Warner Bros., one of Hollywood’s biggest studios, plans to release all of its major movies next year in theaters and on HBO Max at the same time, a dramatic change that shows just how much Covid-19 and the streaming have disrupted the industry.
The 17 films affected by the change include the new episode of the franchise “The Matrix”, the Lin-Manuel Miranda musical “In the Heights” and the DC Comics superhero feature “The Suicide Squad”. Each movie will air on the HBO Max streaming platform for one month at no additional cost – an approach the AT&T division was already planning the launch of “Wonder Woman 1984” on Christmas Day.
Such a move would have been considered unthinkable a year ago, but the pandemic has shattered industry standards. Theaters traditionally have exclusive rights to films for up to three months, an arrangement they have vehemently championed. Now – with Covid-19 still raging in the United States and much of the world, and theaters closed or uncrowded – studios are taking increasingly dramatic steps to protect their investments in potential blockbusters .
The ad criticized shares of theater chains, including industry leader AMC Entertainment Holdings Inc. Its stock plunged 16% to $ 3.62 in its worst intraday decline since Oct. 14. Cinemark Holdings Inc. fell 16%.
“We know that new content is the cornerstone of theatrical exposure,” said Ann Sarnoff, CEO of WarnerMedia Studios. “But we have to balance that with the fact that most theaters in the United States will probably be running at reduced capacity throughout 2021.”
The new model could quickly increase signups to HBO Max, a cornerstone of AT & T’s WarnerMedia long-term strategy. The platform launched this year, entering a crowded area that includes Netflix Inc. and Walt disney Co.’s Disney +. While pandemic lockdowns have helped fuel the growth of industry-wide online services, AT&T is under pressure to show it can move into the age of streaming.
Warner had to compensate some of the biggest movie chains for their decision to put the new “Wonder Woman” movie on HBO Max the same day it hits theaters. It is not yet clear what deal they could possibly make for the 2021 films, but any deal will be important to their survival. Year-to-date ticket sales are down 78% to $ 2.2 billion, according to research firm Comscore Inc., leaving many theaters bankrupt. This compares to over $ 10 billion at the same time a year ago.
Theater operators have suggested it is best to release new films, even on less favorable terms than they previously enjoyed, to sell tickets as they attempt to recover from the effects of the pandemic. The alternative is to allow studios to skip theatrical tours entirely and put their new content exclusively online. Already, the chains have made significant concessions, which will likely last a long time beyond the pandemic.
Universal Studios, a unit of Comcast, has reached an agreement with three major movie chains to reduce the time between a movie’s premiere in theaters and when it can be sold to audiences online for $ 20. Previously, the studio had to wait over two months, and now it only has to wait 17 days. Disney has also experimented with online versions. He released “Mulan” on Disney + while showing the film in theaters overseas. But the entertainment giant hasn’t made any formal, radical new arrangements with cinemas.
Jason Kilar, CEO of WarnerMedia, said the important thing is getting the movies out to the public.
“Our content is extremely valuable, unless it’s on a shelf and not seen by anyone,” he said in a statement. “We believe this approach serves our fans, supports exhibitors and filmmakers, and enhances the HBO Max experience, creating value for all.”
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