Sony Buying the Drafthouse Is (Probably) Good

Plus: a trashy assignment.

An Alamo Drafthouse in Austin, TX. (Photo by Brandon Bell/Getty Images)

The biggest—and, frankly, most surprising—news in the world of entertainment this week has to be Sony’s decision to purchase the Alamo Drafthouse from the private equity firms (and founder Tim League) who currently owned it.

After the Justice Department rolled back the Paramount Decrees—a series of antitrust measures agreed to by major Hollywood studios that, among other things, led to studios being forced to divest from ownership of movie theaters—many speculated that it was only a matter of time before a studio bought a theater chain. Imagine: Disney-Regal, or Warner-Discovery-AMC. But then the streaming boom kicked off and every studio decided that the real money was in going direct-to-consumer via their TV sets.

Every studio except Sony, that is, which has dabbled a bit with home video and streaming but couldn’t quite figure out how to make it work for their more mainstream offerings and eventually settled on being an “arms dealer” in the streaming wars. This was lucrative and low-cost for the studio: According to the Hollywood Reporter, Netflix’s five-year deal with Sony sending the streamer the first run of Sony films after theatrical/VOD sales was worth about a billion dollars.

That window is only worth what it is because movies that play in theaters (typically) perform better on streaming than those that do not play in theaters: the advertising required for a theatrical run plus audience bias toward theatrical movies feeling like “real” movies as opposed to made-for-TV movies both increase excitement. As such, Sony and its chairman Tom Rothman has remained firmly committed to theatrical presentations.

His whole interview with Deadline back in May is worth reading—he has lots of thoughts about moviegoing habits and the evolution of advertising—but one thing in particular jumped out at the time and feels even more important now.

“We need for ticket prices to come down,” he told Deadline’s Mike Fleming. “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.”

With this view in mind, Sony’s purchase of the Drafthouse, in particular, makes perfect sense: the Drafthouse’s business model isn’t based primarily on the number of tickets sold, it’s based on getting people in the door so they’ll order bottomless popcorn that they wash down with a $9 soda (that comes with unlimited refills, each of which costs the chain pennies) or a $9 beer (which comes with zero refills and often leads to the thirsty, popcorn-guzzling guest getting a second $9 beer).

I hate the word synergy, but owning a chain of theaters offers a lot of interesting opportunities for Sony. I suggested above that Sony has stayed out of the streaming wars, but that’s not entirely accurate: they bought the anime-oriented streaming service Crunchyroll a few years back and it is pretty popular for a relatively niche offering, with 13 million paid subscribers. There’s no reason the studio couldn’t drive those customers to theaters for special events. And there’s no reason Crunchyroll and Sony couldn’t, say, team up with local Barnes and Nobles—which tend to have massive manga sections these days—to get book-buying consumers into theaters (or turn theatrical patrons into book-buying customers via in-store comic stands). If the Alamo in your neighborhood isn’t sponsoring high school anime clubs by the end of next year, they’ll have missed an opportunity.

I understand that there are concerns about vertical integration; I empathize with worries that a studio taking over the Drafthouse, in particular, could alter the character of both the theaters (with their strict no-talking policy) and its festival, Fantastic Fest. But exhibition is in a tough spot, and it’s not entirely clear to me that this segment of the entertainment industry can survive without serious buy-in from the studios that make the movies that play in theaters.

Now if Sony could just see about working with the franchisee to get the Dallas-area Drafthouses open again, I’ll be a much happier camper.

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I hope you check out this week’s bonus episode of Across the Movie Aisle, in which we discuss the resurgent Will Smith: a walking, talking, cons and nons segment. It’s only available to paid members of Bulwark+; if you’re not a member, get a free month here and check it out.

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Links!

This week I reviewed Inside Out 2, which is … fine, though a little empty. Kind of like life? Maybe it’s the perfect movie after all!

Alyssa, Peter, and I discussed Bad Boys: Ride or Die, the fourthquel in the Bad Boys series. Is it the best of them? Well, no. Which is? Well … scroll down a bit.

I really enjoyed Tokyo Vice, so I hope the creative team is able to find someone who is willing to pick it up for a third season. That said: I think they did a pretty good job of dealing a complete, two-season story, so if it doesn’t come back, well, I won’t shed too many tears.

Jonathan Majors received something called the “Perseverance Award” from something called the “Hollywood Unlocked Impact Awards,” and I think it’s about time that someone won an award for persevering through, let me check my notes here, getting charged with violent crimes.

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Assigned Viewing: Bad Boys II (Hulu)

‘Bad Boys II’

The other day on Across the Movie Aisle we were talking about the difference between bad movies and trashy movies. I want to highlight Bad Boys II as one of the trashiest movies of all time, maybe the apotheosis of cinematic trash. It’s the sort of picture you could see a guy like John Waters making if he was given $100 million and a second unit director like Bay to handle action.

I mean, this is a movie where there’s an extended shot of two rats having intercourse, another sequence in which corpses fly out of the back of a refrigerator van and are driven over by the heroes, and one more in which a hero climbs onto a gurney and hides next to the body of a woman who has been, um, surgically enhanced. Product placement litters the landscape like a Mad Men fever dream; all of this takes place amidst Miller Genuine Draft and Pepsi signage. And the whole thing culminates in an extra-military invasion of Cuba featuring a Hummer smashing through a favela in the hopes of delivering our heroes to the promised land of … Gitmo.

Did I mention that this film was shot mere months after 9/11 and released not even two years after the towers fell?

Again: the whole thing is an exquisite monument to bad taste, and I’m frankly kind of shocked it exists at all. I realize Bad Boys II will not be to everyone’s taste—lord knows critics at the time hated it—but as an unvarnished window into director Michael Bay’s id, it is a fascinating historical document.