Alamo Drafthouse Cinema’s Tim Reed made the observation this morning at the most refreshingly frank panel about the problems theaters face that I’ve seen so far at the industry event. He says that execs have ”done a horrible job building a fan base for the movie business over the last two decades.” That’s a problem because “we’re in a battle now…We’re brick and mortar. We’ve see a lot of brick and mortar businesses go down. We have to be nimble and find content that will sell to our base” — including young people to “make them movie-going fans.” He and others on the International Cinema Technology Association’s panel agreed that theaters need to become more aggressive about introducing alternative content including live sports and concerts. “This is the year for satellite (distribution) and that whole conversation,” Walt Disney Studios Motion Pictures VP for Strategic Planning Paul Holliman says. But movie distributors have to help by relaxing their terms. For example, Warner Bros International Cinemas President Millard Ochs says studios could just require that a film be shown six nights a week instead of seven after it’s been out three weeks. “We have to change. Everything is changing around us.” Still, Reed warns that alternative content can be expensive and execs don’t know yet what material will pay off. “What we have found is that it’s more market driven on a psychographic level,” he says.

Aside from the opportunity to offer different content, some panelists said that they’ve been disappointed by the overall impact of the digital transition. “There’s been no accretive value,” Reed says. “Digital has not been the panacea everyone thought it would be.” There have been “too many bad” 3D films, says Till Cussman, VP of sales for European exhibitor services company Dcinex. And the push to upgrade digital projectors to offer high frame rates isn’t generating excitement yet. “You just converted to digital and you’re told that high frame rate won’t work on your projectors,” Ochs says. He contrasted that with his old 35mm film projectors. “I have one that’s older than I am.” As for the digital ones, “they’re warranted for 10 years. We’ll see.” Cinecert CTO John Hurst says that “once filmmakers get their hands on the look of high frame rate, I think it has an opportunity to make a movie experience that’s far different” although the “cost of making it available will affect the industry.”

All of the attention on digital technology also may distract theater owners from focusing on other issues. For example baby boomers comprise such a large part of the movie-going audience and “we hate steps,” Ochs says. “When we go to a movie theater and see all those fricking steps, it’s not how it used to be.” Reed also warned theaters about the challenges they face when they introduce restaurant-like food. “It is important to bring in restaurateurs to make it work,” he says. “Now you’ve taken an animal that couldn’t fly and couldn’t swim and trying to turn it into a seagull…It’s a different animal. It’s not just upgrading the food from pop corn and a Coke.”