Panida prepares for digital movie conversion

SANDPOINT — The Panida Theater’s love affair with film goes back 85 years, to a time when the first audiences sat hushed as the lights dimmed and stories appeared as if by magic on the movie screen.

Although local legend sometimes states that the grand old downtown dame first opened as a vaudeville house, this was never the case. The place was — first and foremost — a movie theater. And although it has branched out considerably since the community saved it from demolition in the mid-1980s, films have been the economic mainstay and a primary revenue source for the Panida.

According to board chairman Erik Daarstad — an Academy Award-winning filmmaker in his own right — the theater figured things would stay that way through most of this decade. They were surprised, then, when the major movie studios and the distributors who send out their films announced recently that the big spools of celluloid that have become a truly American icon were about to go the way of the silent movie.

“Since the digital age started a decade ago, we have known that there would eventually be a conversion to show movies digitally in theaters, instead of on the 35-millimeter film used over the last century or so,” Daarstad said. “It just happened faster than anyone realized.”

“We knew it was coming,” said Karen Bowers, the theater’s executive director. “We just didn’t know it was right around the corner.”

Traditional industry wisdom had placed the conversion timetable at somewhere between 2015-2018. But with China, India and major European nations opting to make the move much sooner, the studios realized how much money could be saved by scooting the timeline up by several years. Rather than making expensive 35-millimeter prints, which can cost up to $2,500 each and have to be shipped in heavy boxes to more than 3,000 theaters in the U.S. alone, the industry shifted to storing the movies on small, encrypted hard drives.

The new technology prevents movie piracy while giving the studios ultimate control over how many times a feature can be shown before the hard drive locks it up. Additionally, the move drives down duplication to shipping costs. Which is all well and good for the movie moguls, but a very different story for the theaters involved. Multi-screen complexes have the backing of the corporations behind them to get the job done. For independent theaters such as the Panida, the changeover means cranking up the grant-writing and fundraising machine yet another time.

“The cost of converting to a full theater digital projection system at this time would be about $70,000,” said Daarstad. “There are less than 300 single-screen movie theaters like the Panida left in the U.S., and for all these theaters, the conversion is a tremendous financial challenge.”

“It’s already pushing some of the little, independent theaters like ours out of business,” Bowers added.

If showing movies wasn’t such a moneymaker for the theater, the answer might be to simply focus more directly on the busy schedule of rentals to make up the difference. Bowers, however, said that would punch too big a hole in the Panida’s finances.

“We get almost 40 percent of our revenue from showing films,” she pointed out. “It’s the largest single contributor to our income.”

Where movies are concerned, the Panida has become a prisoner of its own success. For more than half a century, the theater fired up the original carbon arc projectors, using them to fill the screen from 1927 up to at least the 1960s. When the community purchased the historic building after it was boarded up in the early 1980s, a pair of 16-millimeter projectors was installed to keep the connection with film alive, if not exactly thriving, due to the limited number releases available in that format.

When Daarstad joined the theater’s board of directors, he lobbied for and eventually helped procure a pair of refurbished 35-millimeter projectors.

“That was back in about 2002,” he said. “We raised $25,000 and bought a pair couple of older Simplex projectors. They had been used for years in the screening room of the William Morris Talent Agency in Hollywood before they found new life in the Panida.”

That was a turning point for theater revenue, as audiences responded enthusiastically to improvements in the screen image and sound quality. Bowers — who holds a film degree from UCLA — responded by increasing the scope of the Panida’s foreign film series and bringing in a much-expanded assortment of major studio titles. Still, the executive director and the board saw what was approaching on the digital horizon and invested in a disc-based digital projector, thanks to a grant from the local Confidence Foundation, as a bridge strategy to full digital conversion.

Now that the studios have forced their hand, crossing that river has become a more immediate concern. As some small theaters have learned the hard way, the choice is stark: Convert or die.

At this critical point in its history, the Panida could be said to find itself traveling in two directions at once. At the very moment that technology is driving forward momentum on the inside, the theater’s exterior has just completed a dramatic and attractive step back into its past. Last summer and fall, using funding from the Sandpoint Urban Renewal Agency, windows and doors were refurbished, exterior walls were stuccoed and the marquee was repaired, cleaned and painted.

“She was so tired and drab-looking,” Bowers said. “Now she’s beautiful again.”

“The theater now looks great,” Daarstad agreed. “But high-tech is catching up with us.”

The board chairman and executive director have reason to be optimistic about the prospects for fundraising success based on resounding support for past efforts to upgrade the Panida. Just as encouraging is the fierce loyalty of movie fans, who often forego the chance to see a new feature film at a “first-run” theater in order to view it a few weeks later as part of what Bowers calls “the Panida experience.”

One might expect these film buffs to bemoan the transition from the skill it takes to thread a movie reel through gears and sprockets to the mundane task of plugging in a hard drive, but they have their eyes on the big picture — the one that shows up on the big screen.

“There is just something about film,” said Bowers. “And the old projection system has always been part of showing a film, so there’s a romance to it. But cinema itself is still continuing and I focus more on that.”

“It is the end of an era, because we’ve lived with film all our lives,” Daarstad said. “A good story is still a good story, though, no matter how it gets shown.”