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TOPIC: I'm going digital

I'm going digital 24 Oct 2009 13:07 #32662

  • leeler
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We decided that now is the time. I've got financing arranged and quotes in hand. Target date is December 11. We're adding 3D as well. Here is a list of what we're buying:
NEC NC-1600 Digital Projector
NEC NC-60LS19Z 1.90 - 3.25 LENS
STRONG D200027 DIGITAL BASE
GDC DIGITAL CINEMA SERVER 2D & 3D PLAYBACK
INSIGHT VIDEO SCALER - SWITCHER
MDI 3D SILVER SCREEN,11'6"' X 27'0"
KELMAR ARCHITECTURAL DIMMER
ULTRA STEREO 8 CH "DIGITAL" ANALOG PROCESSOR

We'll be going with RealD for 3D largely because we won't have to pony up any extra money for the system or glasses. Still not sure on the 5yr vs 10 yr deal that rufusjack brought up. I guess the CBG deal means you don't have any upfront costs.
"What a crazy business"
Last Edit: 24 Oct 2009 13:15 by leeler.
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Re:I'm going digital 24 Oct 2009 17:43 #32664

  • jacker5
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Very good I wish you all the luck with it. Will you still have your 35mm projectors or going 100% digital!
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Re:I'm going digital 24 Oct 2009 18:20 #32665

  • leeler
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no room for both so all or nothing for me. I'm excited and scared at the same time! :S
"What a crazy business"
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Re:I'm going digital 24 Oct 2009 23:49 #32666

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You will be fine! Before you know it everything will be digital. Alot of the chains are going to start early 2010!
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Re:I'm going digital 25 Oct 2009 07:13 #32668

  • slapintheface
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wow..good luck....
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Re:I'm going digital 25 Oct 2009 07:15 #32669

  • slapintheface
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might I ask about how much it will cost in total to convert...
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Re:I'm going digital 25 Oct 2009 12:16 #32670

  • leeler
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I expect it to be around $75K when it is all said and done. FWIW I have minimal renovations to do to get ready for digital. The projection room is also the power distribution for the building and we have 3 phase wiring already for the 35MM projector so electrically we should be fine. We will probably have to get a larger blower to exhaust the heat but that shouldn't be too bad
"What a crazy business"
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Re:I'm going digital 25 Oct 2009 15:12 #32671

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As many of us have disucssed their is not much cost savings to small operators who are the booker/manager/head projectionist regarding film building/tearing down. If I do not have to build up a movie, there is no cash flow saving to me.

So lets focus on how digital can increase revenues:

1) 3d, yes that can right now, espcially if neighboring theaters do not have 3d. But for small towns, can you pull people from bigger areas that do not have 3d? (Leeler?)
2) better availability of movies on the break-Leeler of the 6 majors, how many have told you that will get movies on the break with digital that you are not getting now? Will you have to change your scheduling and hold movies longer? (I know you prefer to change every week)

Paying for equipment: How many studios will give you VPFs? How much?

CBG: Can we assume their theater classes (first-run,seasonal first run, move-over, & discount) no longer are being used? If you recall some time ago about 2 years ago CBG established those four classes with move-over and discount getting basically used hand me down equipment down the road.

How did you get your financing? Local bank? Industry leaseing?

So I guess what I am asking if how do you think the digital equipment will pay for itself?

Thanks for being a digital guinea pig!
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Re:I'm going digital 25 Oct 2009 16:02 #32672

  • leeler
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glad to be the guinea pig (well, not glad, but willing ;) ).

I talked to the distributors and while they did not say anything about getting movies on the break moreso then I currently do, they DID say that getting moveover prints on weeks two and three would be much easier. I currently play film as soon as I can get it which is usually four weeks old on up. Once in a while I get something after two weeks but not very often. This will enable me to hopefully grow my business and THEN I might qualify to be able to open more things up on the break. I currently can only open up tentpole movies.

3D is a huge leg up for me (for now anyway) over and above something being offered by "the other guys". I suspect I may be able to draw some from the neighboring towns and I hope to build up a bigger fan base from this. I saw "Christmas Carol" in 3D and it was very good. My plan is to debut digital and 3D in mid December with Christmas Carol

Flexibility is a big advantage as well. We're talking about playing more movies then one a week. Maybe one for the weekend and one for the weekdays or splits in other ways, too. With film it was always such a hassle to do a split and I spent loads of extra time and effort in the booth and this will become much easier with digital (I think, anyway). I will still play one a week for the most part but I want to be able to play fast and loose a little bit and keep my smaller crowds coming back more often. I'm currently playing Zombieland for a week and it is doing terribly, but probably good enough to play for a couple of days and with digital I hope to be able to make those kinds of deals more often.

