Independent Cinemas Australia (ICA) is calling for approximately $45.7 million in Commonwealth funding to help independent cinemas replace ageing digital projection equipment, warning regional venues are particularly exposed to the looming cost.
The industry body has unveiled its “No Cinema Left Behind” policy proposal, which outlines a co-investment model for an estimated $85.4 million infrastructure renewal across Australia’s independent cinema sector.
Under the plan, independent operators would collectively contribute around $39.33 million, or 46% of the total cost, while the Commonwealth would provide approximately $45.725 million. A further $345,000 would come through targeted state and local government support.
ICA is proposing several levels of assistance based on the financial capacity of individual cinemas. The standard model would split replacement costs evenly between operators and the Commonwealth, increasing to 70% government support for cinemas facing verified capital constraints and 85% in cases of extreme hardship.
A full-funding option involving state or local governments has also been proposed for a small number of venues where those models would not be viable.
ICA CEO Nick Hayes said the proposal was designed to ensure operators remained responsible for a significant share of the investment while recognising the different financial pressures facing cinemas around the country.
“’No Cinema Left Behind’ is not a proposal for government to replace private investment. Independent operators would still fund almost half of the national independent renewal requirement,” he said.
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“The issue is that a synchronised national replacement wave lands very differently on a large metropolitan multiplex and on a small cinema serving a regional, rural or remote community. The policy response should follow demonstrated capacity and the consequences for access.”
The proposal follows ICA’s ‘Digital Mark II’ research into the approaching replacement cycle for digital cinema projection systems.
Based on a 5% operating margin, the research found 129 independent cinemas representing 318 screens would require at least five years of modelled operating profit to fund the necessary upgrades without assistance.
Even after applying the proposed standard 50/50 funding model, ICA estimates 66 cinemas representing 113 screens would remain among the most financially exposed. Of those screens, 81 are in regional Australia.
ICA president Sharon Strickland argued the potential impact extends beyond individual cinema businesses, particularly in communities with limited access to theatrical exhibition.
“Cinemas are where Australian stories meet Australian audiences. They are gathering places, employers, anchors in local communities and, in many regional towns, an essential piece of cultural infrastructure,” she said.
“This is about making sure communities across Australia continue to have access to the shared experience of cinema — and that the substantial public investment Australia makes in screen production can ultimately reach audiences on a cinema screen.”
“The ticket price tells you what someone pays to see a film. It doesn’t tell you everything a community loses when its cinema disappears,” Strickland added.
Hayes continued: “That doesn’t mean government should pay for every projector. It does mean there is a legitimate public interest in co-investment where the commercial return alone cannot sustain essential cinema infrastructure.”
ICA said it has met with Regional Development, Local Government and Territories Minister Kristy McBain, as well as the Office for the Arts and the office of Arts Minister Tony Burke. Discussions with the federal government over a potential national Digital Mark II co-investment program are ongoing, alongside talks with screen agencies, state and territory governments and other industry stakeholders.
The proposal also includes asset underwriting and low-interest finance to help viable cinema operators fund their share of replacement costs.
Hayes said ICA ultimately wants the industry to develop a longer-term model capable of funding future equipment replacement cycles without requiring another government intervention.
“Solving ‘Digital Mark II’ does not make the capital cycle disappear. There will be a ‘Digital Mark III’. We want to work with the broader industry on a sustainable solution that progressively makes future infrastructure renewal self-financing, so we are not coming back to government to solve the next capital wave,” he stressed.
“We’re asking government to help us fix the cycle we inherited. We’re not asking government to inherit the next one.”