An Exclusive Conversation with Rob Kurrus Premiere Theatres Rob Kurrus is owner of Premiere Theatres Oaks 10 in Melbourne Florida. He has 20 years experience in the exhibition industry starting as an assistant manager two decades ago at the old Cobb Theatre which was located in the Oaks Plaza in Melbourne. Regal Cinemas bought out Cobb Theatres in 1997 and Kurrus continued his success with Regal being promoted to vice president of information technology. In 2002 Kurrus learned that Regal Cinema had plans to close its Melbourne Theater located at the Oaks Plaza and took over the location as an independent theatre owner. He has owned and operated Premiere Theatres for over five years and in 2006 he transitioned the Premiere Theatres Oaks 10 into the first movie theatre in the world with Dolby Digital Cinema systems in every auditorium. In an exclusive conversation with Digital Cinema Report Kurrus discusses his experiences with digital technology and compares the competing 3D systems. Digital Cinema Report: How many theatres are there in your chain? RK: One theatre - Premiere Theatres Oaks Stadium 10. DCR: How many screens? RK: Ten. DCR: Of the total number of screens how many currently have digital technology? RK: All screens are digital. Premiere Theatres was the first exhibitor to install Dolby Digital Cinema in every auditorium. DCR: Is this for pre-show for features or both? RK: We use the same digital cinema system for both pre-show and feature presentations. This was the most cost effective solution. DCR: How difficult has it been to train your employees in how to use digital technology? RK: We found it is far easier to train our employees to manage the projection duties and complete repairs with the digital technology. DCR: Have you experienced any technology breakdowns? If yes describe what happened. RK: There have been some issues over the past few years which is to be expected when implementing a new technology. However I think that our booth operation is still far more consistent than with 35mm. The bottom line is that the repairs and maintenance expense on our P&L is still far lower than it was when we were keeping our 35mm projectors running. DCR: Of the total number of digital screens how many have 3D capability? RK: Seven of our screens in the complex are capable of running 3D. DCR: To date has 3D increased your revenue? RK: Without a doubt! Just like digital surround sound and stadium seating – we put one in and then realized we need one in every auditorium. If people don't add 3D screens they are going to miss out on a lot of revenue going forward. I’m going to put 3D on every screen. DCR: What has been the average increase? RK: We stopped booking a second 2D screen last year because the demand for 3D was so overwhelming. Now we simply add additional 3D screens. Prior to beginning this practice our 3D gross was typically three times that of the 2D. Even that number can be misleading because people would buy 2D tickets when the 3D presentation was sold out. DCR: What are your patrons saying about the 3D experience? RK: Wow! DCR: What are your employees saying about 3D? RK: Much like our patrons the employees eagerly await all new 3D releases. DCR: I understand that you currently use both Dolby and RealD 3D systems. RK: Yes; we have one RealD and six Dolby 3D systems. DCR: What prompted the decision to work with both manufacturers? RK: We were one of the first 79 locations installed by RealD. We knew right away that we needed more screens. When Dolby introduced their system it was a difficult decision to determine how to proceed. The decision to go with Dolby 3D on the majority of the screens was 100 percent a business decision. A lot of people haven’t really done the math. They are looking at what is easiest instead of what is best financially. DCR: From your experience at Premiere Theatres how do the two systems compare? RK: We’ve analyzed our return on investment in great detail. We compared the results show by show; figured in our capital and operational expenses labor costs glasses handling studio charges everything. Choosing Dolby works out mathematically. What I found most appealing about the Dolby 3D system was that we own the Dolby 3D system outright. In addition Premiere Theatres wants to give the best viewing experience to our patrons. While the business case alone for Dolby 3D is persuasive the fact that you don’t need to install a silver screen gives us the flexibility to playback 2D movies on our standard white screen without compromising image quality issues related to silver screens. DCR: Will you continue to work with both systems? RK: Entry-level costs for the two 3D systems are about the same. But after that you’re ahead with Dolby. I feel the reusable Dolby 3D glasses are a big advantage. A one time investment the durable glasses typically can be reused hundreds of times bring down the cost per screening significantly. The biggest question at this moment is whether or not the studios will continue to supply glasses for the RealD system. If not it could get very expensive for us exhibitors.