U.S. Markets open in 8 hrs 21 mins

Tiny theater chain wins big by showing Sony’s 'The Interview'

Rick Newman
Tiny theater chain wins big by showing Sony’s 'The Interview'

When your competitors zig, zag.

That ancient business advice has found fresh meaning now that Alamo Drafthouse, a small theater chain with just 20 outlets in 10 states, has manned up and made a deal with Sony (SNE) to show its film The Interview starting on Dec. 25—the film’s originally scheduled release date.

The Interview, of course, is a goofy comedy starring Seth Rogen and James Franco as two journalists recruited by the CIA to assassinate North Korean dictator Kim Jong Un, which would never happen in real life. It’s also part of a bigger geopolitical drama in which North Korea seems to have retaliated for the film by hacking into Sony’s computer system and publishing a trove of material deeply embarrassing to Sony, which also would never happen in real life.

Except that North Korea seems to exist somewhere between reality and fantasy, which is why it declared the film an “act of war” and apparently conducted an unprecedented cyberattack on a western corporation. North Korea is also the lead suspect responsible for threats of terrorism that prompted every big U.S. theater chain to invoke the storied American motto, “please tread all over me,” and refuse to show the movie, as North Korea wished.

That courageous retreat by five big theater chains-- Regal (RGC), AMC (AMC), Cinemark (CNK), Carmike Cinemas (CKEC) and Cineplex (CGX.TO)—prompted Sony itself to pull the film last week, making the studio an instant target for furious free-speech advocates. Even President Obama called Sony’s capitulation a mistake. But Sony insists it planned to release the film all along, and just needed some distribution partners willing to show it.

Alamo and a group of independent theaters known as Arthouse Convergence raised their hands, and once the big corporate chains had run away and disappeared, Sony sized up its smaller partners and decided, they’ll do. Sony has now redeemed itself by agreeing to distribute the film to any theater willing to show it, and by pledging to release the film through a video-on-demand arrangement it hasn’t yet spelled out. When the news broke, Rogen, the movie's co-director and star, went to Twitter to celebrate the move as a win for freedom:

The terrorism threats came last week from a group calling itself “Guardians of Peace” that warned of 9/11-style attacks should the movie be shown. The government deemed the threat not credible, but Regal, AMC, Cinemark, Carmike and Cineplex caved anyway. The independents, by contrast, said they’re not intimidated. “We understand there are risks involved in screening The Interview,” they wrote as part of a petition on Change.org asking Sony to let them show the film. “We will communicate these risks as clearly as we can to our employees and customers and allow them to make their own decisions, as is the right of every American.”

So while Big Theater was turning tail, a bunch of Mom and Pop operators fought for their right to do business as they wish. It’s a particularly shrewd move for Alamo Drafthouse, which protested the initial Sony decision by planning to show another movie spoofing North Korea, Team America: World Police, instead. Alamo epitomized the spirit of defiance many Americans felt over the issue at precisely the moment its craven corporate competitors abandoned that spirit.

For those not familiar with Alamo, the Austin, Texas-based chain improves on the traditional sticky-floor, overpriced-junk-food movie experience by offering table service, cocktails and restaurant food at its showings. It also enforces a strict code of etiquette that emphasizes watching films—actually watching—and bans chatting, texting and other disruptions. In 2013, CEO Tim League called out Madonna on Twitter after customers at a show complained about her texting during a movie and berating a patron who asked her to stop. If Alamo is willing to take on Madonna, Kim Jong Un is surely out of his league.

Rick Newman’s latest book is Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.