AfterDawn: News

Hollywood looks to help finance shift to digital theaters

Hoping to jump start the move to convert U.S. movie theaters to digital technology, the major Hollywood studios appear close to a deal that would help subsidize the estimated $70,000 - $75,000 cost of converting a single theater from traditional film to a digital screen. The deal would require studios to pay a "virtual print fee" each time one of their movies plays in a theater owned by Regal Entertainment, Cinemark Holdings, or AMC Entertainment.

So far fewer than 5,000 screens around the country have been converted to digital. The largest theater chains, including the three that would be covered by this agreement, have been unwilling, and they say unable, to pay for the conversion themselves.



Once the arrangement is finalized, the three chains intend to begin a process that will result in all their screens being digital in about three years, for which Digital Cinema Implementation Partners (a company jointly owned by the three chains) intends to finance with a $1.1 billion line of credit. Studio fees would be used to help with payments.



Written by: Rich Fiscus @ 11 Mar 2008 0:47

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• 23 comments

• cart0181

  Define "digital theater"
  
  I assume they mean anything that gets rid of the tape. As near as I know, most theaters already use a dvd for the audio portion of the show. I also am aware that some of the "best" theaters use multi-chip DLP projectors, which of course don't use tape as a source. I'm wondering if a specific type of equipment will be subsidized, or if several options will qualify.
  
  Another major concern might be how this would effect brand new theaters. Is there any way for them to take advantage of this, or will it be strictly for existing showplaces? Without checking prices, I'm sure that the latest-and-greatest digital gadgetry for movie houses could put a startup over budget. Without a plan to help subsidize new theaters also, the Barriers to Entry may be getting raised here.

  11.3.2008 01:33 #1

• jookycola

  Honestly, In a day and age where people are cutting back expenses due to having to pay $3 and/or $4 a gallon in gas. I think for theaters to raise their prices any more will be the nail in their coffin. So if i were these 3 theatre chains i'd think long and hard if this digital conversion is really needed. Because if i can get the same or better digital picture on Blu-ray disc on my 1080 42inch plasma at home i'd rather spend the $20 on the dvd later than spend almost $40 (tix price + food, and parking) to take myself and another to a theatre.
  
  At $11.00 a ticket here locally, plus $7.00 to park...that's $31 bucks plus tax to take two people to a movie. IMO that's a bit much to see it in a theatre once. For 10 bucks less you can own the movie and watch it as many times as you want in hi-def at home. Just seems to me they should be trying to find a technology that improves quality and efficiency...that can then help lower the price to remain competitive.

  11.3.2008 10:03 #2

• goodswipe

  Quote:Honestly, In a day and age where people are cutting back expenses due to having to pay $3 and/or $4 a gallon in gas. I think for theaters to raise their prices any more will be the nail in their coffin.I'm with you on this. I rarely go to these bigger movie theater's anymore like Regal Entertainment and AMC Entertainment due to the absurd cost of everything and the seating. If I do go to a movie, I go to this place called Alamo Drafthouse. I believe they are only located in San Antonio and Austin Texas, but anyways, they serve BEER there! And that's the only way I will go to a movie anymore. Also, they only allow people 18 and up there so you don't have to deal with noisy kids.
  
  
  http://www.dlp.com/cinema/what.aspx

  11.3.2008 10:37 #3

• sk8flawzz

  Quote:Quote:Honestly, In a day and age where people are cutting back expenses due to having to pay $3 and/or $4 a gallon in gas. I think for theaters to raise their prices any more will be the nail in their coffin.I'm with you on this. I rarely go to these bigger movie theater's anymore like Regal Entertainment and AMC Entertainment due to the absurd cost of everything and the seating. If I do go to a movie, I go to this place called Alamo Drafthouse. I believe they are only located in San Antonio and Austin Texas, but anyways, they serve BEER there! And that's the only way I will go to a movie anymore. Also, they only allow people 18 and up there so you don't have to deal with noisy kids.
  
