The Paramount Corporation Alabama Theater, Birmingham Alabama

The mid 1920s was the most productive period for movie production companies. These companies produced and distributed films, and also moved into theater ownership, which, in turn, increased their visibility. By 1930, the major studios in control were Paramount-Publix, Fox-Loew, Warner Bros., and RKO. Between them they owned approximately twenty-five hundred to three thousand theatres in the United States and Canada, each promoting its own productions. Movie historian Robert Sklar notes that, "for prestige purposes, all the big companies wanted their name on one of these theaters." This was usually found on the marquee or in the form of a large vertical sign. The companies also controlled the films shown in their houses. For example. Paramount theatres only allowed their own movies to be shown in their theaters, such as the Alabama Theatre; other theatres in town would not be allowed access to their films.

Paramount, headed by Adolf Zukor, was the most successful of the studio/theatre companies of the 1920s. It was considered the "biggest and the best" with over 1,100 theatres throughout the United States. Zukor started his ascent when he merged his Famous Players Film Company and the Lasky Feature Play Company along with the addition of several smaller Paramount production subsidiaries to form the Famous Players-Lasky Corporation. In 1924, he merged his company with a regional Chicago chain Balaban and Katz (B&K). These two companies transformed into what was known as the largest theatre circuit, the National Publix Corporation. Paramount-Publix houses were molded throughout the country, directed by Sam Katz out of a central office in New York. As historian, Maggie Valentine noted: "All advertising, promotions, prologues, design changes, architecture, and even the ushers' uniforms were determined by the central office and carried the Publix logo. As their ad in Variety said, 'You don't need to know what's playing at the Publix House. It's bound to be the best show in town.'"

Sklar recognized that the palaces were, however, often "white elephants" and that "movies alone could not bring in enough revenue to meet their heavy expenses." Theatre owners kept revenue coming in by hiring live performers. Usual programs included vaudeville and variety acts along with a full orchestra to accompany the films; a reversion to the past decade, when movies began to take over vaudeville programs. Another financial obstacle for the theatre owners/movie studios was the introduction of sound. This required remodeling and equipment upgrades, which meant a loss in revenue if "talkies" were not successful. For a while, the "talkies" brought financial stability to movie palaces, because people were going to see new technology at work. With the boom in sales, theatre owners no longer needed to rely on live performances and orchestras. The advancements eventually took their toll by the late 1930s, as evidenced by the number of large city theatres that went bankrupt due to the increase in production cost and the popularity of the neighborhood theatres. These smaller theatres were more convenient to the patrons; they did not have to come into the city to see a movie. To make up their losses, theatre companies took control of smaller companies consolidating into one large company. For example, Loew's took over two major studios producing subsidiary Metro-Goldwyn-Mayer, and Warner Bros, acquired Stanley Company of America. By 1933, the Depression too took its toll on the movie industry. Paramount, along with Fox, went bankrupt because they were "overextended in debts and commitments, in Paramount's case through the acquisition of theatres." Paramount was forced into selling off their theatres; most of the southeastern theatres were transferred over to the Wilby-Kincey corporation.

The theatres of the 1930s presented a stark contrast to those of the 1920s. The movie palaces of the 1920s attracted their patrons by allowing them to get a sense of how the wealthy lived through the use of elaborately ornamented buildings. By the 1930s, in a form follows function mode, architecture began to reflect the advanced technology utilized in movie production, which in turn became the draw. Theatres were streamlined in design, utilizing new building materials and technology. New building materials and technology consistently affected design for acoustics, sightlines, and efficient heating and cooling. At that time, exterior and interior design reflected this concern for functionality; both were streamlined, as dictated by the popular Art Deco style.

In the 1930s, pattern books were put away, and architects streamlined designs for all types of buildings. The drama and romance of the 1920s had subsided, hardened by the realities of the Great Depression, and simple more linear forms became the model. This new philosophy fit into the technological times; and with the Depression economy still lingering, costs were greater reduced by eliminating the elaborate decorative details. Designed strictly for film production, these theatres "differed inherently from live theatre, promoting innovation technology, machinery, and entertainment, not drama and tradition. Advertising for this new form tended to identify the equipment and the building rather than the film titles or actors' names." Decorative elements were further reduced as Art Deco ran its course, eventually leading up to the introduction of the International style; the most simplistic of the early twentieth century architectural forms. Writing in 1930, Sexton had the following to say about the new theatres: "....this modern theatre building should not be merely a copy of some ancient structure which was designed to serve an entirely different purpose in an age when social and political conditions were vastly different from what they are today. It is appropriate to copy a building only when similar conditions are to be satisfied."

According to Sexton and Betts, as theatre design developed along with the advancements in movie technology, it was stated that "the plan and other phases of the design of motion picture theatre is entirely dependent upon the technicalities by which the film is projected on to the screen." The design of the theatre buildings would more appropriately reflect the technology being utilized rather than merely being used for just aesthetic purposes.