When reporting a business story it’s always a good idea to get a few of the facts straight before you start…
That’s something that was lacking in Wednesday’s Jenee Osterheldt column in the Kansas City Star.
Osterheldt’s story about saving her beloved Screenland Armour, focusing on the theater conversion costs to digital projection, had more holes in it than the Swiss Cheese on my Reuben.
Jenee stated that, “As the movie industry phases out 35mm film and switches entirely to digital production, boutique theaters and indie multiplexes are struggling to make the costly upgrade.”
That’s only partially correct.
It’s not the digital PRODUCTION that’s the problem, it’s digital PROJECTION. Many movies during the past several years have already been shot—or produced—100% digitally.
It’s the digital playback at the theater level – where all new movies (beginning with 2014 releases) will only be PROJECTED digitally – where the conversion expenses come into play. In other words, there will be no more film grinding through projectors.
Jenee goes on to say that, “A lot of big chains have deals with the movie studios that will help cover conversion costs. Not the independents. They’re on their own, and the costs are deep into the thousands.”
A little investigation would have revealed to Osterheldt that so-called “Virtual Print Fees” (VPF’s) are available from the movie studios to ALL theaters. Circuit multiplexes AND independents.
Under the subsidy program any first run theater qualifies for VPF (assistance) fees as long as it opens 80% of new releases on the movie’s national break date.
According to reliable sources VPF’s for each theater can be up to a possible $1,500.- per movie title until the new digital equipment is paid off.
Of course each theaters ownership has to negotiate its own deal and the actual amounts are usually not discussed.
As for independents around the country with fewer screens in their complexes, they may only qualify for half of the VPF subsidy program—or possibly up to $750 per first run booking.
So whether it’s the mighty Regal, Cinemark or K.C. based AMC and Dickinson – or independent theater operators in Sedalia, Clinton or Nevada, Missouri – the digital conversion costs allegedly follow similar negotiated financial formulas.
I also found it interesting that the Osterheldt’s story mentioned that locally headquartered Dickinson Theatres had filed for bankruptcy last year.
However what she left out was that it was a Chapter 11 Reorganization filing. And more importantly that Dickinson successfully exited from Chapter 11 several weeks ago.
Finally when reporting on the Boulevard Drive-In‘s conversion to digital projection in 2012, Ms. Osterheldt made no mention of K.C.’s big I-70 four-screen Drive-In or the Twin Drive-In theaters.
To date neither has converted from 35mm to digital.
I’ll bet a fund raising campaign column by Osterheldt for those two ozoners would be most welcomed as well.