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...