Metro's last outdoor theater beats the odds with digital conversion

  • Article by: KEVIN GILES , Star Tribune
  • Updated: September 7, 2013 - 2:00 PM

State’s five remaining drive-ins are trying to overcome the latest test for a once-thriving summer industry.

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The Vali-Hi Drive-In in Lake Elmo is the last of its kind in the metro area. It went through a digital conversion that could put half of the nation’s outdoor theaters out of business. On a recent evening, owner Bob O’Neil loaded a movie into a computer that is part of the new digital projector he began using in 2012.

Photo: RENÉE JONES SCHNEIDER • reneejones@startribune.com,

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Pretty much every summer night since 1984, Bob O’Neil has operated the projector at his Vali-Hi Drive-In at Lake Elmo, the last surviving outdoor theater in the metro area. For every movie he would splice as many as eight reels of film to show on the giant screen.

Now the Vali-Hi has joined the digital projector age — but at a steep cost — during a time when many of the 368 remaining drive-in theaters in the United States could go dark forever because they can’t afford the new technology.

This fall, mandatory conversions that cost $80,000 or more per screen will force the low-profit outdoor theater industry into the worst financial crisis of its storied existence.

“It’s sure not something you would do other than you have to stay in business,” said O’Neil, who invested $120,000 for his digital conversion and added new speakers and other audio equipment at the 800-vehicle Vali-Hi, the largest outdoor theater in Minnesota. Most small-town drive-ins just don’t have enough customers, he said, to afford the investment before traditional theater film disappears.

The Vali-Hi is the lone survivor among more than three dozen drive-in theaters that operated in the metro area in the heyday of the drive-in, when kids in pajamas watched movies from the family station wagon and teenagers kissed in the twilight.

The final competitor, the Cottage View in Cottage Grove, closed for good last fall. Since the 1970s, urban sprawl and changing consumer habits have killed more than 80 theaters in the metro area.

O’Neil’s family owned three of them — the Flying Cloud in Eden Prairie, the 65 Hi in Blaine and the St. Croix Hilltop near Stillwater on the Wisconsin side of the St. Croix River. He grew up in the drive-in business and has watched a succession of cultural and financial trends such as video stores, indoor megatheaters and on-demand streaming disable an industry known for its nostalgia.

“Now you add the digital projection problem to the list,” O’Neil said. “Nobody really knows at this point how long they’re going to last. It’s a new thing and it’s all electronic, so in 10 years it could be obsolete or not worth fixing anymore.”

One of Minnesota’s other four outdoor theaters — the Sky-Vu in Warren in the state’s northeast corner — installed the digital equipment in June. Two that haven’t — Long Prairie’s Long Drive-In and Luverne’s Verne Drive-In — have appealed to their customers to vote in a national Honda contest in hopes of winning free digital projectors. At the fourth Minnesota outdoor theater — the Starlite 5 in Litchfield — owner Tim Eiler said he hasn’t decided if he will convert to digital.

“I either have to make a huge investment in a business that breaks even or close it down,” said Eiler, who bought the Starlite in 1998 and reopened it after it had been closed 17 years. The cost for converting smaller drive-ins like the Starlite, which has room for about 500 cars, is no cheaper than for the larger ones, he said.

At the Sky-Vu, which Leonard Novak bought 40 years ago, customers have applauded “how much more vivid and clear” digital images appear on an outdoor screen, said his son Tom.

“It was a significant investment,” he said. “When you’re only open five months out of the year like we are, you can imagine what a risky proposition that is.”

For decades, operators of drive-in theaters have relied on shipments of 35-millimeter film, which they spliced and assembled on “platters” in their projection booths to make continuous movies. Even before that, theaters ran two projectors, requiring skillful operators who knew how to blend segments of film to avoid unsightly lapses on the screen.

Digital conversion, O’Neil said, means that by sometime next year, no traditional movie film will be available. The expense of making old film prints weighing 50 to 60 pounds led to the digital era, he said.

Many theater owners have been in denial that the change would ever happen, he said, even though “everyone knew it was coming 10 years ago.”

Unlike traditional film, digital movies come to the Vali-Hi on a hard drive. A computer “key” unlocks each movie, and because of industry concerns over piracy, locks it again after a designated number of showings.

At the Vali-Hi, open seven nights a week May through August and weekends in April and September, digital conversion has improved picture quality substantially, much like a high-definition flat-screen TV compares with an old tube set. O’Neil said that’s the benefit to a costly investment. A powerful 6,500-watt light bulb projects images on the big screen.

“That’s always been a critical issue at a drive-in theater — getting a sharp picture on the screen,” O’Neil said. “Digital has made life a lot easier, but you really miss being in a projection booth and hearing the film running.”

Customers at the Vali-Hi come from all over the metro and greater Minnesota, often filling the theater to capacity. On recent nights, O’Neil said, he has met people from Faribault, Mankato and Sauk Rapids.

Three movies play each night for a total price of $8.50. It’s $1 for children ages 6 to 12 and free for kids 5 and younger.

“I never dreamed I would have the last drive-in in the Twin Cities,” O’Neil said.

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