite a few of them, but we’re still a ways from $70,000.”  

Greenawalt estimated he’ll need to sell about 560 speaker pairs to offset digital conversion costs. He said he is less than halfway to meeting that goal but hopes to sell more this summer. In addition to the field speakers, Hathaway’s is selling handmade filmstrip earrings and commemorative T-shirts to help raise funds.

For many smaller movie theaters, profitability is determined by concession-stand sales. Greenawalt, who works as an accountant by day, said the film company typically gets 60 cents of every dollar in ticket sales, and taxes consume another large slice of the pie.

“I keep 32 cents of every ticket dollar, and that pretty much covers my overhead,” he explained.

Still, despite the headache of figuring out how to afford it, Greenawalt said he can see the benefits of phasing out 35 mm film and switching to digital.

“The film companies have been shooting digital for years, and then they would produce it on celluloid,” he said. “But it’s expensive, it’s heavy, and it deteriorates over time. There are all kinds of reasons it’s inferior to digital.”