A long-standing movie theater chain in the Midwest is leading the industry with the latest technology straight from Hollywood.

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The way moviegoers see the latest blockbusters from Hollywood is changing, according to Michael Patrick, chairman, president, and CEO of Carmike Cinemas, Inc. And this Georgia-based movie theater chain is leading the way.

Michael Patrick, Chairman, President, and CEO

“This equipment had never been used before; we were still testing it as we went along,” said Patrick. “There is going to be a huge learning curve for the industry to adopt this new technology, and we’re proud to be on the cutting edge.” Patrick remembers working in the industry during a similar technological shift: the switch to color after 1965. At that point, he was in college and working at Martin Theaters, the chain his father ran. Patrick continued working there after the chain was sold to Fuqua Industries and eventually bought it back in 1982.

Since then, Patrick has built Carmike into an empire. As national chains sought larger markets on the coasts, Carmike snapped up the abandoned locations and filled the void in the Midwest. Today, Carmike has 264 theaters in 36 states, or 2,349 screens, serving millions of viewers every year. The company primarily focuses on underserved markets with a population of 100,000 or less.

Patrick emphasized that although the industry is undergoing a tremendous shift, the challenges Carmike faces today are the ones it has been dealing with for years. For instance, the company can’t think of its customers as its own, but rather consumers of a specific movie. Every week, when a new movie is released, the company has to adjust its marketing and services to accommodate because patrons going to see a romantic comedy are not necessarily the same type of patrons that will see the latest horror film.

Further complicating matters is the wide geographic area the company covers. Patrick explained that certain films are more popular in some areas, so the company must be careful to target specific theaters for each movie. And because Carmike recently started showing sporting events, those need to be tailored to the location as well.

These complications go to show how far the industry has come. “I started back when we had a couple dozen single-screen and drive-ins, and now we’re showing 3D blockbusters on thousands of screens across the country. It’s an exciting time to be in this industry,” said Patrick proudly.

Behind the scenes
Many of Carmike’s 6,800 employees share Patrick’s enthusiasm because most of them have been in the industry just as long. The company’s COO started as a doorman in 1975, and Patrick said he went to high school and college with Carmike’s general counsel. He added proudly that if you live in the Midwest and like the movie business, you work for Carmike.

“It’s unique these days to find a company with people that have worked together for 30 or 40 years,” Patrick said. “When you work with the same people for that long, you get a smooth operation; you just know how everyone operates.”

He explained that Carmike employees know what is expected of them based on quarterly goals, how their performance will be measured, and when they have or haven’t met those goals. Patrick emphasized the team-oriented culture that comes from such a smooth operation: everyone understands his or her role in the larger picture and how they can work together to succeed.

That’s a comforting atmosphere to work in, considering the recent trouble in other industries that dominate the area, such as agriculture and manufacturing. Patrick said the employees screen movies after work before they open for the public, and that few other jobs in small-town America allow people to deal with and talk about Hollywood every day.

Like any other industry, the theater business has had its ups and downs. Attendance at theaters across the country has decreased or remained flat for nearly five years, hovering around 1.4 billion tickets sold annually. Compare that to ticket sales from before TV became a household staple, when US theaters sold 3 billion tickets each year. The quality of TV viewing has only improved since then, and the rise of piracy and of home delivery services like Netflix are more challenges to movie theaters everywhere.

Patrick said that large national chains have been closing up administrative offices and theaters in much of the middle of the country. He views Carmike as an anchor in the region, picking up and building a better regional infrastructure than the other chains left behind.

“I’ve been doing this all my life, and we’ll be here through good and bad days,” said Patrick. “It’s been tough for some movie exhibitors the last 25 years, but the future of the industry is bright.”

Feature presentation
The future he is referring to are the digital and 3D movies that will be coming to theaters more often in the next few years. First debuting in the 1950s, 3D movies were a stunt the studios used to draw people away from the television. Its re-emergence comes in response to an even more widely diversified entertainment field but without the unfortunate 1950s side effects of nausea and headaches.

Today, 3D movies are filmed the same way: with two cameras capturing parallel images for the left and right eyes of the viewers. The difference lies in how the images are projected: much faster now at 144 frames per second and much smoother through the use of the triple flash technique, which shows each frame three times and results in less nausea.

Production studios will save millions of dollars each year by switching to digital and digital distribution: they spend up to $1,500 printing a copy of each movie to send to every theater that will be showing it in the country. Furthermore, 3D films warrant higher ticket prices and can’t be easily replicated at a home theater or bootlegged, driving people back to the theaters.

Right now, there are several companies providing the infrastructure to show digital movies. But Patrick said Dolby Labs is rapidly becoming the favorite. Its digital micro mirror device, invented in the mid-1980s, is a microchip made up of millions of mirrors fixed to hinges that turn to reflect light. In a movie theater, these chips can create 35 trillion different colors, and they prevent the degradation of quality that results from wear and tear on 35-millimeter films.

The huge expenses associated with upgrading to digital and 3D projection equipment have dampened some theater chains’ enthusiasm: digital equipment can cost tens of thousands of dollars, and 3D installation can cost another $50,000.

But, in 2005, the major Hollywood studios established specific guidelines for producing and showing digital and 3D movies. Carmike was among the first to be certified. Through virtual print fees paid by the studios, Carmike was able to subsidize the cost of its digital installation. Such an arrangement is proving to be more difficult for other chains.

Several major studios have signed contracts to produce digital and 3D movies over the next 10 years. Pixar and Disney plan to release only 3D movies after November, and Dreamworks is not far behind, with several releases slated for 2009. Hollywood heavyweights like Steven Spielberg, George Lucas, James Cameron, and Peter Jackson all have 3D projects in the works.

“Animated movies will be the first to switch over, and, once they do, they won’t go back. And once those studios get going, other ones will catch up, and I’d say after 2010, digital movies certainly, but also 3D movies, will be common practice,” Patrick said.

All of Carmike’s digital projection equipment was installed during the past two years, and Patrick reported the feedback from customers has been positive. He said the company receives movies from studios on a mobile hard-drive, and it is currently testing satellite delivery. The future holds further developments, such as streaming live 3D footage from concerts or sporting events to the theaters.

“It’s exceedingly challenging to move the amount of information that kind of display requires via satellite. Right now it takes 10 hours to download the average movie, so live footage is still a while off,” said Patrick. “But this is where the industry is headed.

” Major electronics companies like Samsung, Mitsubishi, and Philips, among others, want a piece of the action as well; competition from TV is not going to leave movie theaters alone anytime soon. It will be challenging to reproduce in a living room the immersion experience larger screens at movie theaters allow, which is what the studios are banking on and hoping theater chains will support. So although the latest technology may be coming to a theater, or TV, near you, for the moment, a Carmike theater is the best place to find it.