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Jefferson, WI: Highway 18 Outdoor Theatre Gets Digital Cinema Conversion

Posted on Monday, May 9th, 2011 3:43 PM

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The Highway 18 Outdoor Theatre in Jefferson, Wisconsin has undergone a conversion from the tried-and-true film projectors to the relatively new technology of Digital Cinema Projection.

The single-screen drive-in located just East of Madison has been showing movies since 1953. In 1999, a new owner came in and refurbished the business and in 2000, the movies started playing again.

Now, in 2011, the screen came back to life again, but this time, it was lit with a new digital cinema projector that uses a hard drive containing the movie instead of film. Owner Lee Burgess made the decision to take the digital cinema leap after contemplating the future of the movie business and how he wanted to run his business. Here is an excerpt from his blog entry on his web site discussing his decision:

... digital projectors (basically large computers with flamethrowers strapped on the front end) are expensive and theatres have been reluctant to upgrade.  But through a combination of incentives and other factors, the movie theatre industry is switching over.  Roughly half of the screens in the U.S. are now digital and conversions are taking place at the rate of about 1,000 a month.  By the end of 2012, most screens will be running digital.  Overseas markets are also rapidly converting.

But not all screens.  Roughly 95 percent of the screens in this country are owned by major theatre corporations who have access to capital markets and therefore the means to finance the conversion to digital (roughly $75,000 to $100,000 per screen depending on circumstances).  The other 5 % are made up of small independents, like myself, who do not have the same financial resources or clout as the big boys.


Finally, studios are increasingly cutting back on print counts for movies released in the second half of the summer.  They are not as confident that these movies will earn them a return on their money and they want to save on costs (my presumption).  But whatever the cause, when I go to book a movie during this period, more and more I’m being told: “Sorry, no prints available.”

Now, there are some old-time independent theatre owners who insist that this digital is all BS and that film will always be around.  Maybe they’re right, but I don’t think so.  I think that in two years, film will be pretty much gone and either a theatre pays to switch to digital or go out of business.  Many small independent operators can’t afford digital equipment or their theatres don’t generate enough profit to justify the investment.  I think, and am afraid, that half of the Drive Ins will be out of business in five years.

So it was gut check time for me: do I invest almost $100,000 more in my Drive In or do I just milk the business for the next few years and shut down?  I could have probably waited another year or two before being forced to make a decision, but I’m being slowly strangled to death.  If I decide to convert to digital, why wait?  Will I get more business with digital?  Doubtful, but my business shouldn’t decline over time as it would if I stuck with 35MM.  Will I save on expenses?  No, in fact maintenance costs will be higher than with 35M.  Is this a good business decision?  Only time will tell.  Bottom line: I’ve already invested too much time, energy, and money in this theatre to just let it die.  My attitude is: ‘in for dime, in for a dollar’.

So I crossed the Rubicon; I went to the bank and dug further into my meager savings, spent a week in California undergoing Installation and Basic Maintenance training, and signed the purchase order last week.  Equipment delivery is set for April 15th and hopefully I’ll get this whole thing up, running, and figured out by our opening date of April 29th

Kudos to Mr. Burgess for making the decision to invest in his business instead of give up on it! He seems to have gone into this with due consideration, and it also seems that he cares about what he does. Here's hoping that the crowds looking for a good time at the movies will take a look at the Highway 18 Outdoor Theatre when they're choosing their destination!

Fox 6 in Milwaukee did a short feature on the theater and its digital cinema conversion, which aired on Friday, May 6, 2011:

What's old is new again in Jefferson. The Highway 18 Outdoor Theatre has the same 80-foot screen. But it's owner says the venue now holds the distinction of being the only outdoor theater east of the Mississippi River with a digital projector.

The article also has a video of the story, so click the Read link below to view the article and the video!

The Wisconsin State Journal also covered the news in an article titled Jefferson drive-in upgrades to digital.

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