Banner
Welcome, Guest
Username: Password: Remember me
  • Page:
  • 1

TOPIC: Lease or buy?

Lease or buy? 08 May 2006 21:44 #25089

  • showandtell
  • showandtell's Avatar
  • OFFLINE
  • Junior Boarder
  • Posts: 34
  • Karma: 0
Can anyone chime in on the pros and cons of leasing projection equipment for a first time theater owner?

I'm worried that the transition to digital distibution is going to happen faster than the time that we'd be able to pay off the analog equipment.

Keep in mind that we are a mom & pop shop. We're first timers into this market and we need to keep our start-up costs as small as possible. Any advice would be helpful.
The administrator has disabled public write access.

Re: Lease or buy? 08 May 2006 23:16 #25090

  • rodeojack
  • rodeojack's Avatar
  • OFFLINE
  • Platinum Boarder
  • Posts: 1242
  • Thank you received: 3
  • Karma: 0
At some point in time, that could be a very good question. Whether that time is here yet is probably just as good.

A couple of things get my attention in this regard, though past that point, I'd have to defer to people with more knowledge than I...

First, is the fact that the chains are still, incredibly, building new theatres... seemingly, wherever they can find enough empty land for the building and parking lot. With few exceptions, these new theatres are equipped with 35mm film projectors. Most accommodation for digital is in the advertising area.

Being predominately paper entities (not a lot of real estate), it seems to me that these companies would have a lot to explain to their stockholders, were they to suddenly find themselves looking at replacing a fairly substantial capital investment before it could be amortized. Since that seems unlikely to me, the fact that they're still buying a ton of film gear must mean something.

Second, and John Pytlak could elaborate a bit on this one: Kodak continues to spend R&D money on... ready?.... F I L M !!! Granted, it may take a whole lotta years before the 35mm infrastructure can be totally replaced. However, the product they're putting out right now is pretty darned good. If film were truly at the end of its life, one would think Kodak could jump totally on the digital bandwagon and allow its film products to coast to a graceful end... still serving well to the finish.

Some theatres are building on a totally-digital infrastructure. We have one in Washington, and techs on another board speak of other start-ups that are either fully-digital, or nearly so. However, you can count these examples on a couple of hands. Finally, not all studios are fully committed to providing digital content. If you're planning on running anything but first-run releases, it could be a very long time before all the films you might play would be converted.

Timing and education would seem to be the goals right now. The equipment is out there. Is right now the best time to go digital, or should you wait a little longer for the systems and financing structures to mature a bit? If you don't jump in right now, you're in good company. A whole lot of larger exhibitors haven't yet made the move. You could learn a lot by watching how smoothly their transition goes.

If you're worried about the prospect of having a booth full of new, but unusable 35mm gear laying about, maybe you should consider used machinery. Most any projector in the XL or Century line can give many years of service, and parts are readily available at very reasonable prices. Strong and Christie platters are sturdy and reliable, and available on the used market. Even if you got as few as 3-5 years out of a decent set of projectors and platters, they wouldn't owe you much, but could look as good on the screen as newer machinery.

Properly designed, your sound system can bridge both technologies. Pay close attention to that area. Then you can add digital when the time is right for you, and if the industry realy takes hold, you can phase your projector out without feeling guilty about what you paid for it.

That's how I'd be looking at it, especially in a case where I was looking to formalize a financing plan right now. However, the great part of boards like this is the perspectives of others, so hopefully we'll get some more input for you.

Good luck!

[This message has been edited by rodeojack (edited May 09, 2006).]
The administrator has disabled public write access.

Re: Lease or buy? 09 May 2006 11:16 #25091

  • John Pytlak
  • John Pytlak's Avatar
  • OFFLINE
  • Platinum Boarder
  • Posts: 891
  • Karma: 0
The majority of the equipment expense is the screen and the sound system, which is pretty much the same equipment for both film and digital presentation. A 35mm film projector, lamphouse, platter, and other film handling equipment (e.g., rewind bench, splicer) is still much less capital expenditure than an equivalent Digital Cinema setup.

To put Digital Cinema into perspective, the first Digital Cinema showings were over seven years ago (I narrated the side-by-side demos on the stage at Bally's at ShoWest 1999). Seven years later, the number of theatre screens equipped for digital cinema worldwide is around a thousand. While there are still over 100,000 theatre screens showing 35mm prints. So only about 1% of screens are equipped for Digital Cinema after seven years. Future growth of Digital Cinema will certainly be more rapid, but don't expect 35mm film prints to be scarce anytime soon.

Of course, if you have your heart set on equipping your theatre for Digital Cinema, consider Kodak Digital Cinema:
http://www.kodak.com/go/dcinema
http://www.kodak.com/eknec/PageQuerier.jhtml?pq-path=2709&pq-locale=en_US&gpcid=0900688a80517216

John P. Pytlak, Senior Technical Specialist
Customer Technical Services
Entertainment Imaging
Research Labs, Building 69, Room 7525A
Eastman Kodak Company
Rochester, NY 14650-1922
Telephone: +1 585-477-5325 Cell: +1 585-781-4036 Fax: +1 585-722-7243
E-Mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it
Website: http://www.kodak.com/go/motion
John P. Pytlak, Senior Technical Specialist
Customer Technical Services
Entertainment Imaging
Research Labs, Building 69, Room 7525A
Eastman Kodak Company
Rochester, NY 14650-1922
Telephone: +1 585-477-5325 Fax: +1 585-722-7243
E-Mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it
Website: http://www.kodak.com/go/motion
The administrator has disabled public write access.

Re: Lease or buy? 30 May 2006 02:53 #25092

  • Cinemateer
  • Cinemateer's Avatar
  • OFFLINE
  • Gold Boarder
  • Posts: 300
  • Karma: 0
If I understood 'showandtell's question right, they are looking for advice on leasing VS buying 35mm equipment, not the pros and cons to 35mm VS digital. I would like to know if it's better to lease instead of purchasing as well being a first-time theater owner (soon). This would include audio equipment as well. Thanks!
"In a place like this, the magic is all around you. The trick is to see it." -Martin Landau
The administrator has disabled public write access.

Re: Lease or buy? 30 May 2006 17:14 #25093

  • Mike
  • Mike's Avatar
  • OFFLINE
  • Administrator
  • Posts: 5026
  • Thank you received: 41
  • Karma: 15
leasing vs. buying is a big question no matter what it is. Lease companies would finance anything that is movable. I.E. seats, etc. Leasing is a financial consideration. I don't think cinema suppliers would "lease" a system on a year to year basis like you rent a car. So buying may be the same as leasing except for upfront costs.

Michael Hurley
Impresario
Michael Hurley
Impresario
The administrator has disabled public write access.

Re: Lease or buy? 30 May 2006 20:36 #25094

  • showandtell
  • showandtell's Avatar
  • OFFLINE
  • Junior Boarder
  • Posts: 34
  • Karma: 0
We've also found out that leasing companies will not lease to a start-up...
The administrator has disabled public write access.
  • Page:
  • 1
Time to create page: 0.180 seconds
attraction attraction
attraction
attraction
attraction
attraction