Local theater on the wave of change

by Benjamin Bradley
Contributing Writer

When Thomas Edison invented the world’s first projector he recorded and watched a grainy motion picture of his colleague, Fred Ott, pretending to sneeze. This was 1894.

Andover Cinema projectionist Corey Patrick programs a digital projector so that it will atomize film presentation, from starting movies on its own to dimming lights and automatic focusing. Photo by Benjamin Bradley
Andover Cinema projectionist Corey Patrick programs a digital projector so that it will atomize film presentation, from starting movies on its own to dimming lights and automatic focusing. Photo by Benjamin Bradley

When the Andover Cinema purchased its first digital projector 115 years later, owners Clayton Kerns and Shane Maxwell watched the visually stunning “Ice Age 3D.” This was 2009.

The industry has clearly changed.

“The first projector was certainly a milestone for us,” says Kerns. “It was a huge deal… [but] then the ball kept rolling faster.”

Now it’s 2012. In approximately a year’s time Maxwell, Kerns and every theater owner across the nation must convert to digital cinema – gutting their current infrastructure and replacing it with new, expensive technology. According to Kerns and Maxwell, the demand comes from film studios, such as Warner Brothers and Paramount, which will save billions in production and shipping costs by putting their movies on lightweight computer hard drives instead of heavy, physical film prints.

The National Association of Theater Owners (NATO) recognizes that many independent theaters are “in a pinch” to finance such a complex project. Digital cinema requires computer servers, software management systems and 3D screens for 3D entertainment. And, of course, digital cinema demands digital projectors which, according to Elizabeth Baier of MPR News, cost around $75,000 each.

“It’s going to wipe some theaters out,” says Kerns.

Maxwell and Kerns have been familiar with adversity since they bought the 10-screen theater located in Andover. They made the leap into entrepreneurship in February 2008, in the middle of a recession. Kerns was a manager at the Andover Cinema, then 24 years old, and had recently graduated from St. Cloud University with a degree in political science. Maxwell, who became the Andover Cinema’s general manager in 2007, was 25.

Digital cinema became a top priority from the beginning. In less than two years they converted two of their 10 screens.

Perhaps it wasn’t until 2009 that digital cinema left its true mark on the industry.

When “Avatar 3D” made its debut it hit the silver screen with a boom. Audiences around the world experienced visual extravagance. The Motion Picture Association of America reported staggering box office sales, as studios racked in nearly $500 million in the U.S. and Canada alone. And as for the Andover Cinema, an early start paid off.

“We’re on the wave… not behind it,” says Maxwell.

Soon enough, Maxwell and Kerns received calls from neighboring theaters, asking for advice on how to make the digital switch. Currently in the middle of negotiations to convert their remaining eight screens, the two owners know firsthand what independently owned theaters are up against.

The biggest problem is money. According to Kerns, film studios will collectively save billions a year, but “theater owners aren’t going to be saving that kind of money.”

Kerns said that each film print made and shipped costs at least $900. When a widely released film is made, it is shipped to around 3,000 theaters. That’s over $2.5 million for a single movie.

In an attempt to help theaters transition to digital cinema, film studios have taken their savings and implemented something called a Viritual Print Fee (VPF) model. According to Motion Picture Karagosian Enterprises (MKPE), a consulting firm for cinema technology, this means movie theaters receive payments for converting to digital cinema. Within such a model financing and digital equipment are provided by third-party companies called integrators. In theory, theater owners can simply switch over to digital technology at a marginal cost.

“This option is not readily available to most [theaters],” says Kerns.

In many cases independent theaters will be left to negotiate their own financing and buy their own equipment. This is by no means an easy task. According to Kerns, financing is dependent on how many movies play at a theater each year, or a turn-count. In other words, small theaters with fewer screens will receive less financing.

Because of this, Minnesota’s small-town and historic theaters stand to lose the most and a number of theaters, such as Minnesota’s own JEM Theater, have started asking for donations on their company websites. According to JEM Theater’s website, JEMMovies.com, the theater has raised nearly $12,000 and is hoping to raise a total of $30,000 by April 1.

Even if a theater does obtain its equipment and financing through an integrator there are plenty of risks. According to Kerns, integrator contracts usually last about 10 years, a length that can be worrisome. Should an integrator go bankrupt during this time, it’s the theater owner who’s stuck with the bill. Such a nightmare scenario is “a legitmate fear” for many theater owners, said Kerns.

Another concern comes from how quickly technology advances. According to MPKE, the life-expectancy for digital projectors is around 10-15 years, whereas their 35mm counterparts can last for decades. The difference comes from what’s under the hood.

Film projectors have always provided a fall-back plan for theater owners, because even in a worst case scenario their rudimentary parts can be custom ordered. Digital projectors, on the other hand, are wired with complex circuit boards and semiconductors—technology that eventually becomes obsolete. Manufacturers are more likely to invest in new equipment rather than reengineer out-dated technology. Simply put, in 20 years movie theaters may need to buy new equipment all over again.

Despite all the growing pains, Maxwell and Kerns believe digital cinema will offer viewers the best film presentation to date. As Maxwell puts it, high definition entertainment has become commonplace in American households and as a result, it’s time for theaters to step up their game. With the ability to produce breathtaking visual and audio presentation, digital cinema appears to be the answer.

“It’s going to look great,” says Kerns. “A sharp, crisp picture 100 percent of the time.”

John Fithian, president of the NATO, considers the digital conversion the most significant change in the film industry since the 1930s, when silent film was replaced by “talkie” motion pictures.

While the challenge may be difficult, Maxwell and Kerns say they are poised and ready to entertain their audiences for years to come.

“We’re still going to find a way,” says Maxwell.

Benjamin Bradley is pursuing a master’s degree in technical communications at Metropolitan State University and is a part-time employee of Andover Cinema.