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AT&T-owned WarnerMedia stunned the entertainment world on Thursday when it announced plans to put its 17 2021 Warner Bros. movies on HBO Max the same day each movie hits theaters.
The announcement caused the share of the cinema chain AMC (AMC) to drop by 16%. And now AMC is responding.
“Obviously, WarnerMedia intends to sacrifice a considerable portion of the profitability of its movie studios division, and that of its production partners and filmmakers, to subsidize its startup HBO Max,” said the CEO of AMC Adam Aron in a statement sent to media Thursday night. . “We will do everything in our power to ensure that Warner does not do this at our expense. We will actively pursue economic conditions that preserve our activities. We have already started an immediate and urgent dialogue with Warner executives on this matter.
Despite urgent dialogue, Aron may not have much weight in the era of ramping up direct-to-streaming movie releases. (Cinemark, for its part, only said it “makes short-term film-by-film reservation decisions. At this time, Warner Bros. has not provided any details on the hybrid distribution model for its 2021 films.” ”)
AMC has been hammered by the pandemic and this week it filed an application with the SEC to offer 200 million shares to raise $ 844 million, the last step to avoid bankruptcy.
Although theaters have reopened across much of the country (with mask rules, blocked seats for social distancing, and strict cleaning protocols), a Yahoo Finance / Harris Poll survey last month found that 81% of Americans did not go to the movies. theater since March. More than half (56%) of those surveyed say they are concerned about COVID-19; 20% said they feared theaters were not clean enough; and 12% said they did not want to wear a mask during a movie.
These are all pandemic concerns, but 22% said there was no movie in theaters they wanted to see, and 19% said they preferred to stream movies at home.
‘Consumer-centric initiative’
Warner Bros., with its 2021 experience, is responding not only to the pandemic, but to the latter group as well. WarnerMedia’s announcement touts the astonishing move as a “consumer-driven initiative”, and CEO Jason Kilar (founder and former CEO of Hulu) said it would give consumers “the choice and the power to decide how they want to enjoy these movies. We believe this approach serves our fans, supports exhibitors and filmmakers, and enhances the HBO Max experience, creating value for all.
Of course, the approach does not support exponents. The movies will only air on HBO Max for the first month and then leave the streaming platform and continue their run in theaters, but anyone keen to see any of the movies will definitely want to watch the first month, and she’ll be able to watch it at home on their couch (with a $ 14.99 monthly subscription to HBO Max) and skip the theater.
Theaters were losing ground to streaming options even before the pandemic dramatically accelerated the trend. Now, it is legitimate to fear that even beyond the pandemic, moviegoers will never return to cinema at the same level as before the pandemic. WarnerMedia’s new strategy could guarantee this, if other studios follow suit. (What will Disney do? The company is hosting its next Investor Day on December 10, and all attention will be on streaming.)
The traditional 70-day “theatrical window” between theaters (“exhibitors”) and studios was inevitably a victim of the streaming wars. Studios no longer feel responsible for supporting the distributors of their films, as they invest billions in their own digital distribution platforms.
AMC already signed a new multi-year agreement with Universal in July that reduced the window to 17 days for theatrical exclusivity on all Universal and Focus Features films. And AMC had happily accepted WB’s plan to put “Wonder Woman 1984” on HBO Max on December 25, the same date it hits theaters.
But AMC never agreed to the deal for the 17 WB movies in 2021, a list that will include highly anticipated titles like “Dune,” “Matrix 4,” “In the Heights,” and the prequel “Sopranos” “The Many Saints of Newark. “
AMC CEO Aron is optimistic that COVID-19 vaccines will mark the end of the pandemic and return to theaters. “We hope that moviegoers can soon rejoice again to come to our theaters without any worries,” he said, “watching the best films in the world from the safety of our large seats, with our great sound and on our big screens. “
There’s a good reason he says “big” so many times there. A sci-fi epic like “Dune” just won’t be the same experience at home on the couch as in a theater on a big screen. But his hope that vaccines will bring Americans back to theaters is also a big if.
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Daniel Roberts is a senior editor at Yahoo Finance and covers the streaming wars closely. Follow him on Twitter at @readDanwrite.
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