Going digital may push drive-ins to early end

375759 02: Moviegoers enjoy the Fiesta drive-in movie 375759 02: Moviegoers enjoy the Fiesta drive-in movie theater August 10, 2000 in Carlsbad, New Mexico. The death of the drive-in has been proclaimed far and wide. In the 1960s, more than 4,000 operated in the nation, according to the United Drive-In Theater Owners Association. Today there are around 500 throughout the nation. Drive-ins originally were built on the outskirts of town, where land was inexpensive. As cities grew so did property values, and many of the theaters were razed in favor of housing developments and malls. In the late ''70s and early ''80s, competition from indoor theater multiplexes and home videos helped reduce the number even further. But some of the surviving drive-ins are making a comeback such as the Fiesta drive-in that has been running for the last 10 years. (Photo by Joe Raedle/Newsmakers) Photo Credit: Getty Joe Raedle

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LOS ANGELES -- Drive-in movie theaters that scraped by during the surge in modern multiplexes are edging closer to extinction as Hollywood phases out the 35-millimeter reels they need to show films.

Most of the remaining 368 U.S. drive-ins, down from more than 4,000 in 1958, must decide whether to pay as much as $70,000 to install digital projectors for their large outdoor screens. About 10 percent have, and the United Drive-In Theatre Owners Association anticipates studios will move to electronic delivery only as soon as the end of next year.

"It's a pain," said Thomas Epps, who is trying to sell the Swingin' Midway Drive-In Theatre outside the eastern Tennessee town of Athens, population about 13,000. "It's an expense to us and it's not going to bring in another dollar. Nobody is going to say, 'Let's go to the drive-in tonight because they've got a little better picture.' "

The digital conversion, which spares studios the cost of buying and shipping thousands of heavy reels of film for every movie they release, has created a dilemma for drive-in owners, who typically operate one screen and depend on a mix of nostalgia and novelty to attract patrons in warm summer months. While large chains and smaller exhibitors were aided by financing plans, drive-ins don't have that option yet.

The cost is challenging cash-strapped owners to find a solution. At 75, Epps plans to retire once the Swingin' Midway is sold. In the meantime, he is leasing a used 2004 digital projector to attract a buyer for his 500-car cinema. Once he sells the theater, he'll pay the balance due on the equipment with the proceeds. His total cost will run about $40,000.

"It's hard to justify," said John Vincent, president of the drive-in association and owner of the single-screen Wellfleet Drive-In Theatre in Cape Cod, Mass., which is converting. "About 10 percent converted last summer. It's too early to tell how many will ultimately make the switch."

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Vincent is working with Cinedigm Digital Cinema Corp., a provider of digital equipment for theaters, on an deal with film studios that would help owners obtain and repay loans to cover the conversion. Under a similar program for indoor theaters, the Morristown, N.J.-based company arranges financing and makes money installing and servicing equipment.

To help cover upgrade costs and repay loans, studios pay exhibitors a fee based on the number of times a film is shown in digital format. The fee comes from money the studios save by not making and shipping film prints, Chris McGurk, Cinedigm's chairman and CEO, said in an interview.

Cinedigm is trying to work out the details of a plan within the next six months, according to McGurk, who said he's making progress. That would give drive-in operators time to make the conversions, which often require some remodeling of projection rooms, McGurk said. His goal is to convert as many as 400 of the remaining 611 screens.

"Everyone in this industry needs to be really focused on trying to figure out ways to help this unique part of Americana survive and thrive," McGurk said.

Theaters that remain tend to be outside of urban cores, where land is cheap. Survivors have added family-friendly features like playgrounds and grassy areas in front of parking spaces that can fit lawn chairs.

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