Keeping up in a digital age: Palace plans high tech upgrades

November 2011 Posted in Business

By Omie DrawhornArtist\'s rendering of the Palace Theater\'s marquee in Silverton

When the Palace Theater opened in downtown Silverton in 1936, it was designed as a state of the art facility, offering the ultimate in entertainment quality.

Over the years, the downtown fixture has undergone a variety of improvements to bring the latest technology and quality to the Silverton big screen.

Now, well into a new century, the Palace will receive another facelift to bring it up to speed with surrounding theaters. The Palace is going digital.

Stu Rasmussen, owner of the movie theater along with business partner Roger Paulson, said Silverton’s movie theater will undergo the conversion sometime in early 2012.

Exactly when that will happen depends on the availability of equipment.

Paulson and Rasmussen have owned the theater since 1974.

Rasmussen said the transition will likely cost close to $100,000, and the two are using their retirement savings to make it happen.

“We made an emotional decision rather than logical decision,” he said.

Rasmussen said he sees this as making an investment in Silverton. With his background in sound and production engineering, he is hoping to cut costs by doing a large portion of the work himself.

Digital cinema means that instead of using a 35mm film, the movie is on a computer hard drive.

This means greatly reduced production, shipping, and labor expense. Digital also means clearer picture quality: there is no film to wear out and scratch.

The conversion to digital means access to more first run movies, greater variety, as well as movies in 3D. All theaters must convert by 2013, but most theaters in the area have already made the digital jump, which means fewer options for movies to show.

This left the Palace owners with the option of either making the conversion or closing the theater.

“The logical decision would be to give it up. There are movies close by in Salem, but Silverton needs a movie theater,” Rasmussen said.

This affects the kind of movies that they can bring to Silverton. The Palace often gets movies after they play at other theaters, after demand to see them goes down. With digital, the theater will have more options.

“The major theaters around us in Portland and Salem are digital,” Rasmussen said.

“At major theaters, when movies first open, the demand is high so they play on multiple screens, after demand dies down, that movie becomes available to other theaters,” he said.

Film companies charge a percentage of ticket price for the film. Now it will be less costly to bring that movie to Silverton.

Thirty-five millimeter film is also more expensive to produce and ship, as it is a 60 to 80 pound box of film. “It’s less expensive for film companies to give movies to us on digital,” Rasmussen said.

It has been a bad time to be in the theater business, he said. Because of the economy, the Palace has been in a no-profit situation for two years. He’s hoping that will change.

“We needed to do this to stay in the business,” he said. “We may be foolish, but time will tell.”

Rasmussen said the first part of the conversion will cost around $60,000 and adding in 3D capabilities will cost another $25,000.

He said the transition to digital should be seamless and it is possible the Palace will not have to close at all to make the conversion happen. While the change is in the works, the Palace will still be able to run the 35mm film that movies currently play on.

He said the whole transition should take around 10 days. To offset the costs, Rasmussen said the Palace will have to raise ticket prices.

Ticket prices will go up between $1 and $2 and snack bar prices will likely go up as well. This might pay back his investment over a three- to four-year period, he said. Rasmussen added he is still crunching numbers and as of now, doesn’t know the exact increase. Prices will also be based on the distributors’ minimum price for bringing a movie to Silverton.

Regardless, he predicts it will still a bargain compared to the $11-12 it costs to see a movie in Salem.
Rasmussen said he has received an overwhelmingly positive response from Silverton residents about the conversion and ticket prices.

He is giving theatergoers an opportunity to “lock in” the current $4 “bargain” price at the Palace, with a special “Golden 25” Palace Prepaid punch card which will sell for $100 each.

Customers get the current $4 “bargain” price into the digital future if they buy 25 admissions in advance before Dec. 24.

The cards will be good for any time, any show.

The cards are available now at the theater, 200 N. Water St. during open hours, at Zebra Print, 417 N. Water St. on weekdays or by mail to the Zebra Print address.

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