Exhibitors Speak Out

Many of you know me from my 15-year career with Marcus Theatres. I have decided to change jobs and I’m now the senior manager for Harman Cinema. But, with my long career in exhibition, Alan Roe asked me to moderate a discussion among exhibitors

Mark Collins:  Good afternoon. Many of you know me from my 15-year career with Marcus Theatres. I have decided to change jobs and I’m now the senior manager for Harman Cinema. But, with my long career in exhibition, Alan Roe asked me to moderate a discussion among exhibitors — and I thought it would be fun to do that. So, let’s begin by having everyone introduce himself and give me us idea of who you are and where you started.

Dave Ballew:  I’m director of construction for Alamo Drafthouse. I guess I was kind of born to do this.  My father was a union projectionist and theater manager for 30 years. I’m the youngest of six kids and Dad worked like a dog to raise me. My first job was tearing tickets; I worked in the booth, then here I am. It was a tough start for me.

Victor Talavera: I’m the engineering services manager with Flix Brewhouse. My first time in the cinema world was in high school. I had a job at a movie theater and accidentally got into projection.  I was fooling around up in the booth with the projectionist at the time, got caught and I decided, “Oh, I’m actually learning how to do this stuff.” I did that for the next two-and-a-half years of high school; I left for quite some time and came back to it again. I started with Flix Brewhouse about eight years ago.

Kirk Griffin:  I’m director of presentation technologies for Harkins Theatres. I started 38 years ago as an assistant manager in a little Mom and Pop place.  We had a total of nine screens at that time. I joined Harkins Theatres and I’ve been working with them on and off ever since. At some point, I started fixing the projectors because nobody else knew how – and it evolved from there.

Bill Menke: I’m senior vice-president for Marcus Theatres. I started out in high school when my sister, who was a cashier at the Ward Parkway Twin in Kansas City, called me in December of ‘68 and said, hey, “it’s between Christmas and New Years and they need to hire people,” so I started as an usher and worked Parkway for a year. And then I moved over to Fox Midwest Theaters as an assistant manager and the popcorn oil got in my veins and I’ve been doing it ever since. I tell everybody that I’m actually still usher because you don’t lose those things and you learn those principles on the job. It’s a lifelong endeavor. I’ve done every job there is in the theater and it’s just a fun adventure. The only thing I miss is all my hair that I started out with back in 1968.

Collins:  We are all getting to at least the 10-year mark when it comes to digital equipment and — some may be older, depending on the theater chain you work at. What are your plans for refurbishing or refreshing or replacing equipment?  Let’s begin with you, David.

Ballew: For the most part, we have no set plans yet. We’re in good shape. Currently all of our projectors are 4K – and the audio in our auditoriums is a minimum of 7.1. As our VPF contracts come to the end, we’re working with Sony and others to explore our options. We will definitely be replacing some of our oldest equipment. The most important thing we’re doing is staying on top of the year-end support timeline, so we don’t get caught with the equipment that can’t be serviced efficiently, or at all.

Talavera:  We’ve been around for about eight years, so we are starting to creep up on the 10-year mark on our original location. At this point, we’re looking at budgeting for replacement on some of the equipment. We started implementing a new program last year, called a CMMS, which is a Computerized Maintenance Management System.  What that does is actually keep track of all of our assets. That’s not just in cinema, but all of our kitchen equipment, HVAC, you name it, we are able to track it. And what it allows us to do is keep track of any work orders, whether it’s parts replacements, or downtime, including cinema equipment. We’re able to look at it over a period of time and see how it’s progressing, how it’s degrading — and then to cost out and determine where we go from here. Do we want to continue to invest in upgrades and repairs or is it about time to replace the item?

Griffin:  With the VPFs ending, we also ended a lot of our service contracts that were written into the whole program. Now we’re kind of out on our own and having to foot the bill with every issue that comes up, so we have an 8- to 10-year replacement that’s both on the projector service side but also on some of our legacy sound processors and other items in their end of life. We did some mathematics the other day and it looks like probably about 25- to 30-cents of every ticket is going to end up having to be pulled back into replacement equipment costs.

Collins:  Manufacturers love that.

Griffin: I think everybody in the room understands that this is a new cost that theaters up to this point really haven’t had to pay for. That’s what’s happening with digital equipment systems. I used to have 35 projectors that were 20-25 years old and I could keep them running with a sprocket or a belt or this and that; it was small change compared to the costs that we are seeing when we have a digital projector fail. We’ve taken the tact that it’s a part of business now. It’s going to be a cost that’s associated with staying relevant in the cinema industry and the exhibition world and that we are going to have to maintain the equipment to keep great presentations on the screen.

