A Durham City cinema is under threat due to increased competition, falling audience numbers and rising costs.
The Gala Theatre attracted fewer customers last year, with cinema income dropping by £97,000 or 20.1% alongside major losses from theatre and catering income.
Durham County Council, which runs the Gala, has set up an improvement group to look at the future of the venue, which needs to reduce costs by £400,000.
And this week, the council’s Environment and Sustainable Communities Overview and Scrutiny Committee met at the Gala on January 28 to discuss its future.
Head of culture and sport, Steve Howell, said options include improving the existing theatre programme, exploring niche markets, hosting exhibitions and producing more work in-house.
While any major changes would be subject to cabinet approval, he explained, withdrawing from the cinema was a real option due to rising competition.
This includes a new Odeon cinema set to open this year and a Everyman cinema, which is planned as part of the Milburngate development.
“From my point of view to keep the Gala cost base as it is with all that cinema stuff happening will be an incredible achievement,” he said.
“We have to determine the future of the cinema, its a big question for us.
“We have a number of improvement groups that are working around it in terms of programming content, operating costs and shift patterns.”
Coun Patricia Jopling said for the cinema to survive, it would have to focus on special events and niche areas.
“It’s no good even trying to compete with the new cinemas that are coming,” she explained.
“But the retro stuff will still bring a young audience that come in the afternoon, that is if you decide to keep it.
“I think you do need to speculate to accumulate.”
In 2017/18, the Gala staged 347 live events, presented 2,093 cinema screenings and made £1.64million from ticket sales.
Of the 186,183 tickets sold, around 33,442 were linked to the Snow White and Seven Dwarves panto, bringing in more than £300,000 for the venue.
Although the venue spent about £2.95m over the period, it only brought in £2.28m.
Existing pressures include increased maintenance costs for the building, which is approaching its 20th birthday, and the impact of austerity on council budgets, the meeting heard.
And limited capacity in the theatre makes it difficult to attract larger touring West End shows which has an impact on theatre income.
Councillors suggestions to tackle pressures included creating a more defined bar area, relocating the cafe to the front of the building to attract footfall and promotions in council-owned car parks.
Coun Rob Crute also called for council bosses to learn from best practice from other mid-range arts venues facing similar issues.
However, Mr Howell confirmed that bosses would monitor the impact of the new cinemas on the Gala before making decisions on its future.
He added an alternative model included “creating a community” around music and drama at the Gala, including a focus on produced work.
Improved marketing, “tight controls” on spending, building relationships with partners and attracting more external funding are also expected to play their part.
He added: “I think we need to make some operational changes that helps us not be subject to the ups and downs of the content available.”
The Gala currently has 134-seat and 82-seat cinemas alongside a small visual arts gallery space, and studio space and 500-capacity theatre.
More developed proposals for the venue are expected to be revealed by the end of this year.
Chris Binding , Local Democracy Reporting Service