Since the first film screenings in the 1890s, cinemas have enjoyed great popularity in Melbourne. Audiences were initially accommodated in vaudeville theatres, suburban halls and at open-air venues such as cricket grounds and beaches. Cinemas appeared after 1907, the first permanent venue opened by T.J. West in the circus buildings known as Wirth's Olympia. West's Pictures were located on the south side of Princes Bridge where a number of barn-like structures were converted for film exhibition. In 1909 West opened Melbourne's first purpose-built cinema at the corner of Sturt Street and City Road, South Melbourne.
In 1911 J.D. Williams took over the Queens Hall in Bourke Street and converted it into the Melba Theatre. Williams was an entrepreneurial showman who introduced continuous hour-long screenings from 11 a.m. to 11 p.m., special matinees for women and children, and a twice-weekly change of program. His cinemas (he opened a second theatre, the Britannia, in 1912) contributed significantly to Bourke Street's reputation as an entertainment district. The street's first permanent cinema had opened in 1909 when Dr Arthur Russell established Hoyts Pictures at St George's Hall. By 1916, there were eight cinemas in Bourke Street presenting continuous screenings.
Permanent cinemas appeared in the suburbs from 1910. The first purpose-built suburban cinema was the Lyric in Prahran. Others soon followed: the Elsternwick Theatre (now the Classic Cinema) and the Lyric Theatres in Brunswick and Fitzroy. By 1919 there were 67 suburban cinemas and 11 cinemas in the city. These cinemas were modest in design and scale compared to the luxury cinemas built during the 1920s. The first of the American-style picture palaces was the Capitol Theatre in Swanston Street, designed by Walter Burley Griffin and opened in 1924. Two of Melbourne's grandest cinemas, the State Theatre in Flinders Street and the Regent Theatre in Collins Street, were opened in 1929. The atmospheric State Theatre was decorated after the style of an ancient Italian courtyard, with trailing clouds and twinkling stars on a blue dome ceiling.
The picture palace era ended with the depression of the 1930s, which created new priorities for cinema-owners. Smaller theatres, with their emphasis on simplicity and the use of indirect lighting as a decorative medium, required less capital to build and maintain. The introduction of sound films in 1929 also contributed to changes in cinema design. Acoustics became a fundamental consideration, requiring more intimate venues and simpler methods of auditorium design. Most of the new construction activity was centred in the suburbs, where Hoyts established itself as the major cinema chain with modern cinemas like the Padua in Brunswick and the Windsor in Prahran. Construction activity in the city was confined to the newsreel cinemas, which screened continuous programs of newsreels (each session lasting about an hour), designed for a smaller, more transient audience.
The introduction of television in 1956 had a devastating impact on Melbourne's cinemas. Attendances fell by 52% in less than three years, and of the 124 cinemas operating in the suburbs in 1956, 57 had closed by 1961. Many cinemas were demolished, and disused cinemas were reused as factories or warehouses, or converted for newly introduced sports like squash or tenpin bowling. The cinema chains responded with wide-screen formats like Cinemascope and Cinerama, as well as elaborate effects such as 3D and Sensurround. Hoyts opened Australia's first drive-in cinema in Burwood in 1954. By 1970 there were 20 drive-ins operating in competition with suburban cinemas.
By the 1970s many cinemas were attracting new audiences. Large numbers of postwar immigrants ensured the successful operation of cinemas devoted to non-English language films, and the art-house crowd enabled cinemas like the Valhalla in Richmond and the Carlton Movie House (closed in 1999) to screen revivals and non-commercial releases. The introduction of colour television and video cassette recorders in the 1970s further eroded the cinema's popularity. While today's cinema-goers mostly visit the city showcase cinemas or the large suburban multiplexes, many old cinema buildings still survive to remind us of a time when the cinema was the most popular show in town.