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TOPIC: another reason for digital

Re: another reason for digital 24 Sep 2011 22:57 #37049

  • revrobor
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rufusjack wrote:
alright Bob:

all digital locations

Marysville, Ks - population 3271, 3 screens
Elkader, IA - 1338, 1 screens
Mexcio, MO - 10,852, 3
Fulton, MO - 12,128, 8
Great Bend, KS - 15,652, 3
El Dorado, KS - 12,643, 6
Concordia,KS - 5709, 4
Chanute, KS - 8738, 4
Bolivar, MO - 11169, 5
McPherson, KS - 13,223, 4

All I have time for now, but I will keep looking.

Sheese Jack. What's your point? I'd be willing to bet that there are more small and rural markets that are not digital than those that are. Are you pushing for panic conversions or what? You and I have a difference of opinion. Let's just leave it at that. OK?
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Last Edit: 24 Sep 2011 22:58 by revrobor.
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Re: another reason for digital 25 Sep 2011 00:44 #37050

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JPRM wrote:
What do y'all anticipate will happen with the cost of converting to digital once the chains are completely converted?

Will it just stay where it is and force little guys out of business? Or will the folks who manufacture and sell digital gear also have a bit of adapting to do? Let's say we're just talking about theaters in North America.

I know what I think, but...what do YOU think?

Waiting for a price decline makes sense in the following situations: 1) You own your theater and can't qualify for 1st-run VPF (I am not a fan of the move-over vpfs), 2) You have a long-term lease you are stuck with and you can't qualify for 1st-run vpf.

I would not make it the basis for my business plan for a new theater or purchasing a theater in you case. You can certainly use laws of supply and demand with a 3rd party payer to see prices are high. What happens 12 mos. from now??? Even a 25% drop in prices might be the best you might be hoping for.
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Re: another reason for digital 25 Sep 2011 02:14 #37051

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revrobor wrote:
Film may or may not be gone by 2015. But IMO the small and rural market exhibitors do not need to make the a panic switch immediately. They have at least a couple of years to plan and save for it.

Bob,
12 mos. from now we are very likely to be at 90% of a movie's gross will be from digital locations. On movies released in September and October of next year it very well could be 95%+. Please show me the motivation for studios to make a film print for these theaters?

50/50 by 2015? How about 90/10?

A couple of years to plan and save for it? This should be a last resort plan. And should not be used by anyone who is looking at getting into the business now. Roxy can use this plan as he can be the last one to convert. Fantastic numbers there sir.

So yes, I believe you are still expressing a wrong opinion. People should not be risking their families future on "Film may or may not be gone by 2015.......They have at least a couple of years to plan and save for it".
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Re: another reason for digital 25 Sep 2011 02:31 #37052

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Alright Jack. We have each expressed our opinions. Time will tell which is correct. Give it a rest.
Bob Allen
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Re: another reason for digital 25 Sep 2011 03:56 #37053

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By the end of 2012 most theaters will be converted it may be 80-85 -90 % --- The theaters that have not converted will be closing or will need to switch there theaters to a different format. Smaller theaters have always had a hard time getting prints can you imagine when only 10 % will be film. Not the odds I would like to have.
Last Edit: 25 Sep 2011 03:57 by slapintheface.
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Re: another reason for digital 25 Sep 2011 08:18 #37055

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I guess part of what surprises me in this discussion is that there are some big numbers mentioned that leave me wanting to know a little bit more.

If, say, 95% of screens are converted by the end of 2012, does that mean that studios won't care about the money they've gotten used to making from that last 5 percent? I'm not asking if they care about the theaters or owners - just whether the studios will be bothered by losing the income.

Of course, I understand that 5% of screens may not translate directly to a 5% drop in revenue. But these are very large, publicly traded businesses, and a drop in sales of 2, 3, or 4 percent could be a pretty serious matter.

