Last updated: February 16. 2013 4:36PM - 86 Views

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MINNEAPOLIS -- For much of the 20th century, going to the movies meant walking to a single-screen neighborhood theater, where the light from a projector passed through strips of celluloid. Jeffrey Eisentraut loved that so much when he was growing up that he eventually moved to Southern Illinois to run three historic theaters. But now Eisentraut and other independent operators are under siege.

The movie studios are rapidly replacing reels of celluloid film with hard drives that are cheaper for them to ship and compatible with lucrative 3-D technology. Hollywood says the digital conversion will benefit moviegoers with consistently bright images and state-of-the-art sound. But in the next few months, exhibitors who don't purchase expensive digital projectors may be forced out of business.

Movie-theater owners have invested in many upgrades, from stereo sound to stadium seating, even while losing large portions of their audience to television, home video and the Internet. But the cost of the digital conversion is unprecedented: about $50,000 per auditorium.

Most of the big theater chains have already converted all their theaters. The Landmark chain of art-house theaters will be completely digital by the end of the year. But smaller operators are checking their bank accounts -- and their calendars.

One pressing deadline is Sept. 30, the last date for exhibitors to join the studios' "virtual print fee," or VPF, program. That program reimburses theater owners if they agree to play a certain number of new digital releases per year. Many operators of single-screen theaters are unable -- or unwilling -- to participate in the program.

That's because studios require multiweek contracts to get the best films. Thus a cinema that doesn't have a second screen to move a fading title and fulfill the contract is penalized.

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