Ms Connors said expenses included not only the purchase of the digital projector, but associated installation, electrical work and the cost of computers needed to download digital movies. The quotes do not include download capacity for 3D movies.

Ms Connors said as a result of the diminishing availability of 35mm films, many country theatres already wait for up to five months for popular movies on film.

“But from next year, they won’t be available at all," she said.

The Independent Cinema Association of Australia (ICAA) is negotiating with distributors for a scheme to help established cinema operators convert to digital projection.

“Traditionally the minimum is 10,000 people per screen.”

Advantages of digital projection are that it requires little training to use and may make new-release movies available to smaller cinemas more quickly.

ICAA president Kieren Bell said with a limited number of prints produced, small cinemas often had to wait until city cinemas finished their run, often resulting in long delays before popular movies opened in smaller cinemas.

Movie goers tended to travel to a larger regional centre to see popular movies such as Harry Potter and Twilight instead of waiting until they screened locally, he said.

Single screen theatres such as The Regent and The James are also disadvantaged by the distributors’ policy of requiring theatres to screen new-release cinemas a minimum number of times.

Ms Connors said for single-screen theatres this meant some movies played to empty houses on later screenings, a situation which was “not logical and sensible”.

The policy also means single-screen theatres are able to screen fewer films.

Mr Bell said The Regent Theatre, licensed to seat 986 people, was just too big for a town the size of Mudgee.

Dividing the theatre into a number of smaller cinemas would allow it to offer a wider range of movies, but Mr Bell said this might not be feasible due to the “difficult size” of Mudgee's current population.

“Traditionally the minimum is 10,000 people per screen,” he said.

Whether or not they choose to refit The Regent, any new owners who plan to re-open the cinema will face the costs of upgrading to meet recently introduced fire standards.

Mansfield Armchair Cinema director James Wilson said Mudgee movie-lovers should “look outside the square” rather than fixing their hopes on The Regent re-opening in its current form. (See story below).

“It will never ever be viable to open as a 900-seat cinema,” he said.

“You just won’t get the range of films.”

Mr Wilson rejected a suggestion The Regent’s patrons would tolerate old-fashioned seats in a hot or cold theatre to avoid travelling to Bathurst or Dubbo.

“Why would I sit in an uncomfortable seat when I could watch a DVD in my recliner at home?” he said.

“People who pay $15 to $20 for a ticket expect to be comfortable, to get a new release movie and all the benefits.”

Despite the challenges facing the industry, Mr Bell is optimistic about the future of cinema in general and excited about quality of sound and picture offered by digital technology.

Cinema attendance has been one of the most resilient sectors of the industry chain, with audiences particularly flocking to movies in tough economic times, he said.

“I’m very optimistic. A lot of new screens are being built in the cities and regional areas,” he said. “People still want the big screen experience.

“They want to get out of the house and see a new-release movie with other people. It’s a social outing.”