Early on, the industry's key executives knew that big changes were underway. Shortly after its 1982 purchase of Columbia Pictures, the Coca-Cola Co. stated:
The entertainment business in general and the motion picture business in
particular are undergoing significant changes, primarily due to technological
developments which have resulted in the availability of alternative forms of
leisure time entertainment, including expanded pay and cable television,
video cassettes, video discs and video games. During the last several years,
revenues from licensing of motion pictures to network television have
decreased, while revenues from pay television, video cassettes and video
discs have increased. However, the level of theatrical success remains a critical
factor in generating revenues in these ancillary markets.1
Coke's interest in the revenue potential of alternative leisure markets led to its acquisition of Columbia and motivated its willingness to invest significantly in filmed entertainment as an area complementary to its soft drink operations.
Alan J. Hirschfield, former head of Columbia and 20th Century-Fox, emphasized the importance of the 1980s for the Hollywood industry. Speaking in 1990, after the industry had negotiated the absorption of the new delivery systems, seen the restructuring of its relationship with the exhibition sector, fought a series of format wars, and been married to a variety of new corporate partners, he noted, "It's been a period of the most dramatic change in the history of the industry.
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