With the record-setting grosses for Avatar and the continuing success of digital 3D releases, there’s no doubt that 2010 has been a watershed year for digital cinema. After a decade of gradual transition, d-cinema has finally become the standard in many theatre locations. Film Journal International surveyed five early adopters of digital projection to learn how this revolutionary technology has impacted their business. The participants are Dale Hurst, director of marketing at Carmike Cinemas; Steve VanWagoner, VP of marketing at Celebration! Cinema; Ellis Jacob, president and CEO of Cineplex Entertainment; Mike Mihalich, president of MJR Theatres; and Jeremy Devine, VP of marketing at Rave Motion Pictures. We thank them for sharing their experiences.

When did you first install digital projection equipment?
Hurst: March 2006.
VanWagoner: May 2007.
Mihalich: October 2007.
Devine: We began in late 2005. By August 2007 we were the largest circuit in the country to be 100% digital. In December 2009, we purchased 32 theatres from National Amusements and are in the process of further digital conversion.

Jacob: Our entrée into the digital projector world goes back ten years to the year 2000, when Christie approached us to install one of their engineering prototype DCP-H Mark 7 version projectors in our Galaxy Cinemas in Waterloo, Ontario. They didn’t even have a name for it at the time. Christie’s Canadian offices are located not far away in neighboring Kitchener, Ontario, which made this location ideal.

That initial installation began a long-term, close working relationship with Christie as they used our Waterloo theatre as a test lab for their digital projectors. Over the years, the original prototype “1.3K” digital projector they installed was replaced with a new 2K CP2000H model when that became available. Today, that theatre and our circuit overall have a variety of CP2000 models depending on the location, and our new UltraAVX™ auditoriums use their Solaria 2230 DLP Cinema projectors. It has been a great working relationship with Christie and we take pride in our small contribution to the evolution of digital projection.

In 2000, we had one digital projector in our circuit. In 2002, we had two digital projectors, with the second unit located in our theatre in Cambridge, Ontario. Fast-forward to 2008, our digital projection count had grown to 84, and as of June 30, 2010, our circuit has 280 digital projection systems and it continues to grow weekly.

How many digital installations do you have today?
Devine: Approximately 650 of our current 918 screens are digital.
Hurst: 223 locations with 2,121 screens.
Jacob: As of June 30, Cineplex Entertainment had 280 digital screens located in 113 Cineplex theatres across the country, with plans to install approximately 125 to 150 additional digital projectors by the end of the year. We also have 236 RealD 3D systems.
VanWagoner: Eight multiplex theatres are fully converted to digital. And one auditorium in our ninth theatre, which is a second-run location. (We like to put second-run digital 3D movies there!)

What percent of your circuit is digital?
Devine: 71%.
VanWagoner: Approximately 90%.
Mihalich: All 116 MJR screens are digital.
Hurst: 100% of our first-run screens.
Jacob: As of June 30, 21% of our total screens are digital and 86% of our locations have one or more digital projectors installed. A couple of years ago we also committed to making all of our new theatres 100% digital.

How would you describe the impact of digital cinema on your business?
Devine: It positively and profoundly affects all of our operations on a daily basis.
VanWagoner: Monumental. For example, midnight shows of Eclipse. We have 22,000 “sellable” seats in our circuit and we sold over 18,000 of them for the midnight show of Eclipse. That was not possible with film. Also, we advertise that we are not a movie theatre…we are so much more. We are the ultimate entertainment destination. We could not say that with film.
Jacob: Digital cinema has had a very positive impact on our business in a number of ways, including increased programming flexibility, ease of operation and much more user-friendly technology than traditional 35mm projection. The greatest impact has to be our ability to add RealD 3D technology to our digital projectors, which has enabled us to capitalize on the tremendous number of 3D movies that are available now. Digital projection also enables us to expand our entertainment offerings beyond movies by adding a variety of alternative-programming content such as concerts, sporting events, live theatre productions and the hugely popular Live in HD performances from The Met Opera in New York.
Mihalich: The impact has been positive. We are able to have great flexibility in scheduling and make last-minute changes to maximize grosses.
Hurst: We believe offering our guests the ultimate entertainment experience positions Carmike as their first choice for enjoying movies, sporting events, concerts and other big-event screenings in our theatres. Offering digital presentation and the new Big D digital experience with its giant wall-to-wall screen, exceptional 7.1 surround sound, state-of-the-art image presentation and large, comfortable seating gives our customers an incredible, center-of-the-action feeling.

