by Caetlin Benson-Allott

from Film Quarterly Winter 2012, Vol. 66, No. 2

Slipping into my neighborhood art house one recent afternoon, I wondered how much longer that theater—the Avalon, a nonprofit community film center in Washington, D.C.—would, could continue to exhibit film. On November 9, 2011, 20th Century Fox sent a letter to exhibitors informing them that “within the next year or two” it would “adopt the digital format as the only format in which it will theatrically distribute its films.”1 That change is likely to come in Spring 2013, and when the rest of the Hollywood distributors follow suit, their domino effect will push independents to abandon celluloid as well. Exhibitors must therefore convert to digital projection or lose their product, and this economic imperative will radically alter our experience of cinema. True, US movie theaters have always reflected the commercial underpinnings of film culture. From movie palaces to drive-ins, grind houses to art houses, they reflect a wide variety of business models. Digital conversion threatens that diversity, and by extension the diversity of our film experiences, because it imposes a singular business model on cinema. As the Avalon’s lead programmer, Andrew Mencher, explains, “the [digital] system was designed for commercial movies” and the corporate megaplex. It is financially untenable for many independent and nonprofit theaters, the same theaters that exhibit many of the movies you read about in Film Quarterly. In short, the real impact of digital projection will be not the changes it brings to sound or image, but the sobering truths it reveals about our alleged cinephilia. Digital conversion exposes the tenuous but cherished fantasies of community cinema that underwrite art houses and nonprofit theaters, not to mention our notions of ourselves as cinema-goers. Now we must underwrite them or accept monoculture at the movies.

It is important to understand that this threat comes from the business of digital conversion, not the mechanics of digital projection. At the operational level, digital cinema strongly resembles film exhibition: A theater owner signs a rental agreement with a distributor for a certain movie, and the distributor physically delivers that movie to the theater via courier service. 35-mm films arrive in multiple canisters, and projectionists thread them onto large platters for projection. Digital movies come on hard drives called digital cinema packages (DCPs), and theater managers exhibit them by inserting a DCP into a server in the projection booth, entering a decryption key, and then programming the server to play the movie on a networked projector at scheduled start times. Digital and 35-mm projectors require different forms of labor and maintenance and different power supplies, but otherwise converting a 35-mm theater to digital cinema actually requires little alteration to the projection booth—that is, after you buy the necessary digital equipment and dispose of your old 35-mm system.

That equipment is very expensive, and its expense facilitates greater corporate influence over independent theaters and their programming. It will cost the Avalon more than $100,000 to convert its two screens to digital projection, but as Executive Director Bill Oberdorfer acknowledges, “We basically have no choice. It’s an industry mandate.” Independent theaters across the United States are accommodating that mandate as quickly as they are able, hence the not-for-profit Cinemapolis in Ithaca, NY, has begun converting its five screens one at a time to mitigate the considerable financial impact. As non- and not-for-profit theaters, the Avalon and Cinemapolis can seek grants and donations to help pay for digital conversion, but the large initial outlay nonetheless threatens their business plans. Cinemapolis’s Executive Director, Scott Bliss, estimates that conversion will ultimately cost $325,000, a problematic sum, because “the return on investment is quite lengthy and almost prohibitive financially.” Some larger distributors offer to attenuate this burden with virtual print fees (VPFs), a profit-sharing scheme that Bill Oberdorfer likens to “a shell game.” A VPF is money a distributor pays to an exhibitor each time that exhibitor books one of their DCPs. Typically, these payments are routed through intermediaries, companies that manage VPF agreements with multiple distributors; conveniently, many of these intermediaries also manufacture digital cinema servers. All their VPF agreements include nondisclosure clauses to prevent comparison, and most are forty to fifty pages long. Because the Avalon is a registered nonprofit, Oberdorfer had access to pro bono legal counsel while reviewing VPF offers, but he concedes, “I don’t know what we’d do otherwise. Just sign?”

That prospect is harrowing for art-house owners and aficionados alike because some elements of the VPF agreement are brutally clear. To receive VPFs, an exhibitor must install a top-of-the-line digital projection system that complies with specifications dictated by the Digital Cinemas Initiatives (DCI), a Hollywood trade organization. VPF agreements can also restrict whose films exhibitors may project on their newly purchased system and penalize them for changing screens or cancelling shows. Furthermore, if an exhibitor wants to program a film from an independent distributor who is not part of his VPF agreement, that independent distributor may still have to pay the VPF fee. Programmers fear that such requirements will prove prohibitively expensive for smaller distributors. Consequently, Andrew Mencher believes the VPF “is not a good contract” for the Avalon, but it may not to be good for anyone interested in movies made and distributed outside the Hollywood system.

Fortunately, the Avalon does not need a VPF agreement to subsidize their conversion; it has a generous donor base that Oberdorfer will turn to for financial assistance when they convert later this year. Without those donors, though, the Avalon might lose the very programming control that characterizes the nonprofit community film center. According to its mission statement, Avalon “entertains, educates, serves, and connects . . .DC communities” with a mix of wide-release studio projects, independent films (those not prohibited by noncompetition clauses from nearby multiplexes), and special programs produced in collaboration with nearby embassies. Signing a VPF agreement would jeopardize that business plan and by extension the Avalon’s unique position in D.C. film culture. For example, the Avalon collaborates with several nearby embassies on international film programs and exhibits a different foreign feature “virtually every Wednesday night as a one-off screening,” as Oberdorfer proudly explains. But, he warns, “our best reading in terms of the VPF agreement is that that may be prohibited or there might be some penalty for taking their thing off the screen.” In short, Oberdorfer fears that the VPF intermediaries will not make exceptions in their contracts to accommodate the unique mission of nonprofit theaters. “I just don’t think that’s on their radar,” he speculates. “I don’t think it’s part of their business model.”

