Illustration by Thomas James

WE'RE LUCKY. Portland is crammed with movie theaters, and a blessed number offer a holy trinity: beer, pizza, and cheap film.

While many of Portland's movie houses are operated by the national chain Regal Entertainment Group, our scene is buoyed by independents: Cinema 21. The Roseway. Second-run (or sub-run) theaters like the Laurelhurst and the Academy, and McMenamins joints like the Kennedy School, the Bagdad, and the Mission. There's the Northwest Film Center and Cinema Project. The Hollywood Theatre and the Clinton St. Theater. And that's not even all of 'em.

But just as it has with everything else on the planet, the digital revolution is changing film. Studios are moving away from 35mm film prints—which can cost thousands of dollars to produce and small fortunes to ship—in favor of more profitable digital distribution and 3D presentations. And while theater chains have been replacing their 35mm projectors with digital ones, independent theaters have been backed into a corner.

THE PERFECT STORM

"Let's talk about the three major theater chains, being Regal, AMC, and Cinemark," says Scott Hicks. "All three of those chains are aggressively converting every single screen to digital." Hicks would know: He's been in the movie theater business since the early '70s, and currently runs American Cinema Equipment, a Portland-based company that sells and repairs machines used by both independent and chain theaters.

Robbie Arrington, the marketing manager for Regal Entertainment Group, spoke to me from Regal's headquarters in Knoxville, Tennessee. He says Regal's current plans are for "85, 90 percent" of their projectors to go digital; by the end of 2012, "everything that's gonna switch will be switched." He thinks some 35mm projectors will hang around: "There are a lot of independent films that just won't come out in digital," he says. "Especially downtown [in Portland]. We work with the [Portland International] Film Festival, and there are some of those obscure films that are only available in 35. So I think there'll be some need for a few [35mm projectors] for the next two, three, four years."

Still, that's a sea change—and since companies like Regal control a huge chunk of the roughly 40,000 movie screens in the country, their decision to go digital affects everybody.

"When a very high percentage of the revenue to Hollywood comes from digital," says Hicks, "Hollywood has very little interest in producing film prints for the remaining independents and smaller chains."

Demand for 35mm has already plummeted. In March, Technicolor's Hollywood film lab closed its doors, leaving only one major company, Deluxe, to churn out the industry's increasingly rare prints. "If there are no first-run prints coming into the Portland market for the major chains," Hicks asks, "where do the sub-run theaters get their prints?"

The short answer? They won't. "There is no gradual," Hicks says of the transition. "It's either you convert to digital, or you close your theater in a year and a half, or two." Easier said than done, considering the price tags for the high-end projectors the major studios require. For each auditorium, "the conversion typically runs between $50,000 and $60,000," Hicks says. "And then there's the cost of 3D in addition to that."

That's more—a lot more—than most independent theaters can afford. "It's a very scary time," Hicks says. "This conversion to digital will close a large number of screens across the US."

ICE AGE

"People have been talking about the digital transition for a long time," says Tom Ranieri, owner of Cinema 21. "It's kinda like this giant glacier that's moving really slowly, and you just get used to it always being there, always being in the background. And then one day it comes, and it changes the whole landscape."

Ranieri, who recently started leasing a high-end digital projector so he could show Werner Herzog's 3D documentary Cave of Forgotten Dreams, notes that digital projection has opened some doors. "There's some interesting things that are gonna be in 3D that I can play," he says, mentioning Takashi Miike's Hara-Kiri: Death of a Samurai and Wim Wenders' Pina. Even the old guard's joining in: In November, Hugo Cabret will mark Martin Scorsese's first foray into 3D, and a month later, longtime 35mm advocate Steven Spielberg will release his 3D, motion-capture The Adventures of Tintin.

Meanwhile, theaters without digital are noticing changes. "There are films we wanted to play that were only digital," says Prescott Allen, owner of the Laurelhurst Theater, referring to the critically acclaimed, Portland-set mystery Cold Weather. "Cold Weather was only digital," Allen says. "It's an independent film, so it makes sense for them to shoot on digital. It's like you've got two driving forces: you've got the independent studios and filmmakers that are gonna shoot on digital, and then you've got the [big] studios that want things on digital 'cause it'll be cheaper and easier."

