The two dominant companies of the presound era were Adolph Zukor’s Paramount Famous Players-Lasky and Nicholas Schenck’s Loew’s/MGM. We read over and over again that Zukor and Schenck were stupid businessmen —not interested in change, only in preserving the status quo. But that is a myth. They wanted to preserve their monopoly status; but they chose to let Warners and Fox experiment, and then decide on an appropriate strategy. Doing nothing is misleading. Zukor and Schenck were watching and learning. In this chapter, I argue that these crafty long-time movie moguls were well prepared-as they studied the reactions to the Vitaphone shorts, Fox Movietone newsreels, and then the blockbuster success of The Singing Fool. Indeed, they had made their move while The Singing Fool was still in production.