For Small Theaters, the Digital Future Is Dark

When Sanford Hess started running a century-old movie theater two years ago, he knew Hollywood was replacing celluloid with digital files. But since the 250-seat venue in downtown Champaign, Ill., had already endured Betamax, VHS, Netflix, and a 15-year stretch showing porn, he figured it would survive this latest transition. Now he’s not so sure.

The 12-employee business, which had just over $300,000 in revenue in 2011, can’t afford the pricey new projector and other equipment major studios want him to buy. Unless he raises the money to pay for it by October, Hess says he’ll close the theater. Studios are saying, “Small business, you have to spend $70,000 in order to continue to make exactly the same money you do now,” Hess says. “There’s not really going to be any significant efficiency improvements or extra revenue that I can get; it just allows me to stay in business.”