Why Did Sony Buy Alamo Drafthouse?
Why Did Sony Buy Alamo Drafthouse?
Plus: A few thoughts on 'Inside Out 2,' and The Filmcast gets a very special guest.
For years following the dawn of the Hollywood studio system, movie studios were vertically integrated, controlling every part of the process for getting films out into the world. They owned the lots on which films were made, they had movie stars under restrictive multi-year contracts, they owned the labs that processed the physical film, and they owned the theaters that screened the movies for the public. The studios were essentially an oligopoly that controlled a significant portion of America’s media diet.
In 1948, the Supreme Court case United States v. Paramount Pictures, Inc. resulted in the Paramount Decrees, a landmark anti-trust standard by the United States Department of Justice that restricted studio power and prevented studios from owning movie theaters. In the decades since, movie studios and movie theaters have largely been independent entities. But in 2020, the DOJ began the process of sunsetting the decrees. According to one assistant attorney general, “Changes over the course of more than half a century also have made it unlikely that the remaining defendants can reinstate their cartel.”
You don’t say.
Whether or not sunsetting the decrees was a good idea, what’s undeniable is that the movie industry is in a protracted state of decline. Despite the fact that the US population has grown steadily over the past few decades, the number of movie tickets sold has continued to decrease year-over-year. Even in 2019 (pre-COVID), the average American only went to a movie theater 3.5 times, compared to 5.2 in 2002. And that’s not even getting to the fact that this year’s box office is down 24% compared to last year and a staggering 42% compared to 2019. Movies and movie theaters will be around for a long time to come, but their relevance is waning in a world where free and endless entertainment is available in everyone’s pockets.
In this environment, it’s a bit of a surprise to see that Sony is acquiring the Alamo Drafthouse cinema chain for a price tag of around $200 million. Deadline has a quote from Ravi Ahuja, President and COO of Sony Pictures Entertainment, commenting on the deal:
“We believe strongly in engaging entertainment fans outside the home in fun and distinctive ways as seen most recently with our Wheel of Fortune LIVE! traveling tour, and the opening of Wonderverse in Chicago,” said Ahuja. “Alamo Drafthouse’s differentiated movie-going experience, admired brand and devoted community fit well with this vision. Our Crunchyroll business also aligns well with their audience’s interests. We look forward to building upon the innovations that have made Alamo Drafthouse successful and will, of course, continue to welcome content from all studios and distributors.”
It’s possible that Sony will use Alamo Drafthouse locations as spaces for live activations and events related to their IP, as outlined above. I could also see them using theaters in a way similar to how Netflix uses its movie theaters — as a place to hold premieres, or maybe even give smaller films an Academy Award-qualifying run.
It’s notable what type of theater chain the Alamo Drafthouse is. The Drafthouse offers a boutique and high-end experience, with decent food, a strong culture of not being an asshole during movie screenings, and custom programming and events for cinephiles. If movie theaters are still around in 50 years, I imagine these will be the types of theaters that are still going strong. Sony’s investment can be read as an investment in where theatrical filmgoing is heading.
For my money, I think the timing of this purchase is pretty interesting given Sony Motion Pictures Chairman Tom Rothman’s comments in a recent Deadline interview. The interview is wide-ranging and fascinating, but here’s what Rothman had to say about the theatrical experience (emphasis added):
The movie business has gone from number one to number five, in terms of what a young person might do on a weekend. But you can still succeed tremendously. Now, while I have Deadline here, I’m going to use this bully pulpit to raise a good issue, and I hope someone in exhibition somewhere is reading this. We need for ticket prices to come down. […]
I think it’s not healthy. I understand why it happened, and that exhibition went through a terrible near-death experience with COVID. I get the instinct to raise prices. But I think overall, if you look for example at how every Tuesday in America, every single Tuesday is the biggest day of the week. Why? Because of the half-price tickets. It’s fundamental consumer economics: just lower the prices and you’ll sell more. You’ll make it up in volume, and concessions. I do think that is relevant for young consumers. They all have their streaming services, which because you pay by the month, it feels like it’s free. And movies, particularly in big urban markets, they’re expensive. So that means it better be super special. I wish exhibition could see its way towards doing more pricing experiments, not taking them up, but taking them down.
