April 12 (Bloomberg) -- Cinedigm Digital Cinema Corp. has signed agreements with more than 100 drive-in theaters to install digital projectors, a move aimed at helping owners compete with modern multiplexes.
The conversions from 35mm film are expected to be complete by early summer, when studios release major films including new “Iron Man” and “Star Trek” installments, Cinedigm and the National Association of Theatre Owners said in a statement.
The cost of digital conversion, typically about $70,000, has presented a dilemma for cash-strapped drive-ins, which typically operate one or two screens for a few months of the year. Under the agreements with almost a third of the remaining drive-ins, studios will help owners repay loans for projectors and screens. The plan is similar to one that helped indoor cinema chains make the switch.
“We’re very focused on the smaller exhibitors, the ones with fewer screens,” Cinedigm Chief Executive Officer Chris McGurk said in an interview. “They’re such a piece of Americana, it would be an absolute shame if we could not help them convert to digital.”
The number of drive-in cinemas in the U.S. has declined to 357 from a high of 4,063 in 1958, according to the website of the United Drive-In Theatre Owners Association.
Cinedigm, which also distributes independent films to theaters and for home video, will promote the funding program next week in Las Vegas at CinemaCon, the annual trade show for cinema operators, McGurk said.
Studios are phasing out film prints of movies, creating a dilemma for cinemas that haven’t switched to digital. The move eliminates the cost of film and subsequent expense of shipping thousands of reels to theaters for every movie they release.
Like the digital financing program for indoor theaters, the drive-in plan calls for studios to share savings with theater operators to cover conversion costs, according to the statement.
Cinedigm, based in Morristown, New Jersey, closed unchanged at $1.48 in New York. The stock has gained 5.7 percent this year.
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