  
  " target="_blank">http://www.dlp.com/cinema/what.aspx
  
  Man that sounds like a swell place.
  Here in SoCal there are mostly Edwards and AMC. There's one drive-in nearby where I go to lately. If not that then this one AMC by UC, its mostly adults and college students so no stupid teenagers blasting their cell phones or crying infants! =D

  11.3.2008 11:00 #4

• goodswipe

  Quote:Man that sounds like a swell place.
  Here in SoCal there are mostly Edwards and AMC. There's one drive-in nearby where I go to lately. If not that then this one AMC by UC, its mostly adults and college students so no stupid teenagers blasting their cell phones or crying infants! =DYea, ringing cell phones and whiny ass kids that can't sit in their seats, really piss me off!
  
  Yea, the Drafthouse is an awesome place. They also show older movies such as Pulp Fiction, LOTR's, The Birds(awesome alfred hitchock movie)and other stuff. The food there is top notch as well. Check out their website.
  
  http://www.originalalamo.com/
  

  "look honey, it said goodswipe! oh wow, that's amazing."

  11.3.2008 11:32 #5

• dragonx17

  Digital is awesome especially when its a 3-D film
  The local AMC30 does not have a digital screen at all but i hope they upgrade only if prices remain the same. Tickets are currently 10.50
  
  The Best Movie Theater i have ever been to is In T.J. yes you heard me correct TIJUANA.
  
  Cinépolis VIP in Plaza Rio. It’s a movie theatre that serves crepas, sushi, and a bar. The theatres have leather love-seat style chairs, with a fat sidearm to put your plates on. The price for an evening flick is still cheaper than a matinee in the states. Wednesdays are two for one!
  
  Simply Awesome.

  11.3.2008 12:21 #6

• Hunt720

  I think the current price of EVERYTHING is hurting EVERYONE.
  
  As mentioned before, the price of GAS is KILLING people who do not live nexd door to a theatre (which accounts for 99% of the customer base easily without adding a decimal. The theatres have to have much of there supplies shipped to them as all establishments do. This added gas price adds more cost to this process for distributers and thus increases the cost of all items which range from the popcorn and candy to the cleaning supplies used to mop up soda spills. All of these things trickle down to the consumer and make it very difficult to want to spend so much for something that could be viewed at home via digital distribuiton.
  
  ON THE FLIP SIDE:
  
  I happen to LOVE the experience of seeing a film in a theatre.. the nostalga alone is great and I get pumped up seeing how exited people get at the occasional film after which there is sometimes even applause... which is rediculous due to the fact that it is devoid of a live performance which would neccesitate such a response.. but neat none the less.

  11.3.2008 14:36 #7

• dragonx17

  Even If it expensive i go the movies about 4 or 5 times a month and love it. I don't know if all AMC's do this but my local AMC 30 allows us to take anything of food that we want. I remember taking in a whole pizza with my friends. And even then we still bought popcorn. Wow I should go on a diet. LOL

  11.3.2008 16:41 #8

• jookycola

  Originally posted by Hunt720: I think the current price of EVERYTHING is hurting EVERYONE.
  
  As mentioned before, the price of GAS is KILLING people who do not live nexd door to a theatre (which accounts for 99% of the customer base easily without adding a decimal. The theatres have to have much of there supplies shipped to them as all establishments do. This added gas price adds more cost to this process for distributers and thus increases the cost of all items which range from the popcorn and candy to the cleaning supplies used to mop up soda spills. All of these things trickle down to the consumer and make it very difficult to want to spend so much for something that could be viewed at home via digital distribuiton.
  
  ON THE FLIP SIDE:
  
  I happen to LOVE the experience of seeing a film in a theatre.. the nostalga alone is great and I get pumped up seeing how exited people get at the occasional film after which there is sometimes even applause... which is rediculous due to the fact that it is devoid of a live performance which would neccesitate such a response.. but neat none the less.The thing about your cost tof goods trickling down is true...but only slightly. Do you honestly believe they barely skip buy with little to no profit on $6.00 bags of popcorn and $4.00 medium soft drinks? That's just it, That was my point.
  
  At this point in the game they need to figure out ways to reduce the cost to keep them in busniess or the digital age will roll them as hard as it has the music business.
  
