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Sony Pictures Acquires Alamo Drafthouse Cinema (1 Viewer)

Alex...

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In a groundbreaking moment, Sony Pictures Entertainment has acquired Alamo Drafthouse Cinema in a deal that puts a major Hollywood studio back in the business of owning a movie theater for the first time in more than 75 years.

 

Malcolm R

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Yep, the Decrees were not officially rescinded until 2020, but in 1985 the Dept of Justice announced they would no longer enforce them. So that effectively ended them in 1985. Sony acquired Lowe's theaters in 1986.
 

Josh Steinberg

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I feel like this is a good thing. There was a time and a place when the decree made sense, but it no longer does.

Studios should have some skin in the game when it comes to exhibition. We currently have an unsustainable system where studios force deals upon theaters wherein they take 90-100% of grosses for the first two weekends on the most successful films of the year, and by the time the split evens out to something more fair for exhibitors, the films have already exhausted their shelf lives. Studios keep exploring new and more expensive exhibition formats and then pass the costs of building those auditoriums onto the theaters. Studios play hardball during negotiation with their talent and can accept long strikes because it doesn’t really hurt them when theaters have no product to show. Studios also are forced to spend ludicrous sums on advertising because they don’t have a natural existing space to promote their wares, which adds so much to every budget as to make nearly every release unprofitable.

Something needs to change.

If the studios own their own theaters, they can now keep the entire grosses for the entire run, making it easier to hit a break even point. If they own their own theaters, they can have a network of existing venues within which they can promote their own products and lower their advertising spend, reducing budget. And if these theaters they own need to turn a profit, then there is incentive to produce product on a consistent schedule; long strikes will no longer be as bearable for them when the pain the theaters feel becomes their pain too. It will also make bringing older, popular films back easier, and as we’ve seen from some reissues this year, there actually is an audience that wants to see their favorites on the big screen again.

I really have long believed that the best way to fix a lot of the problems with exhibition is to put more of the responsibility for it back to the studios. Alamo alone is a small chain and in and of itself this won’t change much, but it’s a good first step.
 

Edwin-S

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This is bad. All this does is ensure that films will only play in the chain the studio owns, so small markets will start seeing a lot of films not making it into their areas if there is no studio-owned theater available.
 

Josh Steinberg

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I cannot fathom a reality where Sony spends $200 million to make a new Spider-Man or whatever blockbuster is next, and then releases it solely to this tiny chain of a dozen or so theaters that they now own.

They didn’t do that when they owned hundreds of theaters with Loews and that’s not how it’s going to work now.
 

Garysb

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Now I’m beginning to understand why all the Alamo Drafthouses in north Texas closed last week.
Per the NY Times article about the purchase:

It comes at a time of financial trouble for Alamo and for the movie theater business as a whole. Several of Alamo’s franchised locations filed for bankruptcy and closed this month, making Sony’s move a potential lifeline for the struggling chain. Alamo filed for Chapter 11 bankruptcy protection in 2021 before a private equity firm stepped in.
 

TravisR

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I cannot fathom a reality where Sony spends $200 million to make a new Spider-Man or whatever blockbuster is next, and then releases it solely to this tiny chain of a dozen or so theaters that they now own.

They didn’t do that when they owned hundreds of theaters with Loews and that’s not how it’s going to work now.
Agreed but I could see Sony opening non-megabudget movies earlier at their own theaters.
 

DaveF

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This is a big deal for me. My neighborhood’s flagship and anchor store is The Alamo Drafthouse. It is original to the retail build. It’s literally a 10 minute walk from my front door. I have friends that are there weekly. We’re there hanging out at the bar with friends about monthly since mid 2020. I really do not want Alamo to fail or even suffer cost-cutting that destroys what makes it a unique and great theater.

But they’ve been challenged since the pandemic.

And box office attendance (or revenues) is down to 30- or 40-year lows. People have quit going to the theater.

I’m glad it’s Sony rather than a Private Equity company out to squeeze all the profits before flipping it out again. Sony is an entertainment company, and they’re a movie company. Ostensibly, there’s a real connection in core corporate interests with this purchase. So some reason for hope.

But Sony isn’t really a direct-to-consumer business. They’re a giant consumer electronics company, a nascent EV company, and a production company for videogames and movies.

But Sony doesn’t own restaurants or retail stores (in any meaningful way). Are they up for the unique challenges of running a retail movie theater / restaurant / bar chain in the US? I hope so.
 

Patrick McCart

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I'm cautiously optimistic. The Alamo Drafthouse locations I frequent (Woodbridge and Loudon in NoVA, plus the DC ones) offer consistently excellent presentations of both current and older films, not to mention have the best theater popcorn I've ever tasted.
 

Baenwort

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I feel like this is a good thing. There was a time and a place when the decree made sense, but it no longer does.

Studios should have some skin in the game when it comes to exhibition. We currently have an unsustainable system where studios force deals upon theaters wherein they take 90-100% of grosses for the first two weekends on the most successful films of the year, and by the time the split evens out to something more fair for exhibitors, the films have already exhausted their shelf lives. Studios keep exploring new and more expensive exhibition formats and then pass the costs of building those auditoriums onto the theaters. Studios play hardball during negotiation with their talent and can accept long strikes because it doesn’t really hurt them when theaters have no product to show. Studios also are forced to spend ludicrous sums on advertising because they don’t have a natural existing space to promote their wares, which adds so much to every budget as to make nearly every release unprofitable.

Something needs to change.

If the studios own their own theaters, they can now keep the entire grosses for the entire run, making it easier to hit a break even point. If they own their own theaters, they can have a network of existing venues within which they can promote their own products and lower their advertising spend, reducing budget. And if these theaters they own need to turn a profit, then there is incentive to produce product on a consistent schedule; long strikes will no longer be as bearable for them when the pain the theaters feel becomes their pain too. It will also make bringing older, popular films back easier, and as we’ve seen from some reissues this year, there actually is an audience that wants to see their favorites on the big screen again.

I really have long believed that the best way to fix a lot of the problems with exhibition is to put more of the responsibility for it back to the studios. Alamo alone is a small chain and in and of itself this won’t change much, but it’s a good first step.

To me the true fix is breaking up the streaming services from the producers of content. As with the movie theaters that started it, the problem is with joint the content creator with the distributor.

The incentives that the original bar was trying to address are now replicated in companies like Disney and Netflix. Their control of distribution (streaming) is causing the same harms to consumers as was the instigation of the original solution.

If we can't break up the streamers then I agree that the creators owning the theaters is an answer. Not as good as applying the division to streaming but the next best thing..
 

Desslar

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I'm cautiously optimistic. The Alamo Drafthouse locations I frequent (Woodbridge and Loudon in NoVA, plus the DC ones) offer consistently excellent presentations of both current and older films, not to mention have the best theater popcorn I've ever tasted.
Wait, Loudoun and Woodbridge, but not Crystal City? That seems like a lot of driving.
 

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