At Bloomberg.com, Kelly Gilblom reports on Warner Brothers’ plan to release its movies on HBO Max (an AT&T owned company) at the same time that it releases them to movie theaters. Gilblom writes:
Warner Bros., one of Hollywood’s biggest studios, plans to release all 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 streaming have disrupted the industry.
The 17 films affected by the shift include the new installment of the “Matrix” franchise, the Lin-Manuel Miranda musical “In the Heights,” and the DC Comics superhero feature “The Suicide Squad.” Each movie will run on the HBO Max streaming platform for one month at no additional charge — an approach that the AT&T Inc. division was already planning for the debut of “Wonder Woman 1984” on Christmas Day.
Such a move would have been considered unthinkable a year ago, but the pandemic has obliterated industry norms. Theaters have traditionally had exclusive rights to films for up to three months, an arrangement they’ve defended vociferously. Now — with Covid-19 still raging across the U.S. and much of the world, and theaters either shuttered or thinly attended — studios are taking increasingly dramatic steps to protect their investments in would-be blockbusters.
The announcement slammed shares of theater chains, including industry leader AMC Entertainment Holdings Inc. Its stock dove 16% to $3.62 in its worst intraday slide since Oct. 14. Cinemark Holdings Inc. dropped as much as 16%.
“We know new content is the lifeblood of theatrical exhibition,” said Ann Sarnoff, chief executive officer of WarnerMedia Studios. “But we have to balance this with the reality that most theaters in the U.S. will likely operate at reduced capacity throughout 2021.”The new model could rapidly increase signups to HBO Max, a cornerstone of the long-term strategy for AT&T’s WarnerMedia. The platform launched this year, entering a crowded field that includes Netflix Inc. and Walt Disney Co.’s Disney+. Though pandemic lockdowns have helped fuel industrywide growth for online services, AT&T is under pressure to show it can transition to the streaming era.