Cinedigm Digital Cinema Corp. (CIDM), a company that provides smaller theaters with digital projection, said it helped arrange funding to save 3,000 screens from extinction when studios phase out film prints of movies.
Los Angeles-based Cinedigm and the National Association of Theatre Owners arranged more flexible loans and reimbursements from studios to help cover costs for 180 exhibitors, Chief Executive Officer Chris McGurk said today in an interview.
The trade association is trying to preserve smaller exhibitors, most with only a few screens, that have struggled to pay for the conversion. Major Hollywood studios plan to begin eliminating costlier film prints in favor of digital copies of movies as soon as next year.
“The smaller cinema operators don’t have as much leverage with the financiers because they’re not big enough,” McGurk said. “They don’t have the volume of movies flowing through their theaters.”
The 180 operators include the owners of the Elkader Cinema, in Elkader, Iowa, a town of about 1,500 people, Cinedigm said. Owners Lee and Diane Akin installed a digital projector after refurbishing the building, constructed in 1941. It’s currently playing “Taken 2” starring Liam Neeson.
The Akins, who live on the theater’s second floor, converted to digital projection with a loan they arranged on their own. About a year later, in 2009, they qualified for studio reimbursement fees through the Cinedigm-NATO program.
“If we hadn’t had it we would really be in the soup,” Diane Akin said in an interview. “I don’t know what we would have done.”
Even so, running a small-town theater is difficult, said the couple, who have masters’ degrees in business administration and left defense-industry jobs to take over the cinema. Competition includes streaming services that allow people to watch movies at home and on small devices.
“The jury’s still out,” Diane Akin said. “I would say that if we survive, the program was a life saver. The industry’s changing. We’re constantly trying to figure out how we can win people over from other things they want to do.”
Under an industrywide agreement with studios, cinemas had until Sept. 30 to arrange financing and sign up for so-called virtual print fees, a payment studios make to theater owners to assist with conversion costs. McGurk said he would like to see the deadline extended.
“We’re hoping there will be some flexibility from the studios, because these small theaters are part of Americana,” McGurk said.
Cinedigm rose (CIDM) 1.2 percent to $1.30 at 3:59 p.m. in New York. The stock has declined 5.5 percent this year.
The company has signed up more than 12,200 screens for conversion and has completed work on 10,875, according to a statement today. Cinedigm delivers independent films and alternative content digitally to theaters, including concerts and sports events. It also also operates video-on-demand and DVD distribution businesses.
About 80 percent of U.S. theaters have converted to digital projection. Nato represents owners of more than 30,000 screens in the U.S.
For those that didn’t make the Sept. 30 deadline, the theater trade group is working on options that include the purchase of used digital gear from chains that are upgrading to the latest models, according to John Fithian, president. The group is also pursuing charitable donations. An anonymous donor contacted the organization today offering to pay for 10 digital systems for single-screen theaters, he said.
“We’re hurrying to get as many options as possible out there before film ends,” he said. “We want to preserve the culture of movie-going in small towns. In today’s environment, there are lots of entertainment options. We need those small town cinemas to survive.”
To contact the reporter on this story: Michael White in Los Angeles at
To contact the editor responsible for this story: Anthony Palazzo at
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