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VOL. 36 | NO. 31 | Friday, August 3, 2012

'Digital rapture'

Hollywood is forcing drive-ins, independent theaters to go digital (at $75,000 per screen) or go away

By Hollie Deese

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Barry Floyd and wife Dawn were watching The X-Files movie in 1998 at the now-closed Sumner Drive-In Theater in Gallatin. It was something they had done many times while they were dating, but this night something was different.

The appeal of watching a movie under the stars was too great.

“I turned to her and said, ‘Wouldn’t it be neat if we owned a drive-in?’” Floyd says. Dawn told him he was nuts. “I said, ‘I know that, but what do you think about the drive-in?’”

That notion kicked off a five-year period of research and planning, including two weeks in 1999 driving around the Eastern U.S. looking at existing drive-ins, determining what they did and didn’t like.

They pulled out a map, plotted existing theaters in the Nashville area and realized Wilson County was a good bet because there was nothing similar in a 50-mile radius. They began looking for land, sold their house in Nashville and moved to Lebanon. In 1993 they borrowed $500,000 and opened Stardust Drive-In in Watertown, adding a second screen two years later.

“We found out real quick that a single-screen drive-in is a really neat hobby that doesn’t make any money,” he says. “I didn’t inherit my granddaddy’s drive-in, and we did not buy the old drive-in on the outskirts of town and reopen it. We built one from scratch.

“And so we have the mortgage payments and the bills that come with building a brand new facility,” he adds. “Once we added our second screen, we became very profitable. We are not rolling in money, but the drive-in pays for itself.”

But a looming change in the industry could put an expensive damper on Floyd’s success, as well as drive-ins and independent movie theaters across the country. Floyd has, in fact, put off expanding to a third screen because of it.

“Us drive-in owners call it the ‘digital rapture,’ because nobody knows the date it will happen,” Floyd says. “The movie studios won’t tell us.”

This “digital rapture” is when studios will stop distributing movies on 35mm film and move to a digital format. That will make current projectors and equipment obsolete, forcing theater owners to invest in new equipment, routers and hard drives at a cost of $75,000 or more per screen.

“Times they are a changing, and so we are changing with the times this season or next,” says Gary Price, owner of the single-screen Franklin Drive-In, two-tenths of a mile across the Kentucky line from Sumner and Robertson counties just off I-65. “We are kind of waiting for the movie companies to give us a timeline when they will no longer support film.”

Studios haven’t set a hard date for conversion to digital, other than soon.

Last December, director Edgar Wright invited Hollywood director elite (Steven Spielberg, Jon Favreau and Michael Bay) to a private screening of the first six minutes of Christopher Nolan’s new film The Dark Knight Rises. The purpose was to convince them to save the format on which the film was shot – 35mm film.

If such heavyweights demand that film be saved, the studios would have to comply. But backers of cheaper, faster digital are fighting just as hard.

“The danger comes from filmmakers not asserting their right to choose that format,” Nolan told LA Weekly. “If they stop exercising that choice, it will go away. I tell people, ‘Look, digital isn’t going away.’”

The new format, Digital Cinema Package, is a collection of files stored on a hard drive, which is shipped to the theater in much the same way 35mm reels are now shipped. The drive is inserted into a server, which runs the digital projector.

The new technology won’t run on traditional film projectors, so if owners want to play the new format they must but new equipment.

Floyd is making the conversion after this season, but not happily. His cost will be $146,000 for two screens.

He has accepted the reality that when the majority of theaters in this country – the multiplexes that control most of the country’s screens – have made the conversion, film will be a thing of the past. Most of the big chains, he says, including those that serve Middle Tennessee, have made the switch to digital.

Drive-ins are not the only small players affected. Independent movie houses also are dealing with the impending switch.

“It would be fairly top of mind for sure,” says Stephanie Silverman, executive director of the non-profit Belcourt Theatre in Nashville. But since the nature of the Belcourt is to run reparatory, foreign and classic films that only exist on 35mm, digital projectors will be a pricy addition, not a replacement.

“We need to be able to screen films via the correct digital formats, so we are definitely going to have to have digital in our projection mix,” Silverman says. “But because we are an independent, we are kind of sitting back for a bit.”

Silverman says she hopes the cost of equipment will decrease once all of the major chains have made the move and purchased their gear.

“It is probably within a year that we are going to have to do it, and we are probably going to have to lay down somewhere in the $200,000 range to do it,” she says of the cost of equipment, sound and electronics. “And that is cheaper than when all this started.”

Still, drive-ins will likely suffer the most.

