Koster & Bial were both born in Germany in the 1840s and immigrated to the US in the early 1860s. The two men met, apparently for the first time, in 1869 when Koster hired Bial to work for him in his restaurant at Park Row and Worth St. A year later Bial and Koster became partners in a restaurant on the East Side. Soon afterward they opened other restaurants in the area. In 1873 they entered the beer-bottling business, and in 1875 they opened a restaurant in the Tribune Building near City Hall. Their music hall enterprises began in 1879.
from wikipedia
Koster and Bial's Music Hall was an important vaudeville theatre in New York, famous in cinema history as the site of the first public exhibition of the Vitascope on April 23, 1896. It was located at Broadway and Thirty-Fourth Street, where Macy's flagship store now stands.
Although primarily remembered now as the birthplace of the movies as we know them, both it and its predecessor, Koster and Bial's Concert Hall, were major vaudeville venues and an important part of the New York theatrical scene.
Koster and Bial's Music Hall was the successor to Koster and Bial's Concert Hall. That earlier establishment was located on 23rd Street. At that location, Koster and Bial had taken over Bryant's Opera House, a venue for minstrel shows. They offered food and drink along with vaudeville, circumventing a law against serving alcohol in theatres by replacing the curtain with a folding fan.
The last Koster and Bial's Music Hall originated when they moved uptown into the former Manhattan Opera House, a huge theatre built in Herald Square in 1892 by Oscar Hammerstein I in pursuit of his passion for grand opera. Quickly running into financial problems, Hammerstein decided to convert his theatre to a vaudeville format. He offered Koster and Bial a partnership under which he would manage the entertainment and they would manage the food. The new Koster and Bial's Music Hall opened on August 28, 1893 and proved to be very successful. Hammerstein however quarreled with his partners and lawsuits ensued. Ultimately Koster and Bial bought out Hammerstein and operated the theater solely on their own. The theatre finally closed in 1901 and was demolished to make way for Macy's Department Store.
I think this picture is actually of one of Koster & Bial's restaurants. According to Bial's obituary in the Times (1897), "In 1869 [Bial] entered the employ of John Koster, whose place was on the corner of Park Row and Worth Street... [in 1879] they conceived the idea of establishing a concert hall" (http://query.nytimes.com/gst/abstract.html?res=F70E1FF93D5C12738DDDAC0994D0405B8785F0D3) The obituary mentions several restaurants they established in the interim.
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