Cinemas have agreed to make a quota of free tickets available for children and vulnerable groups in return for government grants to help them digitise.

The finer details of the Digitisation Scheme announced in the Budget were revealed by Parliamentary Secretary for Culture Jose Herrera yesterday.

A total of €500,000 will be allocated to cinemas over two years to help them make the necessary upgrades to show films in digital format.

Dr Herrera said the help was needed because Malta’s small market meant cinemas could not afford to fund the necessary upgrades alone.

Soon all major Hollywood studios will only release films in digital format, making the need to upgrade all the more urgent.

“Gozo’s only cinema had already closed and I, personally, would have been very sad to see the same happen in Malta,” Dr Herrera said.

The scheme was introduced in consultation with local cinema operators.

As part of the agreement, beneficiaries will make 1,000 free tickets per upgraded screen available to schools annually.

A total of 350 free tickets per screen will be given to institutions caring for vulnerable people.

Ticket prices will be capped at €2.50 per child for schools and €3 for senior citizens in groups of not less than 20 organised by local councils.

A €50 fee from each film that arrives in Malta will go to a Creative Trust Fund and used to fund creative projects locally.

Dr Herrera said all cinemas would be eligible for funds to upgrade screens, with the amount allocated dependent on the size of the business applying.

A total of €250,000 will be available this year and €250,000 in 2014.

The Culture Secretary had considered imposing quotas of Maltese films and European films on cinemas, but reasoned that this would be undue interference in the market.

“The fact is that such films are not as commercially successful for cinemas,” he said.

Dr Herrera added that when all local cinemas were digitised, it would be easier for local film productions to be screened, as the process would be made cheaper.

In most countries, cinema chains and collectives can apply for a subsidy from movie studios and distributors to replace 35mm projectors with digital equipment.

Known as a Virtual Print Fee (VPF), this financing mechanism was designed to share out the savings made from distributing digital prints instead of film prints. But Maltese cinemas had been denied access to VPF because Hollywood studios and distributors felt the potential returns did not outweigh the risks due to Malta’s size.