Cinemapolis also refused to sign a VPF agreement even though it needs to convert as quickly as possible to preserve its business model. As a rural art house, Cinemapolis builds its audience by “capitalizing on the press, reviews, and media buzz” that accompany mini-major and studio specialty-label releases. Reductions in the number of new 35-mm prints being struck by distributors are already compromising that business plan. So although Bliss finds it “hard . . . to say to Fox that I’m grateful” for accelerating the industry’s conversion to digital projection, this impetus may make it easier for him to execute Cinemapolis’s programming mission: “Being 35-mm only right now . . . our schedule is a little erratic at times because we want to play a certain title, we have a tentative date for it, and then as we get closer to that date, it kind of gets pushed back a little bit more because it’s done great business [somewhere else] and they’re holding onto it.”

Thus digital projection is actually an issue of access, not aesthetics, for independent exhibitors. Whereas Bliss hopes digital projection will increase Cinemapolis’s ability to program coveted titles from distributors such as Fox Searchlight and IFC Films, Oberdorfer and Mencher worry about its impact on the Avalon’s special programming, but they all believe that digital cinema will advance the art house’s mission to, in Bliss’s words, “provide the best presentation possible.” In fact, they are banking on it. For Bliss and Oberdorfer to ask donors for funds to convert their theaters, that conversion must produce perceptible improvements in the viewers’ cinematic experience. Thus Bliss understands Cinemapolis’s conversion fund drive as an exhibition contract with its donors: “If someone gives us a certain amount of money for this, I want them to be able to go in that theater and realize the difference and understand it and say, ‘That looks really great,”’ not ‘What did I give money for?”’ To that end, Andrew Mencher supports that digital projection because he believes it will better reflect the intentions of the digital filmmakers he programs. In the past, he says, “I’ve always thought it was strange that a film shot digitally would be projected on 35-mm.” Switching to digital projections will aid the Avalon in its mission to exhibit “the best of film” now that it is no longer made with film.

Thus Bliss and Mencher implicitly refute hyperbolic antidigital diatribes like Roger Ebert’s oft-cited “The Dying of the Light,” which rather redundantly advises readers “to (1) find a theater that doesn’t use digital at all, (2) doesn’t use Sony projectors [specifically], or (3) still projects light through celluloid the traditional way” (May 24, 2011, http://blogs.suntimes.com/ebert/2011/05/the_ dying_of_the_light.html). As programmers, they note that digital cinema merely reflects the varying presentation standards of its exhibitors. Hence Bliss observes, “I’ve seen some really bad digital presentations, but they’re in the same places that you see really bad 35-mm projector presentations.” When I wrote about Drive (2011) for this column last year, I saw it at an art house and a multiplex, and it looked better at the former not because the format was different (it was exhibited on 35-mm in both locations), but because the bulb was brighter at the art house and the screen’s masking matched the aspect ratio of the film. In short, what mattered was the care behind the presentation, not the technical substrate of the image.

And that’s the problem with the way we have been thinking about digital projection. Digital projection is not (or not only) a crisis of form, it is a conflict between two value systems: corporate and cinephilic. Although these film cultures are interrelated and both undoubtedly commercial, they are not bound to the same fiscal imperatives or ideals, and it is that very variation that is under threat. Through its VPF agreements, the Digital Cinemas Initiatives would bind the current, diverse modes of cinema to its corporate model. The DCI established its technical standards based on Hollywood’s blockbuster economy and aesthetics. VPF agreements impose that standard on exhibitors who must go digital to have access to any kind of movies, but are not necessarily interested in the kinds of high-contrast, effects-laden blockbusters those standards serve. Many independent and nonprofit theaters need VPF agreements to convert to digital projection, but VPF agreements are not made in their interest and can lock them into programming commitments they would not otherwise make. These agreements also make it harder for independent distributors to turn a profit on experimental or international titles, since they must now pay VPF fees to exhibitors bound by those contracts. In essence, independent distributors will have to rent screen space from studio distributors, regardless of who technically owns the screen. To avoid signing to a VPF agreement, nonprofit theaters such as the Avalon need generous donations from their communities; they need viewers to invest in the autonomy of their programmers. They must become community theaters in the fullest sense—not only run by community organizers or dedicated to serving community interests, but fiscally sustained by charitable contributions from the neighborhood.

Neighborhood-supported cinema has long been among fiction film’s most treasured fantasies. From The Last Picture Show (1971) to Be Kind, Rewind (2008), films have imagined the ways they create and sustain communities and communities fight to sustain them. This has been a convenient fiction that often bears little to no relation to actual audiences practices. Case in point: As much as I identify with my local art house, I spend a lot more time home alone with a DVD. But now our sentimental fictions conflict with our economic reality, and we must react accordingly: Either buy in or watch the independent theater bow out. Cinema is not only an experience; it is also a business. When we consider digital conversion purely as an aesthetic issue, we lose sight of the value systems that undergird our experiences of motion picture projection. Regardless of whether you think digital cinema looks or sounds different, the biggest differences are ones you cannot see or hear.

CAETLIN BENSON-ALLOTT is the author of Killer Tapes and Shattered Screens: Video Spectatorship from VHS to File Sharing (University of California Press, 2013).