Remember The Alamo
'The Alamo" Directed by John Wayne

Remember The Alamo

This business of exhibition is undergoing significant changes, and the news of Sony's acquisition of Alamo was a major surprise to me. The re-emergence of studios venturing into circuit ownership indicates that history is repeating itself. I have conflicting views about this acquisition, which raises concerns on multiple fronts.

Following the previous administration's eradication of the Paramount Decree, I anticipated the rapid adoption of vertical integration as a popular business strategy from the studios. I am sure given their unease regarding streaming the studios have held off making any major moves. Sony's actions are understandable given their struggles with streaming, but I am apprehensive about the potential influence and restructuring of Alamo's business model to align with Sony's agenda.

Founded in 1997 by Tim and Karrie League as an arthouse theater in Austin, Texas, Alamo now stands as the 7th largest circuit in the US with an annual audience of ten million. Despite facing challenges such as strikes and the pandemic, Alamo fared better than its competition. In 2023, the theater chain experienced a remarkable 30% increase in box office revenue compared to 2022, surpassing the industry average by 9%.

The now defunct Paramount Decree began as a result from? a 1938 lawsuit filed by The Department of Justice against the major studios, then known as the Big Five, which at that time included MGM, Paramount, RKO, 20th Century Fox, and Warner Brothers and studios known as the Little Three: Universal, United Artists, and Columbia. The Supreme Court made the statement that these studios "had engaged in a widespread conspiracy to illegally fix motion picture prices and monopolize both the film distribution and movie theater markets." The conspiracy which was painted was an attempt by the studios to be completely vertically integrated. In short, they strived to own all aspects of the movie business.

The focus of the Paramount Decree was the fairness of the business of exhibition. Traditionally, exhibition was the highest-grossing of the movie ecosystem. The major studios would place movies exclusively in their owned cinemas often to the detriment of independent cinemas. After squeezing the lion share of the income out, then the movie would be sent out to the independent theaters.

When the Supreme Court ruled in favor of the Paramount Decree, the eight studios were forced to execute consent decrees committing to ceasing the monopolistic practices such as enforcing minimum ticket pricing as well as block booking. This gave the major studios an unfair advantage over much smaller producers and independent exhibitors. MGM fought the decrees, especially the ones forcing them to liquidate their ownership in their theaters. They finally settled with the Justice department in 1957.

Now to be accurate, the Department of Justice took its eye off the Paramount Decree beginning in the late 80’s. In? 1988, Columbia Pictures agreed to acquire USA Cinemas Inc. When Sony purchased Columbia in 1989 from Coca Cola, they assumed ownership of these theaters.?

In 1994, the name of the circuit was changed to Sony Theatres. In 1996 they decided that was not the best idea so Sony Theaters' name was changed to Loews Theaters. In September 1997, Cineplex announced that it would merge with the newly minted Loews Theatres for $1 billion, surprisingly this merger was approved by the Department of Justice, a very fickle bureaucracy.

?In 2004, the ownership sold Loews to a consortium of investors. The Canadian operation was spun off into what is now known as Cineplex (again). In 2005, AMC Theatres merged with the remaining Loews theaters.

?Now Sony is wading into exhibition again. I think though it is a wider play, a play which might shift the business of exhibition into an experiential business. I believe that what Sony is planning is to shift a good part of its focus to diversify its interactive and gaming offerings. Sony has a major piece of the video game market and I suspect that they are beginning to see the necessity of a physical beachhead for these business verticals. Last year Sony launched “Wonderverse,” an experiential location in the Chicagoland area.

?I think that Sony is on a mission to shift the focus of exhibition into a multi faceted entertainment space. Alamo, with great locations in 27 cities, could be the perfect foundation from which Sony could twin a solid virtual business with a physical business. Look for Gran Turismo Sim Racing, Playstation video game lounges, Movie centric Virtual Reality Arenas, and of course movies.

?At the end of the day though, I will remember what Alamo represented, a prevailing passion for cinema and everything cinematic. From the Mondo Art to retro screenings to the development of the American Genre Film archive….paradise lost.

This weekend once again proes that if we give audience what they want they will show up.


Mark Louis

Media and Entertainment Technology Professional

8 个月

To paraphrase Jurassic Park, 'Studios and Cinema Ownnership, two species separated by more than 50 years of evolution have just been suddenly thrown back into the mix together. How can we possibly have the slightest idea what to expect?'. ??

Theresa English, AIA

Principal Licensed Architect in 18 states Focused on Architecture for Cinema, Entertainment and Food & Beverage

8 个月

Definitely an interesting read after a surprise week.

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