Cinemas face an ‘invest, downsize or die’ dilemma as they struggle to fund the necessary equipment to screen films in digital format.
They are faced with the stark choice as Hollywood studios are expected to cease producing 35mm film prints for major markets by the end of this year.
“If cinemas don’t upgrade they will have to close down or reduce screens,” Tal-Lira Cinema managing director Malcolm Sant said bluntly.
Movie studios are pushing to have all films released solely in digital format as it will save them the expense of having to physically print and ship 35mm film to theatres and distributors.
The main problem for Malta’s cinemas is the huge costs involved in purchasing digital equipment relative to commercial returns.
Cinema managers who spoke to The Sunday Times estimated the cost at between €40,000 and €60,000 per screen.
Gozo’s only cinema, the Citadel in Victoria, stopped showing commercial movies indefinitely on March 31 as it tries to find €100,000 to upgrade its two screens.
“This change has been imposed upon cinemas. In Malta we do not have turnovers in cinemas that allow cinemas to easily absorb this cost,” said Embassy Cinema manager Sharon Montebello, pointing out that digital equipment is also far more costly to maintain than 35mm projectors.
In most countries, cinema chains and collectives can apply for a financial subsidy known as a Virtual Print Fee (VPF) to replace 35mm projectors with digital equipment. This financing mechanism was designed to redistribute the savings realised by studios when distributing digital prints in place of film prints.
Most chains abroad obtain the VPF through middlemen known as ‘integrators’. Integrators purchase the necessary equipment and lease it to cinemas for a fixed period. They typically collect a fee from studios and distributors for each showing.
Simon De Cesare, general manager of Eden Leisure Group, which runs Eden Cinemas, explained that Maltese cinemas had collectively been refused assistance due to the small size of the local market.
Integrators had agreed to assist Maltese cinemas, only for the Hollywood studios to veto the deals as they felt the potential returns did not outweigh the risks. Tal-Lira in Fgura, Eden in St Julian’s, Embassy in Valletta and Empire in Buġibba each have at least one digital screen installed already.
“I think all operators are considering their options at the moment with regard to how to finance more investments or the future of their operations,” Mr De Cesare said.
“Hopefully, the beauty of cinema and the cultural element it brings to the Maltese will not be lost. Even a reduction in the number of screens would likely result in cinemas showing only Hollywood films at the expense of more diverse cultural content.”
Tal-Lira’s Mr Sant expressed concerns about the social impact of cinemas closing down: “We are the only cinema in the south – it would have a big impact on the community if we had to close. And if the cinema in Valletta closed we would probably have the only capital city in the world without a cinema.”
Charles Pace, managing director of KRS Film Distributors, said his company would continue distributing 35mm films until they were no longer available.
“Most of our suppliers have long been informing us that 35mm prints are coming to an end and local cinemas have been made aware of this for some years,” he said, adding digital prints were superior in quality.
The Parliamentary Secretariat for Culture has yet to respond to questions on this issue.
Meanwhile, the Citadel Cinema in Gozo clarified that, although it has suspended showings of commercial films, it is still screening the Gozo 360˚ audio-visual show. It is also available for private group bookings to screen 35mm films.