Ballew:  That’s one of the things we ran into as well. Looking at life of this equipment in general, we are starting to put budgets together of what are the 3-year, what’s the 5-year costs.  These are costs we’ve never had before.  We had the VPF roll-off and we own the equipment — but technology is moving ahead by leaps and bounds and we’re trying to figure out: what’s it going to cost?

Menke:  When we go in to do a complete remodel of a complex, that’s when we really upgrade the technology for projection and sound within those complexes. It’s a wholesale change-out. Equipment that can still be re-utilized is moved into storage to be used as a bone yard to support some of the other Series-I equipment out there. We still have a lot of Series-I servers that are operating just fine right now.  We’ve replaced a few hard drives and such, and if that equipment is no longer supported by the manufacturers, we have a parts inventory from that equipment we’ve removed but are still good. And the same thing for projectors. We have a plan for upgrading for the PLF screens, but this technology is really outpacing our ability to invest and see that return on the investment. We’ve gone from having projectors that last 50-60 years where you just buy nuts and bolts —  to today, where we’re in an IT world with end of life of five or six years on a server, and light engines where we didn’t know if they would last that long,  but I’ve been pleasantly surprised with the great service that we have received there.  I think it’s a matter of budgeting and going forward, maintaining the technology to be competitive in the marketplace – because we’re also competing with sporting venues and concerts and everything else.  We’ve got to continually raise the bar; we have to be in a state of constant change.

Collins:  When it comes to some of the equipment, I would assume most of you have a laser projector of some sort in your theaters.  When we first started, we heard that laser projectors can give better color and obviously, better light, but what is the driving force for adopting them?  Is it technology or are we at the point now where lasers are close to the cost of the xenon projector?

Ballew: We have several locations where we’ve put laser projectors in. Lasers have given us a more economical light source, better light stability and higher contrast. In a case of RGB, they’ve given us noticeably better color. From our standpoint, we still haven’t taken advantage of all the marketing and exposure we could get for the technology.  Alamo has been pretty low-key on promoting that this is the technology and this is what we are doing, so come see us. We’re really pushing to just give the best picture we can and so we look to laser to do that. We did the comparisons between all the different factors and machines — and laser was really 4K resolution and it did make a difference. So we ran the numbers to see how much it was costing — and we did the whole energy model on all that, with HVAC comparisons — and it just made sense economically over a period of time to give it a shot.  And so we’ve been pleasantly surprised and happy with the results.

Collins:  Just a quick follow up. Are you at the point where you could say, it’s going to be laser moving forward?

Ballew:  It’s laser moving forward.  But I’m just worried about front view. What will happen when lasers come off and we have to go to direct view LED screens?

Talavera:  We still currently use xenon in the majority of our theaters, although we have a few of our screens that do use lasers, in particular in the boothless setups that we have. We use lasers mainly for the fact that they require less attention; bulb changes are less frequent when you have laser in that setup.  So right now, that’s currently where we have our lasers. We’ve seen the images that we get but the cost, of course, is a big factor although it’s getting closer to what xenon is now. It is something we are definitely looking into at this point, but we’re not yet saying that we will do all lasers moving forward.

Griffin:  We made the bold step in removing exhaust fans from our new projects so at 500 CSM per fan, all that conditioned air being sucked out of the building is gone and now and we only have the exhaust for the PLF, so I think we have boldly stepped into the laser world. I don’t know what’s going to happen with direct view.

Collins:  And unless there is something that has changed in the last few months, Marcus is kind of in the same position, right?

Menke:  Everything going forward is going to be laser for the Marcus group and we have lasers installed on many of our PLFs right now, and certainly the enhancement with laser is that you can easily exceed the light expectations and specifications for DCI — whether it’s blue phosphor or the RGB. I had a chance to visit yesterday with Real D at their offices to see their ultimate screen and it was quite an incredible 3D image looking at the trailers of Dumbo in 3D. I can’t wait to see that on our newest ultra screen that we’ll be rolling out here with the opening of Alita, and for the other 3D pictures. I’m impressed with the evenness of light that you can obtain and if you want a super bright screen with laser, you can get that very easily corner-to-corner. And to me that’s important because that’s what we sell to guests — the presentation, the pristine images – images that are crystal clear, with the digital sound.

Collins: Yeah, and to continue to provide all that indefinitely into the future, we’re going to find a money tree somewhere and it’s all going to happen.  It’s all good. Gentlemen, thank you.