What are the greatest advantages of digital cinema?
Devine: Operational and film-booking efficiency.
Jacob: As I mentioned, increased programming flexibility, easier staff training, and improved picture quality as every digital presentation looks the same, be it the first presentation or the 500th, as the image doesn’t deteriorate like it does with film.
Hurst: We can offer our patrons the best moviegoing experience by providing the highest-quality digital picture and sound.
VanWagoner: Virtual interlocks, digital 3D, alternative programming (sports, UFC fights, Met Opera, concerts, private watch parties like the finale of “Lost”), adding and changing content at the last minute for parties or groups. Our guests love the pristine images, and our projection employees are free to help in other areas of the operation.
Mihalich: Large payroll savings by eliminating projectionists. Better picture on the screen. Being able to increase the number of 3D auditoriums. And the ability to show movies on multiple screens.

Are there benefits to digital that took you by surprise?
VanWagoner: The ease of the transition and the ability to add auditoriums during sellout situations.
Devine: The quick learning curve and high reliability from day one, even as an early adopter.
Jacob: Our technical team said it has been much easier to install, operate and train employees than they originally anticipated, which is great news on all accounts.
Hurst: The most visible element of surprise is the level of excitement that our guests have shown for this new entertainment experience. We are bringing customers to the theatre more frequently to enjoy a variety of entertainment events… Customers are looking at us in a whole new way.

How has digital affected your scheduling of films?
Mihalich: It’s made scheduling much easier as well as far more efficient, and makes it possible to maximize grosses.
Devine: It allows us to totally maximize the building by realizing proper printing levels beyond standard 35mm procedures.
Jacob: Initially when we were first converting and had one or two auditoriums with digital projectors and the rest with 35mm, it was difficult to schedule as some distributors offered their movies in digital formats and others didn’t. We worked through that and now almost all movies are available to us in the format of our choice. Overall, digital allows us increased flexibility in programming our auditoriums, enabling us to better manage capacity utilization, which is good for exhibitors, distributors and, most importantly, our theatre guests. Once we complete our digital rollout, we will get maximum benefit from the technology and flexibility in programming.
VanWagoner: It has made scheduling easier—especially with the big blockbuster movies. We also have two IMAX theatres. One is digital. We can now bring blockbuster IMAX movies to that smaller market where we could not always count on the big movies with film.

How do your employees feel about the new digital technology?
Mihalich: They love it.
Jacob: Our staff loves digital projection and it has been very positively received by all. Youth today have grown up in a digital world, so their expectations of this part of our business are that we would naturally be all digital. Because digital operating systems are all PC-based, they are very user-friendly and these operating systems are well-known to today’s employees.
Devine: They are proud of our being on the cutting edge of the new technology; they appreciate, as does the consumer, the pristine picture that does not degenerate over usage. They find the hard drives a lot less heavy than lugging 50-pound cans! And they are part of a digital age and see this as a logical means of content delivery. So they are happy from a lot of perspectives!
VanWagoner: They love it. Even the film purists applaud now.
Hurst: Our employees are excited to be a part of offering cutting-edge/state-of-the-art technology to our guests. They are proud to be offering the ultimate entertainment experience and associated with a recognized leader in the entertainment business. There's a whole new level of energy in our theaters as we continue to expand the use of digital through the rollout of the Big D concept.