I think it’s definitely wise to take anything Rothman says about movies with a massive chunk of rock salt (this is the guy who allowed movies like Morbius and Madame Web to be unleashed upon the general public, after all). But Rothman makes a great point about the price of movie tickets: most people think they are too dang high. There’s a reason National Cinema Day is a huge success each year. When people can buy movie tickets for $4 each, they show up in droves.
Movie theaters have a punishing business model to contend with as they try to manage the rising costs of real estate, labor, and working with the studios, many of whom don’t exactly treat them like equals. With its purchase of Alamo Drafthouse, Sony cuts out the middle man and opens the door to pricing experiments/cuts that may have the ability to shape the industry as a whole.
Only time will tell whether it ends better than the last movie theater chain Sony owned.
Inside Out 2 Is Basically a Super-Sized Inside Out 1
Inside Out 2 follows Riley, whose emotions we got to know in the first Inside Out, as she navigates the traumas of puberty amidst a trip to hockey camp. The same emotions from the last film are back — Joy, Sadness, Fear, Disgust, and Anger — but this time they are joined by more complex ones, such as Anxiety, Envy, and Ennui. Being a teenager is hard, and we experience this as Riley’s emotions all compete for supremacy and control of her mind.
One of the most enjoyable aspects of Inside Out 2 is seeing how the writers at Pixar (in this case, screenwriters Meg LeFauve and Dave Holstein) represent the mind of a teenager. Emotions are represented as physical characters, while memories appear as millions of colorful spheres, which in turn can contribute to Riley’s sense of self — here imagined as an organic, tree-like structure. There are many other inventive flourishes that I won’t spoil here, but I had a blast discovering how the movie imagined all these elements and played them off each other to create a compelling drama in Riley’s mind.
Despite all this, I can’t shake the fact that this sequel has a theme and plot that are nearly identical to that of the first film. Both films are about accepting the complexity our different emotions and how they collectively contribute to making us who we are. The films are also parental allegories with Joy serving as a mother figure who is constantly learning and re-learning that she can’t shield Riley from the most challenging things in life. Despite its repetitiveness, I still found that particular concept to be intensely moving. After all, we all need someone to accept us for the messy, complex people we are and to understand the realities we exist in.
Inside Out 2 is a charming, pleasant film and certainly Pixar’s best theatrical release since 2019’s Toy Story 4. Even if this movie is just a rehash of Pixar’s greatest hits, those hits sure were pretty good to begin with.
Other Stuff David Chen Has Made
[PAID ONLY] One of the reasons the newsletter updates have been light lately is because I recently traveled to Las Vegas to compete in a World Series of Poker tournament. You can hear a 2-hour podcast I recorded about this experience over on my personal Patreon page.
On The Filmcast this week, Paul Scheer joined us to discuss Bad Boys: Ride or Die. Be sure to check out Paul’s book, Joyful Recollections of Trauma.
On Decoding TV, Patrick Klepek and I discussed The Acolyte and why Netflix keeps getting sued.
Finally: House of the Dragon returns tonight! To make sure you don’t miss my recaps/reviews of every episode, be sure to subscribe to A Cast of Kings podcast wherever you get your podcasts (like Apple Podcasts for example).
As someone who lives next door to an Alamo Drafthouse and goes there pretty much every weekend, I just pray that Sony leaves it alone for the most part. Totally fine for them to favor Sony releases, add more Crunchyroll programming, etc — they already seem to favor certain distributors like Neon to the detriment of bigger releases, so that wouldn’t be new. But if the repertory screenings disappear so Morbius can play uninterrupted for months, I’m going to be very sad.