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January 1st, 2012, 5:51 pm

2012: The End of Movie Theatres?

The year 2012 marks the end of the Mayan calendar, and lots of people have used that occurrence to say that a cataclysmic or transformative event will happen. Unless the Mayans were big into going to their local cinemas, that remains dubious.

The movie theatre industry has been undergoing a transformative revolution in the last few years. Theatres have been converting from film presentations to digital performances of movies, and like any other revolution there has been collateral damage.

A film projector would cost a theatre around $50,000, and last thirty or forty years. New digital projectors cost upwards to $150,000, and will probably not last more than ten years... if that. Converting to digital is obviously very expensive, so financing programs have been set up to help theatres with the costs.

This conversion is being egged on by the movie studios, who will save bucket loads of cash in the process. Under the old film system, studios would strike several high quality film prints from the original negative and thousands of lower grade prints. An average print would cost around $3,000; multiply that cost for every screen for every movie that is released in any given year and you get a lot. I've heard that each studio will save 600 million dollars each year. Enough money to make several Adam Sandler films.

To help with the conversion, studios are giving some these savings to exhibitors, but will only do so for ten years... enough time for the current digital projectors to no longer work. Also, starting in 2012, some studios have set a deadline to the theatres to convert to digital. Other studios have said that they will start to charge more to the theatres if they continue to play film.

All of this weighs heavily on independent theatres. Unless they come up with the cash to go digital, the studios will essentially put them out of business.

But the big theatre chains aren't going to be safe either. Digital installation and maintenance are expensive. These costs will unfortunately be passed onto the customers with higher ticket prices and more expensive concession items. Supposedly, the average ticket price to see a movie is around eight dollars

Expect these prices to go up... way up.

I'm thinking around twenty bucks or more.

Personally, I don't want to spend a dollar for the latest Roland Emmerich film let alone twenty bucks. And I know that I'm not alone. Expect more people to stay home and watch films in the comfort of their own homes. Incidentally, movie studios have also been working on deals to make new movies available for home viewing upon theatrical release.

2011 was not a good year for movie theatre box offices. Some say that it was a bad year for movies. Maybe. 2012 looks like a good year though, with lots of high profile movies coming out.

Can the Avengers or Batman save us? Only time will tell.

JR

Comments:

Twentydragon, January 2nd, 2012, 2:50 am

Yeah, if movies start costing $20 to watch in a theater, I'll have no part of that. I'll just wait a few months and buy the disc for $15.

Thanks for the heads-up, JR!

Gibson Twist, January 2nd, 2012, 7:32 pm

For $20 a ticket, I'm going to demand a lot more from a movie than we've been getting in recent years. The real effect, maybe even more than smaller theatres being hurt, will be the death of low-budget, artistically driven films. Especially considering the precarious state of video rentals right now, tres mal pour vrai!

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