Older suburban theaters must adapt in digital age
The historic Tivoli Theater in Downers Grove might appear to hark back to the Golden Age of Hollywood. But its heart now boasts of the future -- a digital age that is shaking up movie theaters across the suburbs.
Tivoli's parent company, Tivoli Enterprises, invested about $7 million to install digital projectors and other modern equipment at all 13 of its Tivoli and Classic Cinema theaters with a total of 100 screens.
It's a decision many local theater owners are facing in the next 18 months as Hollywood completes its transformation to digital-only distribution of movies. The conversion is more than a decade in the making, and big cineplexes generally have made the change, leaving smaller, older -- and often, most beloved -- theaters to grapple with the end of the celluloid era.
The costly upgrade to digital has been linked to one recent suburban theater casualty. The Arlington Theaters -- Arlington Heights' only cinema -- closed last week. Director of Operations John Scaletta said negotiations to renew the lease and install digital technology broke down.
Others, like owners of the 85-year-old Catlow Theater in Barrington, are still deciding their next steps.
"We only charge $5 per ticket and our concession prices are low, so it's not like we have extra money pouring in," said Tim O'Connor, co-owner of The Catlow with his partner and fiancée, Roberta Rapata. Such a conversion could cost them about $100,000 for the necessary equipment, he said.
Having weathered the transition from silent films to talkies or from stereo to Dolby sound, some old-time movie theaters could find themselves becoming a thing of the past.
By late 2013, all movies coming out of Hollywood studios are expected to be fully digital and will require digital projectors and other equipment to display them in movie theaters, experts said.
There are about 40,000 movie theaters in the United States and Canada and more than half of them have converted to full digital operations, according to data from Texas Instruments, which supplies technology used inside some new digital projectors produced by four major companies, including NEC Display Solutions in Itasca.
Movie theaters must make some tough decisions to deal with change, said Steve Kraus, owner of Chicago-based Lake Street Screening Room, where movie critics view new releases. He also is the projectionist for film critic Roger Ebert's film festivals.
"Film prints will be going away, from what the studios are saying, probably in the next year or two," said Kraus. "So if these smaller theaters want to stay in business, they'll have to make the switch to digital."
A minimum of about $60,000 is an estimated cost just for the new projector to serve one screen. If the theater has more than one screen, that cost multiplies. Additional costs include a central digital library server, Kraus said.
Kraus said Hollywood film studios expect to save a lot of money when they stop printing copies of a film, packaging the reels and shipping them to thousands of theaters.
While Kraus himself is in the midst of a digital transformation, he is sad to see the old projectors become part of the past.
"Few of the newer projectors will last 50 years like the older ones," Kraus said. "Some of those old ones are still running and all you have to do is put state-of-the-art pieces on them. The audience won't even know if you have an older projector with an up-to-date lens."
NEC in Itasca expects its already busy Digital Cinema Division to see a flurry of activity in the next 18 months as the deadline approaches, said division General Manager Jim Reisteter.
The division already has outfitted a number of suburban theaters, including Marcus Theatres in Elgin, Gurnee and Addison; iPic in South Barrington and Bolingbrook; and the Hollywood Blvd. Cinema in Woodridge, Reisteter said.
The NEC systems can cost $50,000 to $75,000, which includes a projector, server, other hardware and equipment. Some film studios offer subsidies to help theaters cover some of the costs, Reisteter said.
NEC partners with Texas Instruments on its digital projectors, which offer certain security measures, including anti-piracy controls to keep movies from being copied and sold illegally, Reisteter said.
Reisteter said the new technology offers theater owners more flexibility. "They can put any kind of content in there," Reisteter said. "They can show concerts or sporting events and attract a whole new clientele."
Such possibilities, as well as remaining viable in the future, were important for owners of Tivoli, which began its theaters' transformation in November and finished in March.
"If you want to stay in business, then you need to be in business to play with the big boys," said Chris Johnson, Tivoli's vice president of operations and son of owner Willis Johnson, who led the digital conversion. "We had to sit back and ask, 'Are we good enough?' And we felt we are and wanted to do the best job we could and not look back."
"We were ahead of the curve in technology and perhaps the first chain to install 100 percent of the (enhanced) projectors," Johnson said.
That meant working out some kinks with other equipment in order to ensure compatibility, he said.
"Our customers didn't see any of our challenges that we had to handle. It was all behind the scenes," Johnson said.
The Tivoli and Classic Cinemas didn't raise prices due to the overhaul. Some concession items were increased 25 cents or 50 cents, mostly due to the economy, Willis Johnson said.
At Arlington Theaters, Scaletta said he had been negotiating for about a year to renew the lease and install digital technology upgrades "in order to compete on a level playing ground" with other upgraded cinemas.
But the negotiations fell through and the movie house was forced to close and lay off 25 workers, he said.
"We are closed. Thanks for the memories," the theater's marquee reads.
At the Glen Art Theatre in Glen Ellyn, plans are under way to spend about $400,000 and install the new projectors, new sound systems and related equipment for its four screens by the end of the year, said manager Eric White.
"We have no option," White said. "You might as well say if you're not going to do this, you're going out of business next year."
At the Catlow, O'Connor is exploring a few different options "that might allow us to convert over to digital," but he said single-screen theaters like his are at a disadvantage.
"Since we run very few shows per week, there's probably little interest with the distributors whether we convert or not," he said. O'Connor and Rapata have owned the 706-seat Catlow since May 1988.
The Catlow showed a silent film when it opened in 1927 and then survived the switch to talkies in 1929. The theater later switched to stereo sound and then to Dolby surround sound. A larger CinemaScope screen was permanently attached over the stage to accommodate the new formats. Then, the old reel projection system was replaced by a platter system.
There were other transitions -- the emergence of TV in the 1950s, video in the 1980s, the onslaught of area multiplexes since the 1990s, and, more recently, DVD/Blu-Ray movies, video games, the Internet and widescreen TVs at home. Competition clearly has hit from all angles.
"So, this theater has had its share of bumpy rides over the years," said O'Connor. "But, so far, we've been lucky enough to have a loyal group of moviegoers that love this theater."