How to start a cinema

12 Appendix 1: Sample Options Appraisal

In 2010, an opportunity presented itself to venue A to access sufficient capital funds to support the installation of digital cinema equipment in its 200 seat full-time cinema. Technology has moved on since then and digital film projection is here to stay and has undoubtedly become the dominant format in the UK. Many of the decisions and issues posing that venue are still relevant today for smaller venues who haven’t yet made the transition to full DCP screening capabilities so we have included this appraisal and updated where necessary.

The venue offers a seven-days-a-week public cinema programme and occasional academic lectures. The programme mix includes crossover Hollywood and world cinema, with the bulk of the programme populated by contemporary releases, with occasional talks, Q and As and live cinema-related events.

In recent years, the programme has consisted of three and four-day runs of recent releases which appear in the programme between six-twelve weeks after the national release date. The venue is the only independent cinema serving audiences in its town and the surrounding area. There is one commercial cinema in the same town. The commercial cinema has digital projection and screens first run films as well as Event Cinema (opera, theatre, sport events etc.)

This options appraisal examines the implications of this development on the venue’s cinema programme.

At the outset, the venue recognises that acquiring digital cinema projection brings the following key benefits:

  • Overall ease of operation compared to 35mm
  • Established (DCI) standard across the industry
  • Access to new theatrical release titles
  • Design flexibility – the operating box can be remote from the projector
  • Optimum and consistent image and presentational quality
  • Reduced film transport costs vs. 35mm print distribution
  • Access to alternative content; interface to other digital formats
  • Reducing capital costs – By autumn 2010, there will be a first round of used 2k DCI compliant digital projection facilities available in the market.
  • Distributor/supply side cost benefits
  • Providing the same high quality of film projection as the commercial competitor in the town

All of these considerations are being made in the context of greatly reduced public sector funding to support the independent cinemas on an ongoing basis, and no capital funds available from traditional arts/film funding sources.

Options being examined

The following options were identified:

Option 1: Do nothing

The opportunity to install digital cinema facilities at venue A took place at a time when the global film industry was in the midst of a transition from traditional analogue 35mm film practices to digital technology. This transition is now complete with 98% of screens in the UK offering digital projection.

In distribution and exhibition, the US industry Digital Cinema Initiative (DCI) group has established a minimum standard digital format – 2K resolution, JPEG 2000 file format – which ensures image quality, enables adequate content encryption and provides operational and economic advantages to both distributors and cinemas. This minimum standard became known as ‘D-Cinema’.

In the UK, the installation of DCI-compliant digital projection facilities has accelerated from the initial 240 screen Digital Screen Network supported by the UK Film Council and established by the end of 2006, with a total of 2991 digital screens worldwide to over 127,689 digital screens worldwide in 2014.

By the end of 2009, the UK had three solely digital multiplexes, and a no. of smaller 1-3 screen independent sites with solely digital projection facilities. At beginning of 2010, there was also one multiplex equipped with 4K digital projection.

On the supply side, nearly all new release titles are now made available in digital format, from approx. 20% in 2008, to over 50% by the autumn of 2009 and over 60% by Spring 2010. Over recent years there have been approximately 700 films released theatrically in the UK each year. The majority of titles up until 2012 were being released as 35mm prints, as the majority of UK cinemas continue to make a full transition to digital.

There has also been an increasing shift towards digital supply from independent distributors releasing historic, highly specialized and niche audience films; and numerous public sector initiatives and commercial decisions to digitise an increasing no. of classic, historical and archive preserved films. By contrast, the stock of 35mm distribution prints (of films that have been released commercially) in the UK is in general not being replenished and renewed. In summary, by the end of 2010 D-Cinema became the dominant format in UK distribution and exhibition markets for new release films.

In this context, it is almost essential that cinemas aim to make the transition towards digital projection because the film industry has already made the transition to full digital distribution and exhibition. Any venue retaining 35mm-only capacity will effectively be ‘left behind’ with no access to any new release titles, and therefore leading the venue towards a programme drawing from a repertory of films available in deteriorating prints. Option 1 is therefore only feasible if the venue is prepared to transform its programme from a new release independent cinema to a film society or old-fashioned rep house.