  When one can watch a movie in hi-def at home on digital 5.1 surround on a large screen T.V. Buy the movie on Blu-ray, and buy a box of Orville Redenbach's popcorn (4 bags per box) for $2.50. Why would you want to go to a theatre.
  
  Consider this as well. Large screen T.V. prices drop a lot every year. Factor in the dropping cost of a large LCD in 5 years and how well movie digital distribution/on-line streaming will improve in 5 years. If the movie theatre business model doesn't make bold moves to preserve it's allure, people will skip it for the 2 or 3 event movies a year they want to see. That will hardly keep them afloat.
  
  Theatre chains will have the same catastophic business failure as the record industry is having now.

  11.3.2008 20:21 #9

• drach

  Quote:Man that sounds like a swell place.
  Here in SoCal there are mostly Edwards and AMC. There's one drive-in nearby where I go to lately. If not that then this one AMC by UC, its mostly adults and college students so no stupid teenagers blasting their cell phones or crying infants! =DDrive ins are definitely the best. I live near the Blue Fox, and it is $6 for a ticket. Not only that, they always have a double feature, sometimes even a triple feature. Way better than anywhere else.

  11.3.2008 21:24 #10

• Hunt720

  Quote:At this point in the game they need to figure out ways to reduce the cost to keep them in busniess...It seems that you have already plotted out an appropriate business model for this change you speak of!
  
  Please, shed some light on your suggestions for the industry as a whole.

  12.3.2008 01:56 #11

• dp70

  Digital Cinema at present barely equals 35mm film in resolution. A 35mm color print of a 2 hour movie costs close to $1500.00. Remember the costs of inventory control and freight. The savings in print costs would be vast. Digital distribution for cinema is a secure internet connection.
  
  The quality of a digital cinema image is 4k, the present home video equipment even high-def is vastly inferior to digital cinema, as it is all inferior to a 70mm print.
  
  Digital cinema is all about the bottom line. Less cost for the distributor and less labor cost in the theater. Does this mean better product? more product? shorter time to dvd? more direct broadcasting?
  
  The specs are available for d/l from the digital cinema consortium and are around 700 pages long. The encrypted delivery part is very interesting reading.
  
  DP70

  12.3.2008 08:22 #12

• 7thsinger

  Originally posted by goodswipe: Quote:Honestly, In a day and age where people are cutting back expenses due to having to pay $3 and/or $4 a gallon in gas. I think for theaters to raise their prices any more will be the nail in their coffin.I'm with you on this. I rarely go to these bigger movie theater's anymore like Regal Entertainment and AMC Entertainment due to the absurd cost of everything and the seating. If I do go to a movie, I go to this place called Alamo Drafthouse. I believe they are only located in San Antonio and Austin Texas, but anyways, they serve BEER there! And that's the only way I will go to a movie anymore. Also, they only allow people 18 and up there so you don't have to deal with noisy kids.
  
  
  " target="_blank">http://www.dlp.com/cinema/what.aspx
  
  I'm coming to visit Swipe...we're going to the Alamo Drafthouse! Man, that sounds kickin.
  
  I hate going to the theater. Between the prices, peoples cell phones going off, the kids with those damn light up shoes...ugg. I hate it.
  
  I don't think the cost of this new venture will appeal to the public as much as the powers that be are hoping for.
  

  
  
  

  12.3.2008 08:37 #13

• cart0181

  Yeah, drunks are nice and quiet like. :P

  12.3.2008 11:32 #14

• jookycola

  Originally posted by dp70: Digital Cinema at present barely equals 35mm film in resolution. A 35mm color print of a 2 hour movie costs close to $1500.00. Remember the costs of inventory control and freight. The savings in print costs would be vast. Digital distribution for cinema is a secure internet connection.
  
  The quality of a digital cinema image is 4k, the present home video equipment even high-def is vastly inferior to digital cinema, as it is all inferior to a 70mm print.
  
  Digital cinema is all about the bottom line. Less cost for the distributor and less labor cost in the theater. Does this mean better product? more product? shorter time to dvd? more direct broadcasting?
  
