Australia is on the path to achieving a full-scale conversion to digital cinema exhibition probably within the next five to ten years. Despite early optimism that digitization could provide a catalyst for greater democratization of the Australian exhibition market by creating more opportunities for audiences to see independent and alternate films, this outcome now appears far from certain. The launch and ongoing roll-out of the international standard for digital exhibition, which is now firmly controlled by the major American studios, is intensifying, rather than diminishing, the market dominance of these media conglomerates and their local allies, the major Australian exhibition chains. Independent film exhibition and alternative presentation formats, on the other hand, are being pushed even further to the periphery by these increasingly centralized market forces. While independent and major exhibitors have historically coexisted, although at times in a somewhat uneasy relationship, the financial imperatives of digital cinema now threaten to drive many independent cinemas to the edge, and with them the ongoing diversity of cinema culture in Australia. Of particular concern is the fate of independent theatres in regional and rural locations where many provide the only public screening opportunities within large geographic areas. This article outlines digital developments in Australia's commercial cinema industry within a national and international context, and in doing so considers the impact of digital exhibition technologies on Australia's independent cinema sector.