Option 2: Digital cinema to replace existing 35mm projection

Cost and space issues led the venue managers to consider installing new digital cinema projection equipment as a direct replacement for their current twin 35mm projector system. In terms of cost, the removal of the 35mm projectors would remove some annual service costs which they can ill afford to keep with the addition of new service costs for the digital projection system. As for space, the current twin 35mm projector system, with the two machines already set up in the optimum positions for screening, and occupying most of the floor space in the projection booth, leave little space for the digital projector, server and work-room for the projectionist. Installing the digital projector and server would require at least reconfiguration of the existing projection box, more likely an extension which turns into small capital project in itself.

Adopting this option will enable the venue to access new first run material and Event Cinema. In the short and longer term, the venue will have no access to the repertory of older films released at some point in the UK but not yet digitised and reissued.

Option 3: Digital cinema to be accommodated alongside 35mm projection

The programme of many independent cinemas is often driven by the imperative to present as diverse a programme as possible, with a consistent range of contemporary and historic cinema represented in the programme. As its region’s leading independent cinema, and with its ties to a university, venue A is looking to sustain such a programme into cinema’s digital age. In order to maintain access to the widest possible range of films, venue A therefore needs to consider the possibility of installing new digital projection system whilst retaining its existing 35mm capacity.

Only this will enable the venue to maintain its position through programming as the flagship independent in the region, and distinguish it more clearly from local commercial cinemas.

Taking up this option creates some issues around space in the projection box and adds some cost considerations to the basic costs of acquiring and installing the digital cinema system. The current space is insufficient to accommodate two 35mm projectors, a digital projector and server and operating room for the projectionists. This in itself throws out a number of different solution options.

A structural feasibility would determine whether it is possible and costly to extend the projection box and in this scenario, consideration needs to be given to the re-positioning of all the projectors to ensure appropriate lines and angles to the screen.

The venue might choose to retain 35mm capability, but reduce this to a single 35mm projector with a new long play unit. This could be accommodated in the existing projection box space avoiding any building works/costs but would require some technical reconfiguration of the box and the cost of a new long play tower or platter. Aside from cost, the main downside would be a cultural one – reduced access to film prints held in public film archives, which require cinemas to have twin projector systems. A quick audit of archival programming at the venue over the past 3 years would reveal whether access to this sort of content was worth retaining or could be sacrificed.

A third option here would be to find some alternative housing for the projector outside of the projection box. There are now several digital cinemas in the UK wherein the projector is housed remotely from the control box, physically inside the cinema. A technical feasibility study, looking at the projection box and available space in the auditorium, would determine whether this represents a viable solution which, again, avoids the need for remedial building work to the projection box.

Option 4: Consider other additional aspects of digital cinema technology (3D/satellite)

A further option, especially for some independent cinemas and film societies, is provided by lower specification 3 chip digital projectors, and playback from Blu-ray and DVD, a practice referred to as ‘e-Cinema’. The image quality from the latest generation of such digital projectors is now to a standard acceptable to many small-scale cinema exhibitors, and non-theatrical exhibitors (film societies, schools, hotels, community groups), and the technology is significantly more accessible both in terms of technical operation and capital cost. The critical difference with this style of operation lies in the range of films available to the exhibitor. At present, not all new releases are made available in Blu-ray format, and most are released for public exhibition from 16 weeks after the initial theatrical release, coinciding with the release of the DVD for home entertainment.

With the installation of a digital cinema system, the venue is also able to consider 3D facilities for the screening of digital 3D films; and the installation of a satellite dish which will enable the venue to present live transmissions of ‘alternative content’ ranging from theatre and opera, through to concerts and sporting events.

3D requires additional capitalisation of approximately £10,000. The first wave of digital 3D releases, which peaked with titles such as James Cameron’s Avatar in December 2009 and Alice in Wonderland in March 2010 provided a fresh injection of interest in commercial cinema and new revenue potential for exhibitors, as admission to 3D films carried a premium as standard.

Summary/Recommended option

The conclusion to be drawn from the above analysis is that not to add digital cinema facilities would effectively condemn Venue A to a reduced range of films and no capacity to develop its cinema activity.

The appraisals highlight the timeliness of adding digital cinema facilities in order simply to maintain the venue’s programme and profile as the area’s leading independent cinema; and the importance of keeping, if possible, some 35mm projection capacity alongside digital cinema. By starting to look at the various technical permutations, it’s possible to identify an ideal technical solution for the venue, which can then be properly researched, costed and tested.

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