Hobart's State Cinema, once saved by Gough Whitlam, enters new era after sale to Reading

John Kelly has come a long way in 17 years.

With big plans for refurbishment, he bought the run down State Theatre in North Hobart in 2002.

Now Mr Kelly is bowing out, selling a highly successful business which is at the heart of the inner-city suburb's regeneration.

"It's just so big now for an individual like me to run it … it is quite frankly beyond me," he told ABC Radio Hobart.

The business, which screens arthouse offerings as well as the occasional blockbuster, has been sold to American cinema chain Reading.

"Reading has assured me they want to maintain the fabric and the essence of the cinema," Mr Kelly said.

"Quite frankly, anyone who tinkered around the edges I'd think would be mad, the formula is so proven now."

Built just before World War I in 1913, the now-State Cinema has faced many near-death experiences over the decades as the popularity of going to the movies has waxed and waned.

Mr Kelly credits Labor prime minister Gough Whitlam with saving it in 1970s when it was bought by the government-funded Australian Film Institute.

"[Whitlam] saved it from imminent closure in the TV era, which wrecked most cinemas around Australia and around the world," Mr Kelly said

Time to hit 'reset' button

Even now, with the growing availability of streaming services, the State Cinema's popularity has continued to grow, welcoming an estimated 250,000 people a year.

Mr Kelly described it as the "beating heart" of North Hobart, a place people go to for a feeling of community, not just to watch a film or, thanks to recent works, enjoy a beverage or browse its bookstore.

"I've lived in North Hobart my whole life, tumbleweeds were rolling down the streets in the 70s and 80s and it's had this metamorphosis," he said, describing it as "a total obsession".

"I've just poured my heart, soul, every drop of sweat and money into it. And that's fine, I'd never have missed it for 1,000 years, but I've just decided to hit the reset button and thrown out the net."

Kelly said he had finally got the cinema "structurally, with the amount of screens, the bookstore, the cafe, the wine bar" at a "very good place".

"It has never been stronger in all regards … I believe this next chapter will give the cinema a good long-term sustainable future."

New owners Reading have had a presence in Australia since the mid-1990s, with 20 sites around the country — including one in Devonport.

Kelly, who retain ownerships of the building, said the State's business model neatly "dovetails into Reading's … brand" and has predicted a "pretty much a seamless transition".

That includes patrons still being able to enjoy a glass of wine with a movie.

"Absolutely, it is one of the cornerstones of the [State] cinema's experience.

And, as for loyal cinephiles fearing a drop in standards, Mr Kelly gave an assurance.

"There will be no introduction of popcorn or post-mix cordial," he said.