ELLSWORTH — If someone were to make a movie about small-town theaters being forced to switch to digital equipment, it could be a classic underdog drama in which the protagonist overcomes adversity and triumphs in the end.

But for some small-town theaters in Maine, their Hollywood ending is not stereotypical entertainment fare.

In response to a major push from big movie studios, which expect to save themselves hundreds of millions of dollars each year in distribution expenses, many small theaters have pieced together ways to absorb the conversion costs, which are estimated to be about $50,000 per screen. Others, in boxing movie fashion, are simply throwing in the towel.

In the past month, owners of small, independent movie theaters in Milbridge and Ellsworth have announced they are closing down for good. In both cases, they say the cost of having to switch to digital equipment is just too great to bear. They aren’t the first in Maine to shut down because of the switch. In September 2012, the four-screen Casablanca Cinema 4 in Bethel closed down because it could not make the financial leap into the digital future, according to the Boston Globe.

No longer showing

In Ellsworth, Maine Coast Mall Cinemas screened its final films Monday, Jan. 19. About 35 people, many of them children with their parents, bought tickets to see “Night at the Museum: Secret of the Tomb” or “The Hobbit: The Battle of the Five Armies.”

After the final showings started rolling at 5 p.m., Randy Walls and Leona Gagnon, a Franklin couple who bought the two-screen theater in 2010, said they thought they would have 10 years to get ready for the switch. But the studios have ramped up the pressure to convert significantly in the past two years, they said, and have drastically reduced the number of analog film prints that they are making available to theaters.

“The number of people we’ve seen walking in the door over the past five years has really dropped,” Gagnon said. “It didn’t seem to make sense to make that huge investment.”

The increase in streaming movies online undercut their business, the couple said, and their options for restructuring their finances were limited by their lease at Maine Coast Mall and by the seasonality of their ticket sales. They generally did well in the summer and during holiday season, but during the school year, their sales dropped off sharply.

The couple said they tried raising money online through a Kickstarter campaign but, because they fell short of their $15,000 goal, they were unable to collect the $7,000 that people wanted to contribute. They applied but were rejected for grants, and they also considered moving to a new location. Nothing panned out.

“We’ve been struggling for a year and a half,” Walls said. “We’ve tried many avenues, trying to make it work, and nothing really (came together). It’s too much.”

Making conversions work

According to the National Association of Theater Owners, there are about 5,700 movie theaters nationwide, many of them multiplex venues in metropolitan areas, of which about 4,900 are estimated to have made the switch to digital equipment. The remaining 800 theaters have not. The organization did not have specific numbers for Maine.

Patrick Corcoran, director of media and research for the theater group, said Tuesday that it has been working for a decade to soften the effect of the studio-driven switch to digital on theater owners. But the studios have been determined, he said, because they are expected to save enormous amounts of money by not having to print and distribute thousands of copies of each movie they make.

“To produce and ship a 35mm print to an American cinema costs about $1,500,” according to an article in New Republic magazine about how digital cinema took over 35-mm film. “Multiply that by, say, 5,000 prints for a big movie, and it comes to $7.5 million. Digital formats can do the same job for 90 percent less.”

Movie studios are still experimenting with Internet and satellite delivery systems to make theatrical distribution more efficient, but digital movies primarily are still physically delivered to theaters, including in Maine, on reusable hard drives that work with the new projectors. Those hard drives are still far more convenient and less costly to ship than the bulky celluloid reels.

“Economics is economics,” Corcoran said. “The studios are saving roughly $1 billion a year, forever, just in distribution costs.”

Some smaller theaters may close down because of the industry-wide digital conversion, he added, but “the vast majority” are expected to make it.

Despite the closure of some theaters in Maine, others are forgoing the digital switch. Several small-town theaters that stage live performances, which often are owned and operated by arts organizations, will continue to show classic or other films but not new Hollywood releases.

Kimberly St. Cyr, assistant manager at Lewiston’s Flagship Cinemas, said there is a huge incentive to switch to digital. The equipment is more flexible and lets the theaters show more than the movies they have on hand.

“You can run 3-D movies or you can run DVDs if you have a player attached,” she said. “When we did Camp Flagship over the summer, that’s what we could do. We could just show DVDs to the kids.”

They can even host and play live television, such as New England Patriots football games.

But St. Cyr said the Lewiston cinema is now purely 35mm. The cinema operates 10 projectors, all film. They used to have two digital projectors but sent them over to the Auburn Flagship.

She doesn’t know whether the digital projectors will be coming back.

“It’s hugely expensive, and then you have to convert all the sound equipment, too,” she said. “It’s a huge process to switch over.”

Other small theaters have made the switch to digital projectors and have employed a variety of strategies to pay for the expense. The Alamo Theatre in Bucksport and the Criterion Theatre in Bar Harbor are owned and operated by nonprofit organizations and have made the investment with the help of large financial donations. The privately owned Harbor Theatre in Boothbay Harbor converted to digital after successfully raising money online through a Kickstarter campaign, while Eveningstar Theatre in Brunswick, also privately owned, did the same through Seed&Spark.

A success story, without a happy ending

The Saco Drive-In, considered a victor in this drama, received a digital projector from Honda by winning their Project Drive-in contest in 2013. Though buoyed by the upgrade, owner Ry Russell had to raise ticket prices last season to keep up with rising costs from Hollywood to screen films.

