28 CFR Part 36 Nondiscrimination on the Basis of Disability by Public Accommodations - Movie Theaters; Movie Captioning and Audio Description Final Rule

B. Digital Conversion of Movie Theater Auditoriums

To accommodate the motion picture industry's shift to the distribution of movies in digital format, movie theaters across the nation have rapidly transformed and have now nearly completed conversion of their auditoriums to digital projection systems. These systems consist primarily of a digital server and a digital projector and typically cost around $60,000 to $150,000 per auditorium. See Helen Alexander & Rhys Blakely, The Triumph of Digital Will Be the Death of Many Movies, New Republic (Sep. 12, 2014), available at http://www.newrepublic.com/​article/​119431/​how-digital-cinema-took-over-35mm-film (last visited Sept. 12, 2016). This transition to digital projection systems has accelerated exponentially since 2008 when the Department first sought public comment about whether it should engage in rulemaking. At that time, the information provided to the Department through public comment indicated that only 5,000 of the 38,794 auditoriums ^[9] (13 percent) had been converted to digital. See Advance Notice of Proposed Rulemaking, Nondiscrimination of the Basis of Disability; Movie Captioning and Video Description, 75 FR 43467, 43473 (July 26, 2010). Based on data from July 2015 that NATO provided to the Department, the Department estimates that more than 98 percent of indoor movie auditoriums (or 38,688 auditoriums) in the United States have been converted to digital, leaving only approximately 650 indoor analog projection systems.^[10]

As digital technology has advanced, the number of small movie theaters and those showing analog movies has also declined. From 2010 to 2014, single-auditorium movie theaters and those with up to seven auditoriums declined by approximately 25 percent while the number of movie theaters with eight or more auditoriums increased. See Motion Picture Association of America (MPAA), Theatrical Market Statistics 2014, at 25 (2014), available at http://www.mpaa.org/​wp-content/​uploads/​2015/​03/​MPAA-Theatrical-Market-Statistics-2014.pdf (last visited Sept. 12, 2016). Moreover, the number of analog auditoriums declined by more than 92% during that same time period. See id. While small, independent movie theaters have been the slowest to convert to digital technology, the Department, consistent with industry projections, anticipates that the vast majority of the remaining analog movie theaters will either convert to digital projection systems, or be forced to close because of antiquated equipment and the decline in the availability of first-run movies in analog format. See Lyndsey Hewitt, Local Theaters Face Tough Times as 35 mm Faces Extinction, Williamsport Sun Gazette (July 11, 2013), available at http://www.sungazette.com/​page/​content.detail/​id/​594504/​Local-Theaters-Face-Tough-Times-as-35-mm-faces-extinction.html?​nav=​5016 (last visited Sept. 12, 2016); see also Colin Covert, Final Reel Plays Amid Digital Conversion, Star Tribune (Aug. 27, 2012), available at http://www.startribune.com/​final-reel-plays-amid-digital-conversion/​167253335/​ (last visited Sept. 12, 2016); Krista Langlois, As Analog Film Grows Obsolete, Western Towns Struggle to Keep Theaters Afloat, High Country News (Jan. 10, 2014), available at http://www.hcn.org/​blogs/​goat/​as-film-grows-obsolete-western-towns-struggle-to-keep-their-theaters-open (last visited Sept. 12, 2016).

9. Although the movie industry refers to “auditoriums” as “screens” throughout its commentary, the Department believes that “auditoriums” is more accurate. Therefore, the Department refers to “auditoriums” throughout this rule.

10. The remaining venues showing movies using analog projection systems are found at drive-in movie theaters, which are not subject to the requirements of the final rule.