Confident that a town the size of Cottage Grove could support two movie theaters, local movie entrepreneur William Morelock opened his new theater, the Diane, right across Main Street from his Arcade in the spring of 1937. The two theaters operated simultaneously for several decades until the Diane closed sometime in late 1958 or early 1959.
The Diane aimed to be a place for families to enjoy the popular films of the day. The Cottage Grove Sentinel advertised special Saturday programs for children with promotional strategies such as free comic books.
Other targeted programming included Star in My Kitchen, a "motion picture cooking school."
William Morelock was locally famous for shooting home movies of parades and other events around Cottage Grove and then showing them in his theaters. In 1938 "local news reel" of the school's May Day Festival screened at the Diane. Although ownership of the Arcade and Diane changed in 1955, the new proprietor still saw the audience appeal in local films, and showed movies shot at the town's car races.