Is it good business for studios to let 5% of theaters die?
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Re: another reason for digital 25 Sep 2011 14:30 #37056

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JPRM wrote:
I guess part of what surprises me in this discussion is that there are some big numbers mentioned that leave me wanting to know a little bit more.

If, say, 95% of screens are converted by the end of 2012, does that mean that studios won't care about the money they've gotten used to making from that last 5 percent? I'm not asking if they care about the theaters or owners - just whether the studios will be bothered by losing the income.

Of course, I understand that 5% of screens may not translate directly to a 5% drop in revenue. But these are very large, publicly traded businesses, and a drop in sales of 2, 3, or 4 percent could be a pretty serious matter.

Is it good business for studios to let 5% of theaters die?

JPRM,

The 95% number will be the percent of total gross that comes from digital locations. There will still be 35% or more locations not digital. So the question for any business is how hard to you go after that 5%? Especially when the 5% does not make you much money. How much do you think it costs to get a film print made? $1000? More?

These smaller theaters will be able to get Iron Man 3 in May of 2013. The same for any huge 3800+ location movie. The same probably for the holiday movies. But that only gets you movies 4-5 mos. What will you play the rest of the time?

What is the number that a theater needs to gross to be able to make it worth the time for the studio to make a print? If Theater A plays it and grosses $2500, that would net the studio $1375. Is that enough to pay for the print? Maybe Theater B plays the print next and grosses another $700 for a film rental of $266. That might be the life of the print!

These smaller theaters (at least from my research on Rentrak in the KS district) gross about $2-3000 on the break on many titles. Contagion was a 3200+ location title on the break and a decent grosser for this time of the year. 18% of the theaters playing Contagion in my district grossed less than $2500 after pretty much 3 weekends.

45% of the theaters playing Abduction have grossed less than $1000 so far.

45% of the theaters playing Straw Dogs have grossed less than $2000 after 9 days. 17% have grossed less than $1000.

11% of the theaters playing Mr. Popper's Penquins grossed less than $2000 the first 2 weeks of release.

TWC studio is pretty aggressive with locations. 40% of the locations playing Apollo 18 grossed less than $2000. 50% of locations on I Don't Know How.. grossed less than $1500.

The best you should hope for, would be for the studios to allow you pay a $1500 guarantee to get a movie on the break. How many of you are willing to do that week in week out? For those of you who are move-over, where will your film print come from? I know some people say they could plan 4 weeks after the break what they were going to be playing. How when print numbers will be small??

Plus, keep in mind at least half of the gross lost by studios not willing to lose money on a location will go to other location.
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Re: another reason for digital 25 Sep 2011 18:14 #37059

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Actually, 5% of the gross tells us more than 5% of screens.

Well, if these 35% of total screens can still get Iron Man 3 and a handful of other films, I don't see that it does them (or the studios) any good if they're shut down anyway.

Now, in looking at this as a biz, I'm not carrying any torch for 35mm. But there are PARTS of the common thinking regarding digital conversion that don't make any sense to me.

First, the notion that losing 5% in total sales is meaningless to a multi billion-dollar company. I'm not saying that studios don't have a plan to make up for that...but that's a big chunk of money. Corporations live and die by beating last year's numbers.

Second, the idea that financing and pricing for digital conversion will remain exactly as they are. Pricing on any product (digital projectors, iPhones, Twinkies, crack, you name it) is based on what the market will bear. I don't KNOW that prices will drop, but I do know that current pricing is based largely on selling to large chains that have a good deal of capital to invest.

And third, the idea I touched on earlier. Again, if the thinking is, "Sure, they can get prints of Iron Man," I just don't get that. Aren't these the theaters that are supposed to be shut down because they didn't convert to digital?

I really, really do mean all this respectfully. I really do. And I like hearing everyone's thoughts on this. There are just certain parts of this that don't quite make sense to me.
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Re: another reason for digital 25 Sep 2011 22:16 #37062

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JPRM wrote:
First, the notion that losing 5% in total sales is meaningless to a multi billion-dollar company. I'm not saying that studios don't have a plan to make up for that...but that's a big chunk of money. Corporations live and die by beating last year's numbers.

