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The DFS Digital Conversion

Or, how The Big Lebowski and Kickstarter tied the ribbons for the Denver film community

By Richard J. Schneider

The United States is inches away from going metric, or so the joke goes. Remember when we were all going to do everything in grams, liters, meters, and centigrade? Well, we never made it, except for maybe track and field and a few references to drug busts. Doubtful we ever will, stubborn as we are. Not so, however, for the film conversion from celluloid to digital. Optical film projectors have just about gone the way of the Dodo Bird. Even though many of us have trouble spotting the difference, most of the flicks we see in theaters, are digital projections. No more of this light through the film stuff.

The transition from optical to digital projection has not been all that easy. Nor has it been cheap. Just ask the Denver Film Society, which recently closed a highly successful Kickstarter campaign to raise half of the 300 grand it needed to switch from the old celluloid projection systems to digital. And while the celluloid-digital conversions in the major theaters – the ones that charge you 25 bucks for a soda and a bag of popcorn – were heavily subsidized by the big Hollywood studios, the smaller venues and nonprofits, like DFS, were not. They had to find the conversion money themselves, or go out of business.

Digital movies: a sordid tale

In a way the conversion tale is a sordid one, typical of how one branch of corporate gigantism strokes another, in his case the bulbous Hollywood studios – Sony, Universal, Fox, Paramount, Disney, et al. – and the major theater screen outfits like Regal, AMC, and Cinemark. Left in the dust were the art houses, the nonprofits, the second run theaters, and the drive-ins. The Denver Film Society was confronted by the rising tide of conversion.

“The whole industry's going digital” said Ryan Oestreich, director of the DFS’ Sie FilmCenter during a recent interview. “It started with the big Hollywood films. Basically Hollywood is starting to shoot with 4-K cameras, so it’s shooting in digital. It's doing all its CGI in digital.” Even though film houses had been successfully using 35 millimeter for a century, the trend was to distribute digitally since each “film” was being shot with digital cameras in the first place.  The tech-heads liked the idea of distributing films on hard drives. The bean-counters saw savings on the accounting books, big ones. Run the numbers. Oestreich pointed out that the studios were replacing $1,500 film prints with little hard drives costing a few hundred dollars. Say the savings was $1,000 per print. Multiply that times the numbers of movies produced and distributed, times the number of theater screens, and, well, the number gets pretty hefty, into the billions of dollars over a relatively short period of time. “However, the problem was ten years ago when they wanted to start pushing digital, the projectors were astronomical” in price,” Oestreich said.

“The projectors were $200,000 apiece,” he pointed out. Again, run the numbers. 10,000 screens (more than that, really), at two hundred thou – that totals up into a couple of billion bucks. “You can't ask your vendors, the people who are making you that money, to incur that kind of cost.” So the movie industry and the theater industry just kicked the can down the road for a few more years, until the costs of the projectors came down. When that happened, Oestreich said, “they basically made it mandatory. They said, okay, you all are going digital or you are going out of business.” The “they” were the Hollywood mega-studios.

Enter the DCP and the VPF

Here is where the DCP and the VPF came into play. The DCP is the new “film print” – the Digital Cinema Package, basically a digital copy of a film on a small hard drive. The VPF stands for Virtual Print Fee, and that is how Big Hollywood subsidizes the projector conversion for Big Theaters. The fee is not, as the casual observe might assume, paid by the theater to the studio, but the other way around. The VPF is paid to the theaters each time one of Big Hollywood’s film is screened. The VPF, then, becomes cash flow to the theaters to repay their investment in the conversion from celluloid to digital projection systems. There is a catch. There is always a catch. To get the studio’s VPF, and thereby finance the celluloid-digital conversion, the theater must play the studio’s films, dogs and all.

“Well, that doesn't work for anybody like the Denver Film Society,” Oestreich said. “Independents like us, non-profits like us, who aren't only playing Hollywood stuff, we cannot do the Virtual Print Fee. So now, here's where we’re at. We need to buy these projectors. We're on our own to raise the entire amount of funds, and if we don't do it, we'll go out of business. Plain and simple. We want to remain in business. We want to keep programming our films. We have our mission to serve to the public. We have to convert.”

