Regal and Digital Theater Projection

[JonathanLB]

As TheForce.net mentions, reported by other organizations, Regal Entertainment Group is becoming the first major theater chain to announce the move to digital projection.

By the end of 2003, most of their theaters will be upgraded to digital capabilities and probably within a few years they'll be fully capable of playing full length digital movies throughout their auditoriums. It is a $70 million project to retrofit the theaters.

So, by May 2005, I'd bet that at least the good Portland-area theaters have digital projection! Bring on Episode III, no more driving to Seattle for digital theaters, haha.

[Darth Viscera]

w00t!
There's a Regal Cinema 20 just over in Rockville

[Figrin D'an]

Maybe now that Regal has announced that they are upgrading to digital, some of the other major theatre chains will follow suit.

Good to see that someone is willing to take the lead on this.

[Roddy Two]

Wonder how they managed 70 million in asset procurement when they're bankrupt.

[Sejah Haversh]

I can see a drawback to this.

Regal already gouges you hard enoug for ticket prices. Trying to pay for all that equipment will only up those prices.

[Darth Viscera]

Regal Entertainment Corp., the nation's largest movie theater chain, plans to retrofit nearly 80% of its locations by the end of next year with digital projectors, high-speed data networking equipment and satellite links, heralding the industry's most aggressive move yet to embrace a future without film.

Satellite links, high-speed networking! Imagine, in the future all a theater might have to do in order to get a "film" would be to connect to a 20th century Fox corporate server and download a 300 gig file. This might stimulate the ISP business, because you'd then have every theater purchasing a T-3 line or something, not to mention how fast the primary distribution server would have to be. This could mean a lot of new jobs for everyone, if only to juice up ISP capacity.

[Roddy Two]

Yes, but as I said...how are they paying for all this, being bankrupt as such.

[Morgan Evanar]

I'd suspect leasing a private DS3/T3 and a large IDE disk array is far cheaper than buying reels of film that have to be developed indivdually.

[Roddy Two]

Doubtful. The expense in buying said reels is in licensing, and giving the theater the privilege of playing the movie. That expense would carry over to the digital format. You'd have a very high overhead initially, due to reformatting all the projectors, and the variable costs would only shrink about as much as it actually cost to make the reel of film, which is maybe a few hundred bucks per reel....maybe.

[JonathanLB]

"Wonder how they managed 70 million in asset procurement when they're bankrupt."

No, Regal is not bankrupt.

Regal filed for chapter 11 bankruptcy protection earlier, along with almost every other theater, and a large corporation put together by a group of investors formed the Regal Entertainment Group (traded publicly on the stock exchange) to buy Regal and two other theater chains (was it Edwards and Carmike? I don't remember...) out of bankrupty. So the new Regal Entertainment Group is actually EVEN BIGGER than the already huge Regal Cinemas Corporation was, which was itself the #1 largest theater chain and had bought a few companies. The new Regal Entertainment Group, then, owns 3 previously bankrupt theater chains, one of which itself owned 3-4 smaller theater chains.

In other words, the bankruptcies, as they often do, led to consolidations in the industry and have given rise to an even more powerful corporation that now controls an interest in a huge portion of the nation's theaters. Regal was based in Knoxville, Tennessee, and one of the company's they bought was Act III Theaters based in Portland, Oregon. Act III was the #11 biggest chain in the entire United States, before Regal swallowed it, and when Regal went bankrupt this Regal Group bought the #1 and two other top ten biggest theater chains.

The power they now control over studios is, well, unprecedented I'd say. It's what the original Regal tried, and failed, to do.

[JonathanLB]

I would propose something that the theaters should ask of the studios, and the studios may not like it, but it seems fair to me.

The digital projectors that THEATERS will buy are going to save STUDIOS $10 million in print costs for every movie they release nationally, basically. So, I think that in the first, oh, five years of digital projection or so, the theaters need to ask that every time a movie is released to their theaters, the studio pays a minimal "fee" that would have went to making prints, but instead will go towards repaying theaters at least a little bit of what they poured into upgrading their technology FOR THE BENEFIT of studios and moviegoers...

[Roddy Two]

Bigger != more financially stable. Was there any mention of coming off chapter 11, cause it seems to me that all these bankrupt theaters did was pool their resources...which may or may not help them.

[JonathanLB]

Not really, see what happened is that when the theaters went bankrupt, they had to sell to larger companies for much cheaper than they may have actually been "worth." So for instance, this Regal Entertainment Group that a number of investors founded managed to buy 3 of the theater chains out of bankruptcy at a fairly cheap price and that probably has allowed them to turn things around.

For instance, I know they have shut down a number of the less profitable theaters, so that has likely cut overhead a bit and helped reduce the problems these chains had before they went bankrupt. One of the main reasons all of the theater chains, like literally every one of the major ones, went bankrupt is because of their massive expansion efforts. That having stopped now, the number of theaters in the U.S. is actually shrinking slightly with closures, but those are mainly of the less profitable ones and the larger, better off theaters remain.

It seems to me the industry will be ok now with the consolidations, but it actually makes it stronger overall, even though you'd think, "Oh wow they all went bankrupt, what a weak industry." Well when one theater chain, or one company like Regal Entertainment Group, controls such a high percentage of the nation's theaters, they have a lot more bargaining power with studios in the terms they negotiate. They can freely say, "Listen, if you think we're going to give you 90% on the first weekend, you are crazy. We'll give you 80% and if you don't take it, then it won't be playing basically anywhere in Oregon, Tennessee, here, there, etc." and they just list all of the cities that they pretty much monopolize.

In Portland, we have ONE major theater that Regal doesn't own, and that is way the hell out of my way 40 minutes away in a weird area of town, the Century 16. It's better than almost any Regal theater, too, lol, and the candy selection rocks, prices are good too, but it's just too far away. I don't have the time to go out there. If they built near me, I'd be interested. So for Rush Hour 2, guess what theater managed to steal all of Portland's almost one-million person moviegoing crowd? Century. Regal had a dispute with New Line and didn't play Rush Hour 2, so my friends and I all went out to Century 16 and saw it there. They played it on 5 theater screens just to accomodate the demand and the lines were incredible, probably some of the biggest I have ever seen just because normally you'd have that business spread over an entire city and instead the entire city went to Century, haha.

[Lilaena De'Ville]

I wish all theatres were Century Theatres. The end.

[JMK]

Great story! :D

[Lilaena De'Ville]

:D I'm trying to get it published.

[JonathanLB]

ROFL, that was great LD. :)