What will Sony do with Alamo Drafthouse?

What does Sony have planned for the dine-in theater chain Alamo Drafthouse? Roth MKM Managing Director Eric Handler says he has some clues.

On June 12, Sony Pictures Entertainment announced it had acquired Alamo Drafthouse Cinema.

“We are beyond thrilled to join forces with Sony Pictures Entertainment to expand our company vision to be the best damn cinema that has ever, or will ever, exist now in ways we could only ever dream of,” said Alamo founder Tim League. “They have a deep respect and understanding of cinema’s ability to both drive growth and create lasting cultural impact which aligns perfectly with everything Alamo Drafthouse stands for.”

Handler says he thinks Sony has “experiential aspirations”.

In our view, Sony’s announced acquisition of Alamo Drafthouse Cinema is not so much about the $100bn company wanting to operate a subscale cinema operation, but instead is about accelerating the buildout of a broader local-based entertainment platform,” he wrote. “That’s not to say Sony won’t continue to maintain Alamo Drafthouse’s presence as a destination movie house. Longer term though, Sony is likely looking to provide a more diversified, branded, experiential offering to consumers. As such, this transaction is unlikely to lead to further cinema industry consolidation.”

Handler says this might be a tie in to “Wonderverse”, Sony Picture’s first “immersive entertainment destination”, which it launched in Chinago last November.

“Over the next two to three years, we believe Sony could gradually transition the financially distressed Alamo Drafthouse cinemas into hybrid, Wonderverse locations, ” the analyst wrote. “A key benefit of the Alamo Drafthouse cinemas is excellent locations in attractive markets. It is possible Sony could transform several of a facility’s screening rooms into alternative entertainment experiences, attractions/rides and provide consumers with a greater number of usage options per location. Branding opportunities could prove significant. Beyond the brands mentioned in the previous paragraph, Sony’s IP includes Wheel of Fortune, Jeopardy, The Karate Kid, Men in Black, The Smurfs, SWAT, God of War, Gran Turismo, and The Last of Us. In addition, given Sony’s strength in video games, it could switch a screening room into an e-gaming arena. Also, because of its ownership in Crunchyroll, it could dedicate certain screening rooms to anime content.”