The world’s cinemas appear to be moving at a fast pace to replace film projectors with digital. The rash of new VPF deals require exhibitors to roll-out quickly to gain maximum subsidy benefits. But we shouldn’t forget that we’re in the late adopter stage, and late adopters pose a very different sales challenge than early adopters.
For one, late adopters have very discerning buying habits. To a high degree, the reason they are late adopters is that they seek stable technology, a prudent position to take. A lot of late adopters are also mom and pop shops, which are least likely to have the financial documentation necessary to convince banks that they are a good bet for investment in digital cinema technology. If the bank doesn’t feel it understands the cinema business, it may not be comfortable backing a major change of technology in cinemas.
For European cinema owners, the concern over instability of the technology was magnified by NATO’s push to showcase higher frame rates and laser illumination at CinemaCon earlier this year, followed by similar demonstrations at Cine Europe. The message was confusing: Sign up for your VPF subsidy now before it’s too late…and by the way, the technology you’re going to purchase today will soon need to be replaced. Not the message that late adopters need to hear.
The impact of confusing messages could be heard from some exhibitors in this year’s Media Salles conference, held in Amsterdam. There remain exhibitors who either feel victim to technology, or they question the state of the technology as prudent late adopters. Either way, they are not always convinced that conversion is in their favor. Inconvenient facts abound. No one can point to a cost savings when operating digital projectors. The idea of alternative content is attractive, but no one is making money with it. And if Warner is hedging on high frame rates, why should exhibitors jump for it? If exhibitors are cautious, banks must be even more nervous.
As far as technology is concerned, a better message could be crafted. Instead of feeding the press with the idea that all movies will soon be shot at higher frame rates, exhibitors should be encouraged that 24 frames per second projection isn’t going away. The DCI specification is focused on 24 fps content, and the very existence of a uniform 24 fps footprint dictates that it must be supported for wide release. To this point, while some major filmmakers may express preference for higher frame rates, distributors are scrambling to figure out how to create high quality multiple frame rate versions to carry out a wide release.
The most difficult group to convince, however, is the banks. There are no stories to point to telling of new profits being generated by digital projectors. It isn’t necessary to have a digital projector for advertising, and as proof, many chains in the US continue to use small LCD projectors for this purpose. Beside, cinema advertising revenue is down, not up. One can’t point to 3-D as a new source of revenue, as press is not telling glowing stories about it. When it comes to the press, banks are more likely to notice the articles quoting lower attendance at cinemas. In a niche market, there is always concern about the resale value of equipment, but equally so, banks are worried about the ability of the mom and pop cinema to survive.
With so much energy expended on installing and learning to operate new technology in the cinema, not enough energy has been spent bolstering ticket sales. Money spent on VPF exhibitor contributions and the installation of digital projectors might produce a better ROI if put into floors, wall treatments, and seats. After all, not many people leave a cinema commenting how nice the projector looked. But such thoughts are mere ramblings for the small cinema owner. Converting the last 10%, if it can be converted at all, is indeed a challenge.