Much has been said of alternative content but I think that will be a minor advantage for me. High school football is huge here especially as they're doing very well this year (GO WARRIORS!) but college ball has hit us hard too. I think playing those college games on the big screen especially as we sell beer and hot dogs (shortly) that we could have some very good days in the fall which we desperately need. I don't see much audience for the other alternative content out there but, maybe for a show or two it might be something to consider.

The CBG is close to getting their Master License Agreement (MLA) signed with Cinedigm. In it, we will hopefully have a clause for weekly VPFs which is a smaller VPF for playing "film" after the break. This should pay for my loan payments in and of itself. For when I DO open on the break (six times this year) I should get a full VPF which should be much more substantial.

I've had a very hard time this fall getting product in a timely fashion so, I hope this helps that situation a lot. I FINALLY got Meatballs for next week a full six weeks after the break. I should do OK with it but the buzz that existed for it has largely evaporated. If I were able to have played it three or four weeks ago (and in 3D, no less) I think I would have done much better with it.

One of the selfish advantages for me is those ding dang trailers won't be a problem anymore. Jeez I spend an inordinate amount of time hunting down those things! I'm also getting a video scaler which will enable me to hook up with a Blue Ray player, video game console or computer to play alternatives to movies and they should look just as good as my movies will look. No more scratched prints! No more film quality in the hands of some doofus who had my print before me!

My last thought with digital is that what alternative is there? You can wait and watch the 35MM print count shrink and hold on the best you can with the product available to you, or you can bow to the inevitable and go forward with it. I chose to go for it while I can make the most of the competitive advantage for as long as I can and hope to move my theater up the totem pole a few rungs in the process. The big three circuits have their financing and their rollout is underway so at some point soon there will be a tipping point with the studios and they will be cutting back their 35MM product. I want to be before that wave, not after.
"What a crazy business"
Last Edit: 25 Oct 2009 16:14 by leeler.
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Re:I'm going digital 25 Oct 2009 16:21 #32673

  • cuemarks
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Minus the server you have close to a carbon copy of our digital systems. I think you will be pleased with Real D. The only problem we have had with digital projection was caused by a reject server that we ended up with. After replacing that unit we have had zero problems with our systems. Cuemarks
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Re:I'm going digital 25 Oct 2009 16:47 #32674

  • leeler
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good to know, cuemarks. You are the true guinea pig here ;)
"What a crazy business"
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Re:I'm going digital 25 Oct 2009 19:39 #32676

  • rufusjack
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Leeler,

Are you going to wait until that MLA with CBG is signed before you sign on the dotted line as well?

I guess I do not see why the studos would give any VPF to move-over houses as this group costs them very little if any and the studios are not known to be generous (and I guess none of us would be in their shoes either).

So how will it make getting a movie easier on week 2? Historically getting a movie on week 2 would mean the movie did very well and the studio made more prints. Would the hard drive be circulated from another theater after week one?

I would want to know better if I could get films on the break more often than now. And I would want it writing. You might have to forego VPFs in that case. But that might be a good trade-off.

I agree that alternate content should not be a part of your decision.
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Re:I'm going digital 25 Oct 2009 20:07 #32678

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Rufusjack,

No, I am not going to wait until the MLA is signed (unless it gets signed at showeast like was rumored). I'm taking it on faith from my discussions with Bill Campbell (the head of the CBG) that weekly VPFs will come. He gave me an estimate based on the Paramount self financing deal that was made public in January. He felt that the deal with all of the studios would be less but not by a substantial amount and that Cinedigm would get an administrative fee. That's what I'm considering in my decision. The studios were reluctant to consider weekly VPFs for us moveover guys but have warmed up to the idea lately. This, again, is from Bill from the CBG.

Getting prints on weeks two or three will be easier because the first run houses will be able to free up their hard drives after they have run the movie successfully in their house. So, yes, they will be able to circulate the hard drive to my little place after that.

Getting films on the break will not be easier for me due to this unless my numbers improve. If I start to gross better due to getting movies on weeks 2 and 3 then I may be in a position to get more movies on the break, but just because I'll be digital will not in and of itself help me in that regard.
"What a crazy business"
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Re:I'm going digital 26 Oct 2009 01:22 #32679

  • BurneyFalls
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Wow, congratulations, leeler. Lead the way, break the ice, and let me/us know what's on the other side.

Business has been dismal here lately. I don't know if digital would change anything for me other than my expenses, but I will keep an open mind. Anxious for you, and excited for you. Let us know everything--every step of the way.
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Re:I'm going digital 26 Oct 2009 19:25 #32681

  • SMMORRIS
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I hope it goes well! I usually feel like I don't even know enough to ask the right questions. I am anxious to hear how things proceed.
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