Yes, they closed, but that doesn't mean they wouldn't survive now! Cinemas do now do a thriving trade and yes, any cinema that wants to survive has to show the blockbusters but that doesn't mean there can't be a decent arthouse offering too - one subsidises the ability to show the other - Picturehouse Cinemas seem to manage it and are expanding their portfolio (although I accept that they are now part of a bigger group company).

There is no reason why a cinema in Forest Hill can't survive. I know I'd use it. Whether it could survive in that particular building given the listed Building constraints is another question entirely. Multi screen cinemas can and do exist in listed buildings but I suspect those buidlings were more easily modifiable and perhaps did not have the same number of remaining existing features that merited listing.