The DFS waited as long as it could to convert, for two reasons: first, Oestreich said, they were not sure just how fast the distribution conversion would be and, second, they were not sure how their patrons would react to digital movies. The conversion turned out to be very fast. “Distributors sent a letter (in January 2013) saying December 2013 is the last 35 millimeter print we're ever going to make, so if you haven't converted by then you're out of business,” he said. And, in the end, the majority of the DFS audiences cannot tell the difference between an optical projection and a digital one, or, at least they said nothing about it, he added, except for a few “cinefiles.” Also, it was not going to be all celluloid until December 31 of this year and then all digital thereafter. The studios accelerated their digital-celluloid mix during 2013, Oestreich said, noting that the mix was already 70 per cent digital to 30 per cent celluloid by this summer, increasing the pressure on the independent theaters to convert quickly.

DFS turns to Kickstarter

The film society was faced with a $300,000 conversion expenditure, the budget for which needed to be pulled together rather quickly. This is right after the DFS had tapped all its major donors for big money to buy the building it is now in. For obvious reasons, going back to that same well for another big chunk of dough so soon was, to say the least, a bit of a fund-raising stretch. So DFS turned to Kickstarter. The plan was to raise half the conversion budget, $150,000. Oestreich said DFS already had raised about $75,000 internally, and felt that through its grant relationships could come up with another $75,000. But how do you mount a Kickstarter campaign to raise the needed other half?

“You just don’t start a Kickstarter,” Oestreich said. “We started researching Kickstarter in January.” They looked at what some other art houses were doing with Kickstarter to save their theaters, looked at the DFS Facebook and Twitter follower lists, their email and patron lists, and compared them with the lists for other theaters and then analyzed how many of the people on those lists responded with donations. They studied tactics used in other Kickstarter campaigns, and eventually developed the plans for the DFS Kickstarter effort.

“Kickstarter is not about big donors,” Oestreich said. “Kickstarter is about five dollars, ten dollars. We have not asked our members and our general patrons for money to help us with our new building. If you think about it, you can own a house but if you can't turn the lights on what's the point of owning the house? For us we saw this as a way that we could finally message to our larger community that we need your help. We're facing a dire situation. You know us. You love us. We are nonprofit. You’re the ones that can help us and if you do it collectively, together, and 2,200 people did. It was amazing.”

A ton of work and THE BIG LEBOWSKI

The effort included months of research, developing the campaign, writing the copy, making the video, making lists of key people who could help “push” the campaign through social media, and THE BIG LEBOWSKI. In a deft move, the DFS tied the fund-raising campaign into the popular DFS Film on the Rocks program at Denver’s Red Rocks. This year’s screening (July 31) at the popular outdoor venue is the Coen Brothers-Jeff Bridges classic film. Kickstarter patrons were coaxed to donate $25 in return for one ticket to the Bridges film. Oestreich said the DFS messaging pointed out that the digital projectors were going to help with the Film on the Rocks presentations, the Starz Denver Film Festival, and the Sie FilmCenter. “We married all of our brands together into one umbrella, which is the Denver Film Society. We were able to finally communicate to people we're a nonprofit; we don't make a lot of money, and if you help us, we can stay in business. DFS “pressed the go button” on May 28th for Kickstarter, and a month later had raised the needed $150,000.

“Literally, we had a one dollar donation to a $5,000 donation,” Due said. “The average donor was $86. It really was about the community. It was about that population of film goers who care about these brands and these programs.” So far, DFS has acquired two Digital Cinema Projectors from Christie Digital Systems. Two others will be purchased in the near future. And just to be safe, the Sie FilmCenter has hung onto its 35 millimeter projector, as well as the other film projectors (like 16mm) it has upstairs in the projection area. But the digital systems are here, and now.

Denver novelist and long-time video producer/writer Richard J. Schneider writes occasionally for the CFVA. His latest mystery novel, set in Colorado, is WATER: A Vic Bengston Investigation.