“It made me look like a greedy jerk,” said Russell, who is fed up with the controls put in place by studios, including restricting film distribution by territory and funneling a percentage of ticket sales back to movie companies each week.

He may not renew his lease this spring.

“It’s more and more difficult to make things work and be creative,” he said.

Russell fears for tiny theaters seeking to finance new projectors. They don’t provide an answer to wider problems.

“The digital projector is one wave of a tax on small independent theaters,” he said. “It kills me to say it, but it doesn’t alleviate all the pain points.”

After staging an aggressive campaign to win the contest, he now feels hoodwinked by Hollywood.

“The movie studios convinced me that this theater would be saved with a digital projector. To me it isn’t the case. There are a lot of other things that need to be overcome,” he said.

The owners of Reel Pizza, a two-screen theater in Bar Harbor, saw the writing on the wall several years ago and started saving up to pay for the eventual switchover. They have been showing digital films exclusively for the past year.

Finding value adds

Chris Vincenty and Lisa Burton opened Reel Pizza Cinerama in 1994 in a former auto parts store with a different approach, one that has become more popular in the past several years. They show newly released films and also prepare fresh-made pizza (for taking out or eating in), salads and beer as well as the usual fare of popcorn, candy and soda. There are rows of traditional theater style seats, each equipped with a counter for food and drinks, but there also are old couches and easy chairs where diners can set up TV trays.

Vincenty said recently that because movie theater profit margins can be so low, with studios collecting well over half of all ticket sales, he and Burton deliberately set out to find a way to generate additional revenue that would be entirely theirs to keep. Offering comfortable seating and fresh, high-quality food has helped establish and maintain a solid customer base, he said, but not every movie theater is cut out for doubling as a restaurant.

“I’m basically running two businesses here,” Vincenty said, referring to the food service component of the theater. “Running a full kitchen is hard work.”

If a theater owner is willing and able to take on this kind of added service, he said, the confines of their theater might not allow it. Retrofitting an old theater is an expensive endeavor, even without the added cost of installing digital projection equipment.

“It isn’t anything that any of us (small theater owners) wanted to do,” Vincenty said of making the digital switch.

He said that the old analog projector he had was more than 30 years old but “worked great,” and his customers have not noticed any difference between the old 35-mm prints and the new digital format.

“They’re shadows on the wall,” Vincenty said of the films he shows. “What you’re really selling is the theater experience.”

Making it work

Former Belfast mayor Michael Hurley and his wife, Therese Bagnardi, own two historic movie venues in Maine, the three-screen Colonial Theatre in Belfast and the two-screen Temple Theatre in Houlton. In a 2013 Rolling Stone article about the effect of digitization on independent theaters, Hurley told the magazine that small-town theaters often are integral components of the local economy.

Hurley said Wednesday that he and Bagnardi used a variety of approaches in converting both of their theaters to digital equipment. They did some private fundraising, had some equipment donated by Walt Disney Co. and were able to refinance some of their loans.

Hurley, who also works as a consultant for small theaters throughout the country, said that despite the difficulties that some small theater owners face, the era of the small town movie theater is not over.

He said that if Flagship Cinemas can operate a 10-screen theater in Thomaston and if Narrow Gauge Cinemas can operate a 10-screen theater in Farmington, than Ellsworth should be able to support a multi-screen theater, too. It’s the for-profit operators who have only one or two screens that will continue to have a hard time, even if they switch to digital, he said.

“I can’t imagine Ellsworth isn’t going to have a movie theater,” Hurley said.

The market price for digital projectors has been dropping, he said, to the point that one screen can be outfitted with used equipment, which was unavailable just a few years ago, for less than $50,000 — not an impossibly steep price for most small businesses.

In some places where private owners can’t be found, he said, some government entities have acquired local theaters in order to keep them open. This includes the town of Pittsfield, which has owned the Pittsfield Community Theater since 1977 and converted to digital equipment this past spring.

“I feel that as (some of) these theaters go out, others will come in,” Hurley said. “I see it as an opportunity when it happens.”

What kind of opportunity it may present is debatable. While some in the theater business, such as Vincenty, believe that venues, apart from what gets projected on the screen, need to offer a memorable and distinctive experience, Hurley disagrees.

Most people don’t care about whether they see a movie at a generic strip mall or a historic Main Street theater, he said. The movies themselves will draw an audience, and it’s up to the theater to offer enough viewing options and to have the right mix of ticket sales, personnel costs, concessions revenue, and mortgage payments (preferably) to make it work. All of this should be doable in service-center towns that may have only a few thousand residents, Hurley said.

But Hurley agreed with what many small theater owners have said when asked about their relationships with Hollywood: the industry they depend on doesn’t care if small-town theaters find a way to stay in business or if they close down. It’s the urban and suburban multiplexes that dominate ticket sales, he said.

“These small-town movie theaters are important to their towns,” but not to the movie studios, Hurley said.

In Saco, Russell agrees.

“I foresee this being a really depressing year for the movie industry on the retail side,” he said. “The movie industry itself is the problem.”

BDN writer Kathleen Pierce and Sun Journal writer Scott Taylor contributed to this report.


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