Located in Bourke Street between Swanston and Russell streets, the Academy of Music was opened in November 1876 under the management of G. W. B. Lewis. Designed by architects Read and Barnes, and built by Melbourne alderman Joseph Aarons, the hall comprised three and a half tiers of seating in the gallery (for up to 1500 patrons) and a billiards saloon alongside.
In 1880, not long after actor/manager W. H. Lingard, was sued by W.S. Gilbert and Arthur Seymour Sullivan for having produced an unauthorized production of their H. M. S. Pinafore operetta there, the venue was renamed the Bijou Theatre by the then lessee, Eduardo Majeroni. W.J. Wilson was also associated with the venue in the mid-1880s. Majeroni and Wilson's Grand Comic Opera Company staged, for example, Luscombe Searelle's Bobadil there in 1885. The Bijou also served as a home base for the Brough and Boucicault Comedy Company for a number of years.
In 1888 the Palace Hotel was built on the opposite side of the Victoria Arcade, with that establishment also incorporating a hall which the management used for social and community events. Both buildings and the arcade were destroyed by fire the following year, however. Within 12 months they were replaced by a second Bijou Theatre and a smaller, purpose-built vaudeville house called the Gaiety. A new Victoria Arcade was also erected, thereby providing both venues with a joint vestibule.
[Source: Australian Variety Theatre Archive]