How important a role does alternative programming play at your circuit?
Mihalich: It’s practically a non-factor.
VanWagoner: It’s big, and getting bigger. We have a page on our website devoted to it called “Special Big Screen Events.”
Devine: It is very important, but does not, and will not, supplant the core programming of major film releases from traditional studio distributors. But it does make our modern multiplexes more full-fledged entertainment centers with opera, World Cup in 3D, and other popular cutting-edge programs.
Hurst: We want customers to realize that Carmike can offer more to enhance their moviegoing experience by offering a variety of content at our theatres. As the level of content rises, so will the level of importance.
Jacob: As a percentage of box-office revenue, it is a small but growing portion of our business, but one that I think is an integral component now and moving forward. When I look back 10 years, our alternative programming contained a concert once or twice a year, but the majority of our programming was World Wrestling Entertainment. Fast-forward to today, our guests can now choose from world-class opera and live theatre productions, numerous concerts, comedy festivals, sporting events and more! In fact, Cineplex was proud to showcase all 17 days of the 2010 Olympic Games in several of our theatres across Canada and we could only do this with the use of digital projection. This September will be our fifth season presenting Live in HD from The Met Opera in New York and if you would have told me then how successful it would be in our theatres now, I would have thought you were crazy. Cineplex audiences love the Met productions and have truly embraced the presentations. We have received more letters of compliments and appreciation from our guests for this series than any other presentation we have ever done. Also, it brought people back to our theatres that had left us 20 years ago and we weren’t able to attract them with our traditional Hollywood and Canadian movies. Now they are back and not only coming to see the opera but also movies and other alternative content, which is good news for all of us! Alternative programming and digital projection have really been a significant catalyst in positioning our theatres now more than ever as “entertainment destinations” rather than movie theatres alone.

What kind of feedback, if any, are you getting from your customers regarding digital projection?
Devine: Uniformly positive. The image is rich and pristine and people think it looks really great. Frankly, we encounter next to no nostalgia over 35mm, a great format that deserves our gratitude for carrying exhibition for our first 80 years or so!
Mihalich: Not much. The public only complains when something is obviously wrong. In actuality I do believe very few really know or notice the difference.
Hurst: The guest reaction to our digital and especially our Big D, ultimate entertainment experience has been far beyond our expectations. Customers are commenting about the "center of the action" feeling they experience when attending an event and a whole new way of looking at movies and events in our theatres.
Jacob: Our guests do comment on the great picture quality that digital offers. Others assume that all of our theatres and the cinema industry is already 100% digital. The most obvious guest support for digital has to be their love of 3D technology which digital projectors enable us to offer to our guests.
VanWagoner: Early on they commented on the perfect picture. Now they take it for granted that the picture will be perfect and seats will be available for the really big shows. They also enjoy the alternative programming digital offers.

Is digital a marketing advantage for your circuit?
Jacob: Digital is a buzz word used to market many products today and this is no different for Cineplex. We do market “digital” and also “digital 3D projection technology” in many of our marketing and public-relations campaigns because we know that people understand and appreciate this means quality. In fact, when we launched our new UltraAVX™ auditoriums on June 30, we created a tagline for the UltraAVX brand—“The Next Level of Cinema Has Arrived—Wall to Wall Screen, Digital Projection, Immersive Surround Sound and Reserved Seating.” Each of these elements being important, easily understood and highly valued tactical messages.
Devine: It certainly was when we were an early adopter and it became the powerful enabling platform for modern 3D, providing a distinct advantage vis-à-vis the competition. But we knew all along that the overall digital rollout would take place and believe that is a good thing for the industry. We are happy to have a great deal of practical experience with it already, and it suits us well as an organization as we move forward to convert our recent acquisitions to this format as well.
VanWagoner: Yes! While we don’t flaunt our DLP digital programming much anymore, we do use the alternative programming as our competitive advantage in our marketing (The Ultimate Entertainment Destination).
Hurst: We believe offering state-of-the-art digital presentation and launching our Big D experience gives us an edge by becoming the first choice for customers’ entertainment experience. We make it easy to choose Carmike because customers know we offer the ultimate entertainment experience, unmatched by competitors.