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Author Topic: Debating on buying Drive-In Justin Hamaker Film God Posts: 2253 From: Lakeport, CA USA Registered: Jan 2004 posted 08-03-2011 05:10 PM                        Yes, that is the concession stand/projection booth at the tree line. This idea of a projection building closer to the screen and a 4K projector is interesting. However, it does circle back to whether cost to do this is justified for a business that may be on it's last legs to begin with. I'm guessing to cost of a 4K digital system and the construction of the building would wind up being more than at least 3-4 year's revenue. In a larger market, with a year round operation, it would probably make sense.  |  IP: Logged Monte L Fullmer Film God Posts: 8367 From: Nampa, Idaho, USA Registered: Nov 2004 posted 08-03-2011 05:41 PM                     Yes, true: very tough decision to make - weither to do the converson to want to stay in business and to justfiy the cost, or see what happens down the road...and save the expense of conversion. EDIT: and sorry, I gave the wrong NEC model number. It'd be the NC3240S, 4k unit that would handle such light throw and screen size ... and it could go up to a 7kW bulb.  |  IP: Logged Jack Ondracek Film God Posts: 2348 From: Port Orchard, WA, USA Registered: Oct 2002 posted 08-03-2011 10:26 PM                        Just to add to Justin's observations: The same economics that affect single screen indoor houses apply to drive-ins. If you're going to run on the break it will be very hard to maintain an audience. Two to three-week minimum runs can be tough when you're trying to keep your client base thinking about you, not to mention the higher percentages you'll be sending the studios. Right now, even if you have the property available to multiplex AND no community or bureaucratic resistance, you'd be looking at adding screens, landscaping & equipment costs to digital conversion and the investment in the property itself. Seems to me you'd have to have a pretty impressive operation out of the box to make something like that work. On the other hand... if you live in the same town... maybe even on the drive-in property, have another job (or better, are retired) and are looking for something to keep you off the couch, something like this on a subrun level can still work. Still... there's the digital stuff...  |  IP: Logged Monte L Fullmer Film God Posts: 8367 From: Nampa, Idaho, USA Registered: Nov 2004 posted 08-04-2011 02:42 AM                     ..basically - eventually getting between a rock and a hard spot .. what to do ... (sorry, I was thinking that most drive-ins were sub-run based, not first run based to where I understand now of the comparison between the venues of a drive-in and a single screen after the above explanations..Hollywood is turning this digital stuff unto an unfair situation for some..) -Monte  |  IP: Logged Barry Floyd Phenomenal Film Handler Posts: 1079 From: Lebanon, Tennessee, USA Registered: Mar 2000 posted 08-08-2011 09:06 AM                        I guess it all depends on the debt load of the drive-in vs. the existing and expected grosses on whether digital conversion is an economically viable option. We celebrate our 8 year anniversary at our drive-in on the 27th of this month. During those 8 years, we've watched our numbers steadily increase every single year, of course the biggest jump was when we added our second screen. There are several smaller single screen drive-ins within an hour's drive of our place, and I really don't see how they could pay for digital conversion given what they bring in in grosses. Realistically - from a financial standpoint, digital conversion isn't that big of deal for a single screen drive-in. Going rate right now is around $75k-$85k per screen, which breaks down to a little over $1,000 a month financed over 7-10 years, and that's not taking into account any VPF's if your a CBG member. How is that not do-able? We're looking to convert within the next 12-14 months, but not even considering 3D. Foremost on our minds right now is whether or not to move forward with our building expansion project that was planned for this fall and winter? We've got about a $170k expansion planned for our existing concessions/projection building (bigger restrooms, bigger kitchen, more efficient serving lines, loading docks, walk-in freezers, etc.) and the bank has already said they'd be willing to do it. I mentioned digital projection to my local banker, and they wouldn't touch that with a 10 foot pole. I just don't want to get into a financial shape where I have a really really nice concessions/ projection building - but not have any way to get the movies to the screen. Doesn't really matter how nice your building is if you don't have movies to show...  |  IP: Logged Mike Blakesley Film God Posts: 12767 From: Forsyth, Montana Registered: Jun 99 posted 08-08-2011 10:38 AM                        I'm surprised your banker balked at digital conversion, considering you would be out of business eventually if you didn't convert. Is he unfamiliar with that fact? Maybe you could print-out some of the posts from conversion-related threads to help convince him that it's a necessary move. I think you're right in not considering 3-D for the drive-in.  |  IP: Logged Barry Floyd Phenomenal Film Handler Posts: 1079 From: Lebanon, Tennessee, USA Registered: Mar 2000 posted 08-08-2011 11:38 AM                        Mike... I think where he was going was that with the physical building, they'd have something tangible to resell if we were to ever default on the loans, as the expanded building increases the value of the property. The projectors (as he explained it) would have no value to the bank if they had to reclaim them in the case of a default. The hardest part of the digital conversion thing for me as an independent exhibitor is the whole, "it's coming it's coming - but we can't tell you when" thing. It's kind of like the CBG. We were members of the CBG for several years, but dropped them because we could never get definitive answers. CBG was like, "You've gotta join the CBG because of our exclusive digital projection deal - just wait, it's gonna be good", but they'd never tell us what "the deal" was or "how good" it was going to be. I put up with it for 2 or 3 years, and finally said forget it. My drive-in is one of the higher grossing drive-ins in the state, and we're at a good spot financially as 2010 yielded a 21% higher gross than 2009, and so far 2011 is at 15% over 2010. The economy might suck right now, and people may not be able to afford everything they need, but they always seem to be able to afford the things they want. I just don't want to borrow $175k to expand the building, then find out a year and a half later that our debt to income ratio is out of line for financing digital projection. The only definitive thing I've seen as far as the elimination of 35mm prints was a letter penned by Chuck Viane from Disney as he announced his retirement, and today's article from Deadline Hollywood where Fox International will no longer be distributing 35mm prints to Hong Kong after December 31st of this year.  |  IP: Logged Louis Bornwasser Film God Posts: 4441 From: prospect ky usa Registered: Mar 2005 posted 08-08-2011 08:15 PM                        "Lease that which depreciates; buy that which appreciates." I think your bank knows something. If I were going digital, I would expect a zero value in 5 years. Louis  |  IP: Logged Mark Gulbrandsen Resident Trollmaster Posts: 16657 From: Music City Registered: Jun 99 posted 08-08-2011 08:28 PM                     Sorry Louis... Digital has film beat for lumens hands down light level vs. watts used. Especially the new 4K projectors. In a D.I. typically 30 to 40% of the light is wasted. You can't squeeze enough light through a 35mm apreature without at least a chiller on the water jacket and not burn each frame... A high speed intermittent might help.. but they no longer exist as an off the shelf part. I do know of one DP-70 that ran with a 10kw lamp with a chiller on the cooling plate. No other projectors have cooling ability that even comes close to that projector though... There is one Digital projector that can take an 8kw lamp and do ~40,000 lumens. And that is just a 2K projector... In upgrades or new installations for D.I. or cinema film is a dead issue already, especially at the banks. Mark  |  IP: Logged Monte L Fullmer Film God Posts: 8367 From: Nampa, Idaho, USA Registered: Nov 2004 posted 08-08-2011 11:59 PM                     Course, when one leases, isn't that a good reason for a tax write-off due to being a business expense in your P&L books?  |  IP: Logged Barry Floyd Phenomenal Film Handler Posts: 1079 From: Lebanon, Tennessee, USA Registered: Mar 2000 posted 08-09-2011 10:34 AM                        The drive-in owner's association has worked out a package for it's members which features Barco’s new Series 2 32B projector. Yeah it's 2K, but looks like we'll drive it with a 6.5k lamp. For 60 foot wide screens like my place has, it ought to be pretty good. Anything will beat my Brenkert BX-60 I have on screen 2!  |  IP: Logged Louis Bornwasser Film God Posts: 4441 From: prospect ky usa Registered: Mar 2005 posted 08-09-2011 01:04 PM                        Mark: my comments above were purely financial. Louis  |  IP: Logged Mark Gulbrandsen Resident Trollmaster Posts: 16657 From: Music City Registered: Jun 99 posted 08-09-2011 06:46 PM                     You should talk to a local credit union instead. Many of them are more about taking care of the member and not thinking so much about how they can screw you. Mark  |  IP: Logged

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