The 2012 Season In Review

I’m happy to report that the 2012 season was one of the best we’ve had in recent years (2011 being one of the worst).  One major difference from last year was the drought that plagued the Midwest.  While a disaster for farmers, it meant that we had few nights of storms and rain showers.  The movies as a whole I would rate as average, but business was steady with the predictable, progressive falloff in attendance from mid-July through the end of the season (mid-September).  As I stated in last year’s review, the studios continue to push back the summer blockbuster season earlier into the Spring.  “The Hunger Games”, one of the biggest grossing films of 2012, was released in March: too early to do any good for the northern clime Drive Ins.  But by mid-July and August, only weak product was being released.  And people won’t come out in large numbers to view weak product, regardless of how good the weather is or how much they like the Drive In theatre venue.  The studios, in effect, are shortening the Drive In season and that is a major long-term problem for those of us here up North.

This was the second year operating our digital projectors and I’ve worked most of the bugs out of the system.  We had another premature bulb failure, but because I have an extra lamphouse for just such emergencies, I was able to quickly switch out and the show went on.  This past February, I attended the factory service technician school (I completed the installation/basic maintenance school last year) for the brand of projector I run (Barco) and so was able to take care of all of my servicing needs.  This should marginally reduce maintenance costs as well as help with reliability (since this theatre now has a certified service technician on site most of the time).  We did upgrade our sound system by retiring our Smart Analog Sound Processor and replacing it with a new digital version.  The sound this season was noticeably better, although I discovered I need to pay closer attention to the gain levels (which can vary from movie to movie) to prevent distortion in those parts of the movie when things are getting blown up.

From a broader perspective, the environment for Drive In theatres continues to deteriorate as it appears all but certain that 35 MM film will be phased out almost entirely after the 2013 season.  Most of the corporate owned cinemas (e.g. AMC, Marcus, and the like) have already either converted or are in the process of converting all of their screens to digital projection.  These large movie theatre companies have struck deals with the film studios to receive what’s termed Virtual Print Fees, or VPFs, to help defray the cost of digital cinema equipment.  VPFs are straight cash subsidies to the theatre from the film studio for showing a movie in digital format, thereby saving the studios the considerable cost of not having to make, store and transport a 35MM film print.  Unfortunately, the rules and processes developed around qualifying for and distributing VPFs are hugely prejudicial against the smaller independent theatre owners (who can least afford the $70,000 to $100,000 per screen conversion cost), particularly Drive In theatres.  Although organizations such as The National Association of Theatre Owners (NATO) and Cinedigm often talk about the desire and need to preserve small town cinemas and Drive In theatres, to date that has amounted to nothing more than lip service.  About 10% of Drive Ins have converted to digital with another 10 % in the process of converting over the next year (anecdotal numbers based on my general knowledge of the field).  Almost none of them, including me, are receiving virtual print fees (another example of big organizations getting subsidies while the little guys get left behind).

Sadly, I predict that half of the existing Drive Ins (now less than 400 sites) will be gone in the next few years (if you want to buy a Drive In, there are many on the market with more on the way).  But you really can’t put all the blame on the film studios and large theatre chains; much of the blame goes back to the Drive In owners themselves.  Digital cinema has been around for over ten years and anyone who was paying attention should have seen that it was only a matter of time before it became the standard for showing movies.  Yet many of the Drive In owners I met continued to stick their heads in the sand and cling to the fantasy that 35 MM film would always be around and that somehow the movie studios had an ongoing moral and legal obligation to provide them with product in this format.  Too many of them continued to operate their theatres the way they were operated in the 1950s, as cheap entertainment for the masses, as opposed to the special niche business that Drive Ins have become today.  As a result, they did not implement the changes to their business model necessary to afford the transition now being forced on them.  Some owners have resorted to fundraising schemes to raise cash for conversion or buying used digital projectors now coming on the market as chain indoor theatres dump their junk (Series 1) to upgrade to newer generation projectors (Series 2: big difference).  Both of these avenues are fraught with difficulties.

Looking ahead for the Highway 18 Outdoor Theatre, we will continue to enlarge our offerings of menu items (to further accommodate those with food allergies, diabetes, gluten intolerance/Celiac’s disease, casein/dairy intolerance, etc.).  I’m going to more aggressively explore and experiment with alternate content in the slow periods of the season (I may have to invest in some additional equipment to do this).  Finally, I’m going to get better signage to encourage more people to come up to the bar/grill behind the screen on weekends and expand my offerings of micro-brewed beer (I will be posting a blog essay on beer styles this Spring).  I’ll also continue to look for more games and playground diversions for the kids (and kids at heart).  This, of course in addition to the endless work it takes to maintain the buildings, equipment and other facilities of a Drive In theatre.

I’m planning on opening this Spring in mid-April.  I’ll announce on my web site and through my newsletter when I have confirmed.  See you all soon.