by FilmInk Staff
Policy response seeks Commonwealth co-investment for the replacement of independent cinema projection equipment
Independent Cinemas Australia (ICA) has released No Cinema Left Behind, its policy response to its earlier research on the issue confronting Australian independent cinemas needing to replace their digital projection systems (dubbed the Digital Mark II research), proposing a national co-investment framework to renew this essential digital projection infrastructure across Australia’s independent cinema sector.
ICA’s modelling identifies an $85.4 million independent cinema renewal requirement nationally. The proposed graduated framework would see independent operators contribute $39.33 million (46.0% of the total), alongside approximately $45.725 million in Commonwealth co-investment and a very targeted $345,000 state and local government component.
The framework starts with standard 50/50 co-investment between cinemas and the government, increases to a 70/30 situation where verified capital constraint issues and risks to future cinema-access justify enhanced support, and provides an 85/15 extreme-hardship stream for a tightly assessed small number of cinemas. In a very small number of cases where these percentage-based assistance models do not produce a workable outcome, ICA proposes a full-funding model in partnership with state or local government.
ICA CEO Nick Hayes said the proposal was designed to preserve private responsibility while recognising that the same fixed infrastructure cost has very different consequences across the exhibition network. “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.
“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.”
Digital Mark II found that, assuming a base 5 per cent operating margin, as set out in that research, 129 independent cinemas with 318 screens require at least five years of modelled operating profit to fund this digital renewal unaided. After the proposed standard 50/50 co-investment, 66 cinemas with 113 screens remain in the most exposed cohort. Eighty-one of those 113 screens are regional.
Cinema also creates public value that is not fully captured in the price of a ticket. Cinemas provide cultural access, support local economic activity and town centres, and in many regional communities provide the only practical access to theatrical screen culture.
ICA President Sharon Strickland said cinemas should be understood not simply as commercial venues, but as part of Australia’s cultural infrastructure.
“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.
“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,” Ms Strickland said.
“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,” Mr Hayes said.
ICA has held productive meetings with the Minister for Regional Development, Local Government and Territories, Kristy McBain, and with the Office for the Arts and the office of the Minister for the Arts, Tony Burke. Discussions with the Australian Government on the development of a national Digital Mark II coinvestment program for eligible independent cinemas are ongoing, as is ICA’s work with screen agencies, state and territory governments and industry stakeholders on the program architecture, eligibility, delivery and financing arrangements.
The framework also proposes support for cinemas to finance their contribution, including asset underwriting and low-interest finance to help viable operators meet their required contribution.
Mr Hayes said the immediate framework is deliberately finite, but the work has also identified a longer-term industry challenge.
“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.
“We’re asking government to help us fix the cycle we inherited. We’re not asking government to inherit the next one.”
THE PROPOSED FRAMEWORK
• Standard renewal — 50% Commonwealth / 50% operator.
• Enhanced support — 70% Commonwealth / 30% operator where assessed need justifies it.
• Extreme hardship — 85% Commonwealth / 15% operator, subject to strict assessment.
• Full funding — targeted state and local government partnership where percentage-based assistance no longer works.
• Operator financing support — asset underwriting and low-interest finance to help viable operators meet their contribution.
Independent Cinemas Australia | No Cinema Left Behind | Media Release | September 2026
FUNDING ENVELOPE
• Commonwealth co-investment: approximately $45.725 million.
• Independent cinema operators: approximately $39.33 million.
• State and local government completion: approximately $345,000.
• Total independent renewal requirement: approximately $85.4 million.
