Summary
Sony Picturesbecomes the first studio to own theaters in 75 years in a ground-breaking purchase. In recent years, the theatrical industry has struggled mightily due to a combination of the COVID-19 pandemic and the dual WGA andSAG-AFTRA strikes. Alamo Drafthouse, the seventh-largest theater chain in North America, was hit especially hard by the pandemic, filing for Chapter 11 bankruptcy in 2021. However, the theater chain rebounded nicely in 2023 with a 30% increase in box office revenue from the previous year, well above the industry average.
Now, after quietly soliciting offers for the past several months and struggling to find a buyer, Sony has bought out the major movie theater chain in a historic move.Sony Pictures has announced it has acquired Alamo Drafthouse, making them the first studio to own theaters in 75 years. Under its new ownership, the theater chain will be overseen by a newly established division known as Sony Pictures Experiences.
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Why Sony Pictures Buying Alamo Drafthouse Is Such A Big Deal
It Could Start The Creation Of Another Studio Monopoly
Sony Pictures buying Alamo Drafthouse is such a big deal since they are the first studio to own theaters in 75 years. The last timemovie studios owned theaterswas during the 1940s when the United States brought an antitrust case against several major movie studios, including Paramount Pictures, alleging monopolistic practices.As a result of a consent decree in 1948, studios were forced to divest their ownership of movie theaters, leading to the decline of vertical integration in the industry.
If more studios acquire theaters, it will lead to their increased control over the entire process and potentially higher profits, creating another studio monopoly reminiscent of the 1940s.
However,the antitrust ruling from 1948 that barred studios from owning exhibition companies, known as the Paramount Decree, expired in 2020. While federal regulations relaxed during the 1990s, and Sony previously owned and managed the Loews Theatre Chain, the studiobuying Alamo Drafthouserepresents a rare instance in recent history when a studio purchased a major theater chain. Sony buying Alamo Drafthouse is such a significant move because it blurs the line between production, distribution, and exhibition within the film industry.
Historically, movie studios have been involved primarily in the production and distribution of films, while theaters handled the exhibition end. WithSony Picturesacquiring Alamo Drafthouse, it will vertically integrate operations once again, with the studio controlling more aspects of a film’s journey from production to presentation. If more studios acquire theaters, it will lead to their increased control over the entire process and potentially higher profits, creating another studio monopoly reminiscent of the 1940s.
Some of Sony’s upcoming releases includeFly Me to the Moonthis July andKraven the Hunter –coming soon.
