Boxoffice Pro - Winter 2020

INDUSTRY A CENTURY IN EXHIBITION
$2.69, the MPAA reported a 6.9 percent
increase in the average ticket price.
Exhibitors found themselves squeezed
between higher print costs, larger
margins for studios, and the fear of losing
their patrons. Boxoffice Pro editor
Alexander Auerbach, who took over from
magazine founder Ben Shlyen as editor
in 1979, urged the industry to control
its costs and pointed out the studios’
hypocrisy in an editorial published in
June 1982. “If the major studios cannot
turn out a steady flow of films for less
than $10 million each, how do they
propose to make them for cable-only
distribution for $3 million or less?” he
wondered.
Big Business Entertainment
The financial changes of the 1980s made
it harder and harder for small studios and
exhibitors to survive. Instead, vertically
integrated media conglomerates, well
equipped to finance and distribute these
movies, ushered in the era of big-business
entertainment. Acquisitions of studios
by nonmedia conglomerates had started
in the 1960s, but the 1980s was a time of
unprecedented media cross-ownership,
vertical integration, and the increasing
importance of financial instruments
like equity, shareholder value, and
other financial assets during a period of
unprecedented deregulation.
In 1982, Coca-Cola, a longtime
partner of theaters, entered the industry
aggressively when it bought Columbia
Pictures for a reported $750 million. It
marked the first takeover of a major
Hollywood studio by a conglomerate
since Kinney National Services acquired
Warner Bros.-Seven Arts, Gulf & Western
bought Paramount, and Transamerica
took control of UA in the late 1960s. In
1983, Columbia, HBO, and CBS joined
forces to create Tri-Star (later TriStar), a
new studio that would produce films for
theatrical exhibition and cable TV. A year
later, Tri-Star bought the Loews theater
chain, raising antitrust concerns in regard
to a potential violation of the Paramount
Decrees. In 1987, Japanese electronics
giant Sony moved into theatrical
distribution to enhance its video sales with
the creation of AIP Distribution. Two years
later, in September 1989, Sony Corporation
of America purchased Columbia Pictures
and Tri-Star from Coca-Cola and renamed
itself Sony Pictures Entertainment.
Sony’s acquisitions opened the way for
foreign ownership of studios, amplifying
American anxieties about a “foreign
invasion.” The Qintex Group of Australia
had bought MGM/UA earlier in 1989,
topping the bid of Australian publisher
Rupert Murdoch, who had acquired 50
percent of 20th Century Fox in 1985. But
what the Sony acquisition ultimately
Acquisitions of studios by
nonmedia conglomerates
had started in the 1960s,
but the 1980s was a time
of unprecedented media
cross-ownership, vertical
integration, and the
increasing importance of
financial instruments ...
30 Winter 2020