  The specs are available for d/l from the digital cinema consortium and are around 700 pages long. The encrypted delivery part is very interesting reading.
  
  DP70See, i totally see that. But what's the chances a theatre chain will look at this and go we can now lower some prices and get butts in the seats?
  nihl.
  they'll either raise prices a buck or more using "digital" as a way to attract people (i.e. marketing) I know it's better than hi-def at home. But hi-def is pretty darn nice looking and if it comes down to me watching it at home in hi-def with friends and family
  Vs.
  Spending in many theatres in L.A. and Orange County $3 to $4 to park in an already over crowded parking lot...driving around-and around looking for a spot, then in all likelyhood $13 or so bucks a ticket (for digital), $6 for $1 worth of Popcorn, $4.00 for $1 worth of Soda, Then listen to obnoxious teens in the audience, rude peoples cell phones, and idiots that take crying kids to a movie to see it at a "digital" theatre.
  
  no thank you, I'll stay at home. Hi-Def and my 5.1 surround is plenty good enough.
  I've seen one movie in the theatre last year "Transformers" the year before that..."Batman Begins". So on top of all the over bolated prices hollywood needs to step up and start making good movies people actually want to pay all that cash to see.
  How many of you paid to go see The Rock in "The Game Plan" at your local theatre? How pissed we're you that you spent your money on that pile of crap? Would you pay more for it because it's on a digital screen?
  Hell no.
  Would it not have been even a little better if you rented it (for A LOT less) and watched at home? I'd say yes i'd rather feel like i was ripped-off for $4.00 to rent it than nearly $20+ to see it at a theatre.
  
  I would actually love to see a "good" movie at a digital theatre, but they need to start making "good" movies first. Then follow that up with lowering the rediculously over priced theatre going experience.

  12.3.2008 11:55 #15

• 713tex

  We got a dratfthouse here in Houston and I highly recommend it. :)

  12.3.2008 22:43 #16

• Hunt720

  Quote:I would actually love to see a "good" movie at a digital theatre, but they need to start making "good" movies first.It sounds like the actual problem is you tend to go see movies you don't like. A little reasearch online would help save you that 20+ dollars in the future. That way you don't have to be "ripped off" and then spend your time spinning your tires by complaining online on a site where nobody is able to help you directly with your cause.
  
  ... and on a side note, Transformers could have been directed better. So I agree with you in that sense. However, until this method of digital distribution occurs we will not be able to see these movies in such quality without gambling our 20+ dollars first (and I think that is where the point of the article is).
  
  Maybe if you submitted your plan to fix this situation to the Cinemas themselves you would make a difference. Until then, people on this site can either agree with you or disagree.. either way you end up in the same place you started.

  13.3.2008 02:05 #17

• avoidz

  The cinemas will probably end up going the way of video arcades, when the home experience is equal or better -- which, IMO, is already here.

  15.3.2008 01:37 #18

• zorb43

  Originally posted by Hunt720: I think the current price of EVERYTHING is hurting EVERYONE.
  
  As mentioned before, the price of GAS is KILLING people who do not live nexd door to a theatre (which accounts for 99% of the customer base easily without adding a decimal. The theatres have to have much of there supplies shipped to them as all establishments do. This added gas price adds more cost to this process for distributers and thus increases the cost of all items which range from the popcorn and candy to the cleaning supplies used to mop up soda spills. All of these things trickle down to the consumer and make it very difficult to want to spend so much for something that could be viewed at home via digital distribuiton.
  
  ON THE FLIP SIDE:
  
  I happen to LOVE the experience of seeing a film in a theatre.. the nostalga alone is great and I get pumped up seeing how exited people get at the occasional film after which there is sometimes even applause... which is rediculous due to the fact that it is devoid of a live performance which would neccesitate such a response.. but neat none the less.First of all ... What the hell is SODA? Secondly if you want to see gas prices fall drive out the Moslems from your country ... they are like leeches and so many slugs ....