Second, the idea that financing and pricing for digital conversion will remain exactly as they are. Pricing on any product (digital projectors, iPhones, Twinkies, crack, you name it) is based on what the market will bear. I don't KNOW that prices will drop, but I do know that current pricing is based largely on selling to large chains that have a good deal of capital to invest.

And third, the idea I touched on earlier. Again, if the thinking is, "Sure, they can get prints of Iron Man," I just don't get that. Aren't these the theaters that are supposed to be shut down because they didn't convert to digital?

JPRM,

I guess I did not make my point very clear. That 5% may not make a studio ANY money! So in fact they will be losing no profit whatsoever if they choose to not make a movie available on film. Plus, in my case; 100% of my business can drive 12 mins further to see the movie if I do not play it. So you could make the case that a studio will make more money by playing fewer locations. Remember a $2000 gross will probably not pay for a print at a 55% rental.

There are times of the year when studios will give a print to any theater who can turn their lights on. The summer and holiday blockbusters are those. And there is a greater chance for the smaller theaters to gross even $4-5000. Even on Harry Potter 11 theaters (out of 73) in our area grossed less than $5000 over 3 weeks. On Transformers, there were 10 of 70 grossing less than $5000.
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Re: another reason for digital 25 Sep 2011 23:38 #37063

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Well...why are studios bothering to supply the "five-percenters" with prints now?

I'm not trying to be contrary at all, rufusjack, but one thing that stands out in the titles you list (Straw Dogs, Mr. Popper's Penguins, Abduction) is that they've all been flops.

If you're a studio - and you know that every film can't be a hit - aren't flops just part of the cost of doing business? Don't you keep the doors open with something until it's time to put out the moneymakers?
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Re: another reason for digital 26 Sep 2011 00:35 #37065

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Did Mike really criticize NATO? Spot on though!
Isnt premium VOD at the eight week mark the studios way of getting that 5 per cent that are leaving on the table?
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Re: another reason for digital 26 Sep 2011 02:54 #37066

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JPRM wrote:
Well...why are studios bothering to supply the "five-percenters" with prints now?

I'm not trying to be contrary at all, rufusjack, but one thing that stands out in the titles you list (Straw Dogs, Mr. Popper's Penguins, Abduction) is that they've all been flops.

If you're a studio - and you know that every film can't be a hit - aren't flops just part of the cost of doing business? Don't you keep the doors open with something until it's time to put out the moneymakers?

Why now? Good question. I am shocked sometimes at what theaters get movies sometimes. Right now you still have a decent number of film prints being made. 12 mos from now it going to being just a fraction.

As far as the titles list; most of those are playing at theaters that WILL be digital in 12 mos and I was trying to show how bad those numbers can be and how it will not be in a studio's best interest to release these types of movies at all on film. It is already bad getting a movie this time of year when there are film prints available. Yes flops are going to happen but a studio rarely goes into with that attitude.
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Re: another reason for digital 26 Sep 2011 03:05 #37067

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Why do studios play those 5% of theaters now-- A very good question.. They play them now because they can recycle the pints after they play on the break in better grossing theaters. Now the better grossing theaters will be digital hence no prints to play small houses.
Last Edit: 26 Sep 2011 03:06 by slapintheface.
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Re: another reason for digital 26 Sep 2011 17:53 #37074

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Narrow Gauge wrote:
Did Mike really criticize NATO? Spot on though!
Isnt premium VOD at the eight week mark the studios way of getting that 5 per cent that are leaving on the table?


John got all excited. I can fairly criticize an aspect of an organization I respect and appreciate without dissing the org itself. I'm just saying. :)
Michael Hurley
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Re: another reason for digital 26 Sep 2011 21:03 #37080

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Is that a flip flop.....National Association of Large Theater Owners.....just quoting our fearless moderator.
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