The theater chains annoyed by Warner Bros. ” Direct move to streaming

Photographer: Alex Scott / Bloomberg

Theater channels such as AMC Entertainment Holdings Inc. and Cinemark Holdings Inc. retaliates against Warner Bros. after the studio revised their film release strategy and brought their shares down.

Adam Aron, CEO of AMC, said he has opened an “immediate and urgent dialogue” with the studio, which has announced plans to debut all of its major 2021 movies simultaneously on HBO Max and in theaters. Shares of AMC and Cinemark, already beaten in 2020, each plunged more than 16% each on Thursday.

Aron, who runs the world’s largest theater chain, asked why the studio would make such a move as drug companies are set to release a Covid-19 vaccine. Cinemark, meanwhile, said Warner Bros. had not provided any details of his plan and had indicated that he might not show some of the studio’s films.

“In light of the current operating environment, we are making short-term, film-by-film booking decisions,” Cinemark said.

The decision of AT&T Inc.’s WarnerMedia, which operates Warner Bros. and HBO Max, threatens to widen a divide in the film industry that opened earlier this year. After theaters closed in March due to the Covid-19 pandemic, studios were forced to delay their films or launch them online.

Cinema owners have generally expressed a desire that studios withhold new films until theaters can reopen widely, preserving a decades-old release model that gave them exclusive rights. Studios have already delayed many of their biggest films, but they are reluctant to allow ready-made blockbusters to collect dust until the pandemic is over.

AT&T is also trying to bolster HBO Max, a streaming platform that launched in May. He had previously planned to use the simultaneous release strategy with “Wonder Woman 1984,” which debuts on Christmas Day.

Friend to foe

Until this week, Warner Bros. was one of the studios closest to film exhibitors. It released the $ 200 million sci-fi thriller “Tenet” exclusively in theaters in September, marking the only big-budget theatrical debut since the pandemic hampered the industry.

After Thursday, the studio is perhaps one of the most vilified.

“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,” Aron said in a statement. sent by email. “As far as AMC is concerned, we will do everything in our power to ensure that Warner does not do this at our expense.”

But the disruption has already taken its toll. AMC shares fell 16% to $ 3.63 on Thursday, with Cinemark down 22% to $ 13.30.

Even after Warner Bros. The industry’s decision to release “Wonder Woman 1984” on HBO Max, the plan to take the same approach for the whole of 2021 slate has shocked the industry. In the case of “Wonder Woman,” the studio discussed the decision with theaters ahead of time and offered them a bigger cut in ticket sales in exchange for dropping a traditional release. Typically, theaters have exclusive rights to new movies for around 90 days.

Now, new conditions will have to be worked out amid potentially heated negotiations.