  16.3.2008 07:50 #19

• zorb43

  Originally posted by dragonx17: Even If it expensive i go the movies about 4 or 5 times a month and love it. I don't know if all AMC's do this but my local AMC 30 allows us to take anything of food that we want. I remember taking in a whole pizza with my friends. And even then we still bought popcorn. Wow I should go on a diet. LOLYeah you probably should ... Keep eating all that sodium and see what happens when you get a little older ... Can you say kidney stones ... severe pain and other documented health problems. At least you do admit to your eating disorder, which is more than I can say for most Americans ... The 300 pound "give me" generation. The,how much salt can I cram into my body on a daily basis crowd,who never seem to give a thought as to how much they are poisoning their bodies with that garbage.

  16.3.2008 07:59 #20

• Hunt720

  Quote:First of all ... What the hell is SODA? Secondly if you want to see gas prices fall drive out the Moslems from your country ... they are like leeches and so many slugs ....
  "First of all" you need to learn how to spell MUSLIM before you try to use it as a reason for high gas prices. You might also want to google "false flag attack" while your at it before you and all the carlisle group lovers decide who's fault the prices are.
  
  ... and SODA is the geographic vernacular in my area of the world for the type of drink that Pepsi and Coke fall under. You may call it "pop" or "tonic" even (should you reside in that particular part of MA).
  
  When you are done with your research let me know.. until then, look out for the "leeches" you fucking biggot.

  18.3.2008 00:08 #21

• cart0181

  I'm not quite sure how a discussion about digital theater ended up as a discussion about world religions, oil in the middle east and obesity, but I just have to add my two cents.
  On obesity: It's not a problem of what we eat or how much. It's a problem with how we don't exercise, instead we sit on our asses watching things like, well hey, digital theater. The cause? Being broke and deciding we need to pay $15 to escape our miserable careers. Instead we could be investing that time in something more productive which will actually rid ourselves of said career.
  On high fuel prices, etc: The "moslem" :P religion itself has absolutely nothing to do with our gas prices, though the people who control how much crude is pumped in the middle east are purportedly of the Islamic faith. Supply/demand, distribution costs, and taxes determine the price. Ironically, I find that the people that want to prevent drilling for oil in the USA, reduce carbon emissions, appease terrorists and embrace Islamics (not necessarily the same group of people although I find them strangely linked) are the very one's who are most likely to destroy those things they hold most dear. How so? When our country is being run by the terrorists we were trying to appease, how many oil fields do you think will be drilled and how many wonderfully diverse religions will be allowed?.... Just think about it a little... Please don't get me wrong here! I love the environment and the freedom of religion dearly, but what is the best way to protect them?
  
  BTW, it's "pop" where I come from too!

  18.3.2008 20:59 #22

• zorb43

  Originally posted by cart0181: I'm not quite sure how a discussion about digital theater ended up as a discussion about world religions, oil in the middle east and obesity, but I just have to add my two cents.
  On obesity: It's not a problem of what we eat or how much. It's a problem with how we don't exercise, instead we sit on our asses watching things like, well hey, digital theater. The cause? Being broke and deciding we need to pay $15 to escape our miserable careers. Instead we could be investing that time in something more productive which will actually rid ourselves of said career.
  On high fuel prices, etc: The "moslem" :P religion itself has absolutely nothing to do with our gas prices, though the people who control how much crude is pumped in the middle east are purportedly of the Islamic faith. Supply/demand, distribution costs, and taxes determine the price. Ironically, I find that the people that want to prevent drilling for oil in the USA, reduce carbon emissions, appease terrorists and embrace Islamics (not necessarily the same group of people although I find them strangely linked) are the very one's who are most likely to destroy those things they hold most dear. How so? When our country is being run by the terrorists we were trying to appease, how many oil fields do you think will be drilled and how many wonderfully diverse religions will be allowed?.... Just think about it a little... Please don't get me wrong here! I love the environment and the freedom of religion dearly, but what is the best way to protect them? Good Job ! Something tells me Hunt720 might be a "Moslem" himself ! Hahahaha ..... We will have to start calling him "Soda Boy" Hahaha .... and buy him a camel to ride to work when he can no longer afford the gas to put in his car ! Hahahaha .....
  
  BTW, it's "pop" where I come from too!

  19.3.2008 22:49 #23