The Laurelhurst has also had an increasingly difficult time booking older films. "The studios aren't releasing prints that they used to," Allen says. "We wanted to play The Omega Man, and now it's no longer available. That could be because they've only got two prints [left] and they're really bad, so they don't want to risk any more damage, or maybe they just have one good print, and they just want to keep it."

Booking first-run film isn't much easier. "We try to show everything on film," says Seth Sonstein, owner of the Clinton St. Theater. "But with a lot of independent films, they just don't make a print." In other words, how a film is presented is now decided by the distributor. "I'd like to have as much film as possible," Sonstein says, but adds, "You don't have any way to control it."

ADAPTATION

While a few local independent theaters already have at least one high-end digital projector—Cinema 21, the Roseway, the Living Room Theaters—most have some form of digital projection, even if it's not up to Hollywood's spendy standards.

"We're not afraid of technological changes," says Cory Wynne, corporate director of film for McMenamins. "We currently have 35mm, we have high-end LCD projectors, and we're in conversation about how to overhaul and move to a digital landscape."

"We have to switch if we want the movies," says Dannon Dripps, manager of the Academy Theater—even though, "at the moment, we can't exactly afford to change all of our theaters over."

"I think we're good for a couple of years," says Sonstein. "We're not set up for Hollywood digital... we're not gonna spend 50 grand on a projector. So we're pretty much good: We can play anything independent, or anything available old-school, repertory, whatever."

"I would think eventually, [we'll go] all digital," the Laurelhurst's Allen says, but he isn't sure when. "Is it five years, 10 years, 15 years [from now]?"

Dan Halsted, who showed 35mm prints under his Grindhouse Film Festival banner before becoming the Hollywood Theatre's head programmer and technical director, says the Hollywood's considering upgrading its digital projectors—and points out that studios don't seem overly concerned with sub-run theaters' finances.

"Do the studios even care about those theaters?" Halsted asks. "I love the Laurelhurst. I live by there. I go all the time. I don't want to go pay full price at the megaplex and listen to people talk on their cell phones. The studios know that there are tons of us that are like that—where, if those theaters were gone, we probably would occasionally go to the megaplex and pay the crazy prices. I think they're fine with those theaters going away."

TRADING PLACES

It's a tumultuous time for theaters—with slick home entertainment systems and shrinking periods between theatrical and home distribution, the shift to digital is merely one more challenge.

"You have to expand the range of what you're willing to do," says Ranieri, who's had success at Cinema 21 with event-type screenings like The Room. "The real question is, of what interest is it to younger audiences whether they become involved in art film or specialty film or alternative film? I don't think that they particularly care whether they see it in a movie theater, or whether they watch it some other way—VOD or Netflix or whatever. But I think what younger audiences definitely want are events."

"We love 35mm film. Everyone does. But it doesn't make sense in a digital era," Wynne says. "What does make sense, and what McMenamins is focused on, is providing event venues. The most important thing for us is to create exciting, content-driven events.... I don't think the format matters. I think the venues and the events are the driving force."

LOVE AND DEATH

While 35mm might be doomed to obsolescence, it's already missed. "I don't imagine we're going to completely get rid all of our 35mm projectors," Dripps says of the Academy. "There's definitely an aesthetic to it that I think some people will still seek out. The way I think about it is like listening to music: While I love my iPod, and it makes total sense to put all my music on there, I still love collecting and listening to records."

"The demise of film, I think, is a little bit exaggerated," says Sonstein. "There's so much film out there! There are companies with giant libraries of film. As long as there are places like the Clinton and the Hollywood and Cinema 21, it's gonna be all right."

Maybe at some point, seeing a film on 35mm will be an event in and of itself—and a reason to visit the independent theaters that are still in business. "I do think film will become a niche after digital's been the standard for a while," says Halsted. "I think there'll be another chance for independent theaters. It'll probably give Cinema 21 and the Hollywood a little bit of a leg up to still have the dual-projector setup, where we can run [both]. 'Cause they probably will strike some repertory prints, and it'll be a, like, a big deal. People will be like, 'Holy shit! It's on film. I remember that from a long time ago.'"