The Academy of Music was built by movie mogul William Fox and opened in The theater was created to fill the gap left by the demolition of its original counterpart across 14th Street at Irving Place. It was one of the major movie theatres in the Union Square entertainment district. With the demise of the legendary Fillmore East in , the Academy of Music found new life as the premier mid-range venue for rock and roll music. It was great to be on the upper levels and get to touch the decorations and cornices that had been so high above me, the same ones I had stared at as a child. Alas, these stories never have happy endings.
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Horace Greeley disliked The Academy of Music so much, he asked how much it would cost to have it burned, and said "If the price is not unreasonable, have it done and send me the bill. The Academy was rebuilt and remained popular for decades, but as the neighborhood changed in the early 20th century, upper class audiences drifted uptown. The auditorium was used as a vaudeville and film house until its demolition in Cinema Treasures: New York City's first Academy of Music spanned two centuries, opening wih grand opera in and being operated by William Fox from until demolition in The original seating capacity was reported as 4,, but after a serious fire in , the theatre went through a series of rebuildings and renovations that gradually reduced it to about 2, When William Fox first took over the Academy's lease, he presented only stage plays with a resident stock company. As soon as feature-length movies became the vogue, Fox switched to films, supporting them with vaudeville to counter fierce competition from neighboring theatres. Fox also moved the entrance from Gramercy Place to 14th Street, which provided more space and better visibilty for the marquee and other electric signs. When the Consolidated Gas Company purchased the site for an addition to its nearby headquarters, William Fox built a new theatre directly opposite at E.
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The 4,seat hall opened on October 2, The review in The New York Times declared it to be an acoustical "triumph", but "In every other aspect The Academy's opera season became the center of social life for New York's elite, with the oldest and most prominent families owning seats in the theater's boxes. The opera house was destroyed by fire in  and subsequently rebuilt, but it was supplanted as the city's premier opera venue in by the new Metropolitan Opera House — created by the nouveaux riches who had been frozen out of the Academy — and ceased presenting opera in , turning instead to vaudeville. It was demolished in to make way for the Consolidated Edison Building. The Academy of Music has been described as "the first successful dedicated opera house in the United States,"  but it was not the first building in New York designed specifically for opera.