They almost died in the 1970s and 80s when studios stopped allowing them to show first-run movies. Urban sprawl drove up land values on the outskirts of cities and towns, where drive-ins once thrived, and indoor multiplexes became a more economical model for theater owners.

“Every community at one time probably had a drive-in theater,” Price says, “but for the area we live in it is a seasonal business, so sometimes you get priced out of being a drive-in because the land is worth so much more.

“To say we never get approached would be lying to you, but something better has not come along,” he adds. “Someday, I guess you never know. I guess everybody has their price, but right now we just enjoy being a part of it.”

Drive-ins hit their peak in the 1950s when there were more than 4,000 theaters, according to the United Drive-In Theater Owners Association. The 10-year span of 1978-1988 was the worst for the industry, with more than 1,000 screen closings.

The number of drive-ins increased again in the 90s, but there are still fewer than 400 in the United States. Tennessee has 15 theaters with 22 screens, while states like Louisiana and Missouri have none.

Other theaters in Middle Tennessee include The Moonlight (Woodbury), Valley Drive-in (Waverly), Pink Cadillac (Centerville), Hi-Way 50 Drive-In (Lewisburg) and Sparta Drive-in.

Jimmy Higgins built the Moonlite in Woodbury after a 2005 visit to Sparta Drive-in with his wife.

“There were just so many people there, and we had just bought some property, so I thought we should try that down there,” says Higgins, who also owns two car washes, a storage business, flea market, farm and a land development business.

He priced two screens and learned it would cost $120,000. To save money, he and son Tommy built the framework themselves.

“We both weld some, and I had bought a trailer load of steel pipe in Oklahoma where we ship cattle,” he says. “We came back to the house and started building it and we built it ourselves. It took them four months to build both, and then professionals came in to install the sheet-metal screens.

Business has been good, better every year. In fact, Higgins says the drive-in is the only one of his ventures that has improved over the past couple of years.

But Higgins has no immediate plans to make the digital switch, and will only do so if and when he has to. He also hopes the cost of equipment will eventually come down.

“They claim it will be in the next couple years, and we sure are dreading that,” he says of the digital conversion. “It is about $150,000 for us to change our two screens. We are not sure if it is going to get cheaper or not, so we are holding off. But I’ll buy the new ones if I have to.”

Drive-ins offer a vastly different experience from viewing movies in multi-screen cineplexes, which dominate the industry. And these mostly independent theaters can only exist in communities where they are the only game in town.

Unlike Floyd, who built the Stardust from the ground up, The Franklin Drive-In was built in 1967 and showed its first film in 1968. It was owned and operated by the same family until it was sold to Wayne Price in 1987.

“When my father bought it, it was just part of an opportunity to buy land in the area,” Gary Price says. “He had been in the grocery store business and established two stores in this area.”

Wayne leased it to another family for years, and then leased it to Gary’s sister to run. Eventually, Gary bought it and is in his third season as the owner.

“I just love the nostalgic feel to it,” he says. “I remember when I was growing up, we probably didn’t have the opportunities to go to an indoor theater. We were a large family and not the greatest of income, so coming to a drive-in movie was a great opportunity for us. I chose to be an owner operator because I like that nostalgic feel, being a part of the movies.”

That nostalgia comes with a price, one that many operators won’t be able to shoulder.

“The thing is, folks like me and folks like Gary, we will have no problem converting to digital,” says Floyd, owner of the Starlight. “It is the small drive-ins in the smaller rural towns that are not going to make it.”

Studios anticipate saving so much money on shipping costs that they’ve agreed to help finance the conversion, so for the next 10 years they will pay theater owners a virtual-print fee for each new release shown digitally.

But that is not enough for many to jump right now, and a decision to delay could leave theater owners with nothing to show and the end of their run.

At the National Association of Theater Owners convention in Las Vegas last year, president John Fithian told attendees they would be making the decision to go out of business if they don’t make the decision to go digital.

Price says it would be a shame to lose even one.

“I consider myself a people person, and I love to get out there and talk to people,” Price says. “They love the feeling of getting to meet other friends and family here and make it a social event.

“For some people, taking a summer vacation just isn’t going to happen, so spending some quality family time is good here. And people like the nostalgic feeling. They remember the first drive-in they ever went to. They enjoyed that experience and like coming back.”

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 0 0 0
MORTGAGES 0 0 0
FORECLOSURE NOTICES 0 0 0
BUILDING PERMITS 0 0 0
BANKRUPTCIES 0 0 0
BUSINESS LICENSES 0 0 0
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0