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'Pay the price or go dark': Going digital a giant leap for 'dollar theaters'

Published: Saturday, July 4 2015 1:52 p.m. MDT

Eric Hansen walks by a digital projector at the Water Gardens Movie Theatres in Pleasant Grove, Utah, Wednesday, Jan. 8, 2014. (Ravell Call, Deseret News) Eric Hansen walks by a digital projector at the Water Gardens Movie Theatres in Pleasant Grove, Utah, Wednesday, Jan. 8, 2014. (Ravell Call, Deseret News)

PLEASANT GROVE — For the owners of smaller, so-called "dollar" movie theaters, going digital has required a financial leap of faith.

The average cost to convert a screen from film projection to digital display is between $60,000 and $100,000, according to local theater owners who have made the adjustments.

For someone like Mike Daniels, who co-owns four Water Gardens movie houses in Pleasant Grove, Holladay, Spanish Fork and Hawaii with 24 screens, that's a $1 million investment.

For Phil Clegg, who has owned Towne Cinemas in American Fork since 2003, it meant taking out a loan against the theater.

Lisa Call, manager of the Kaysville Theatre, said her family saw the need coming, planned for it, saved for it and took a loan to pay the balance when they converted three screens in 2013.

Mike Daniels, co-founder of Water Gardens Movie Theatres, creates a playlist of movies with Eric Hansen in Pleasant Grove, Utah, Wednesday Jan. 8, 2014. (Ravell Call, Deseret News) Mike Daniels, co-founder of Water Gardens Movie Theatres, creates a playlist of movies with Eric Hansen in Pleasant Grove, Utah, Wednesday Jan. 8, 2014. (Ravell Call, Deseret News)

"The bottom line is, if you don't go digital, you don't stay in the movie business," Call said. "You have to really decide what you want."

In 2010, most major film studios announced their plan to stop producing movies on 35 mm film by 2014. They now send movies on encrypted hard drives that are plugged into a master server and unlocked by a movie-specific key code.

"We used to get 40-50 pounds of film, five or six reels for each show," said Daniels, who is also the mayor of Pleasant Grove. "Before, it was very mechanical. Now it's digital. You need a different kind of knowledge but one person can set everything up for a week in a few hours."

"It does itself," said Eric Hansen, the manager of the Holladay Water Gardens. "You plug it in, the system ingests the contents. You can pick different language tracks, captions, no-captions, the ads you want, the previews you want. You build exactly what you want on multiple screens. It's a pretty intelligent program."

Eric Hansen holds a hard drive containing the movie Book Thief at the Water Gardens Movie Theatres in Pleasant Grove, Utah, Wednesday, Jan. 8, 2014. (Ravell Call, Deseret News) Eric Hansen holds a hard drive containing the movie Book Thief at the Water Gardens Movie Theatres in Pleasant Grove, Utah, Wednesday, Jan. 8, 2014. (Ravell Call, Deseret News)

The changeover will save a big studio a billion dollars a year, Daniels said. And while the costs are primarily on the theaters, the studios have made programs available to help subsidize the cost.

Hansen, who is part of the National Association of Theater Owners, said some of the smaller theaters opted for a Virtual Print Fee program, paying per movie for digital projection.

But many are biting the bullet and finding ways to pay for a wholesale change.

Daniels raised the ticket price at his Water Gardens theaters from $3 a movie to $3.50. Surprisingly, attendance doubled, he said.

"People are still coming," he said. "We were worried that the price increase might turn people away."

Candy tables at the Water Gardens Movie Theatres in Pleasant Grove, Utah, Wednesday, Jan. 8, 2014. (Ravell Call, Deseret News) Candy tables at the Water Gardens Movie Theatres in Pleasant Grove, Utah, Wednesday, Jan. 8, 2014. (Ravell Call, Deseret News)

And his audiences tell him they like the change. The digital picture is brighter and very clear. It's more stable as opposed to film, where the picture began to vibrate with long-term use.

Daniels also paid to upgrade the sound quality to Dolby 7.1.

Daniels started converting the Pleasant Grove theater in November 2012 and currently has most of his screens in Hawaii and Holladay on digital projection. The Spanish Fork 8 theater is still using film on reels, but Daniels expects it will be digital by mid-year.

"We had a choice — pay the price or go dark," Daniels said. "We all knew digital conversion was coming and at this point, at least one major studio is no longer producing film. During 2014, most of the big studios will only be releasing digital versions of their movies."

Mike Daniels, co-founder of Water Gardens Movie Theatres replaces a hard drive containing previews into its case in Pleasant Grove, Utah, Wednesday Jan. 8, 2014. (Ravell Call, Deseret News) Mike Daniels, co-founder of Water Gardens Movie Theatres replaces a hard drive containing previews into its case in Pleasant Grove, Utah, Wednesday Jan. 8, 2014. (Ravell Call, Deseret News)

Clegg, who also works at Utah Valley University as an assistant dean, said he and his wife considered leaving the business or selling the theater, but still have 10-15 years before retirement. They wanted to stay open for the community as much as for themselves.

"Right now, we'll continue," Clegg said.

Clegg said customer support is good and he likes being able to provide work for teenagers and college students.

Daniels likes being free to close on Sundays and offer family movies (the Water Gardens franchise does not screen R-rated films) and a variety of concessions for $1-$3.

He feels there is a niche market for families who cannot afford $8-$12 movie ticket prices.

The view of a screen through a window from the projector room Water Gardens Movie Theatres in Pleasant Grove, Utah, Wednesday, Jan. 8, 2014. (Ravell Call, Deseret News) The view of a screen through a window from the projector room Water Gardens Movie Theatres in Pleasant Grove, Utah, Wednesday, Jan. 8, 2014. (Ravell Call, Deseret News)

"It works out," he said.

Call said the Kaysville Theater is "just a hometown folksy place" where families can come, watch a good film and afford to get a little popcorn, too.

The theater is still able to charge only $2 for weekday movies before 6 p.m. and $3 for weekend and evening shows.

Sharon Haddock is a professional writer with more than 35 years' experience, 17 at the Deseret News. Her personal blog is at sharonhaddock.blogspot.com. Email: haddoc@deseretnews.com

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