AT&T-owned WarnerMedia stunned the entertainment world on Thursday when it announced its intention to put all 17 of its 2021 Warner Bros. movies on HBO Max on the same day each movie hit theaters.
The announcement reduced the shares of the film chain AMC (AMC) by 16%. And now AMC is responding.
“Clearly, WarnerMedia intends to sacrifice a significant portion of the profitability of its film studio division and that of its production partners and filmmakers to subsidize the launch of HBO Max,” AMC CEO Adam Aron said in a statement. sent to the media on Thursday night. “We will do our best to ensure that Warner does not do this at our expense. We will aggressively pursue economic conditions that preserve our business. We have already started an immediate and urgent dialogue with the Warner leadership on this issue. “
Despite the urgent dialogue, Aaron may not have much leverage against the backdrop of the growing era of live film. (Cinemark, for its part, only said it was “making short-term movie-based bookings. Warner Bros. has not currently provided any details on the hybrid distribution model of their 2021
AMC was forged by the pandemic and just this week submitted a proposal to the SEC to offer 200 million shares to raise $ 844 million as the last step in preventing bankruptcy.
Although movie theaters have reopened in much of the country (with mask rules, blocked social space and strict cleaning protocols), a survey by Yahoo Finance / Harris Poll last month found that 81% of Americans did not go. of film theater from March. More than half (56%) of respondents said they were concerned about receiving COVID-19; 20% say they fear that theaters will not be clean enough; and 12% say they don’t want to wear a mask during a movie.
They are all related to the pandemic, but another 22% say there is no movie in theaters they want to watch, and 19% say they prefer to stream movies at home.
Warner Bros., with its 2021 experiment, responded not only to the pandemic but also to the latter group. The WarnerMedia announcement put the stunning move as a “consumer-focused initiative,” and CEO Jason Killar (founder and former CEO of Hulu) said it would give consumers “the choice and power to decide how they want to enjoy these.” movies. We believe this approach serves our fans, supports exhibitors and directors, and enhances the HBO Max experience, creating value for all. “
Of course, the approach does not support exhibitors. The films will only air on HBO Max in the first month, after which they will leave the streaming platform and continue their theatrical performance, but anyone who wants to see one of the films will certainly want to watch in the first month and will be able to watch it at home on your couch (with a monthly subscription to HBO Max for $ 14.99) and skip the theater.
Movie theaters are losing ground to streaming options even before the pandemic accelerates the trend. There is now a legitimate concern that even after a pandemic, viewers may never return to cinemas at the same levels as before the pandemic. WarnerMedia’s new strategy can provide it if other studios follow suit. (What will Disney do? The company is holding its next investor day on December 10, and all attention will be focused on streaming.)
The traditional 70-day “theatrical window” between theaters (“exhibitors”) and studios had to fall victim to streaming wars. The studios no longer feel it is their responsibility to support the distributors of their films, as they invest billions in their own digital distribution platforms.
AMC has already signed a new multi-year deal with Universal in July, which narrows the window to 17 days of theatrical exclusivity in all Universal and Focus Features films. And AMC gladly agreed to the World Bank’s plan to put “Wonder Woman 1984” on HBO Max on December 25, the same date it will hit theaters.
But AMC never agreed to a deal for all 17 World Bank films in 2021, which will include long-awaited titles such as Dune, Matrix 4, In the Heights, and the Soprano prehistory film Saints from Newark. “
AMC CEO Aron sounds hopeful that COVID-19 vaccines will signal the end of the pandemic and the return of cinemas. “We expect that moviegoers will soon be able to enjoy coming to our theaters again without any worries,” he said, “watching the best movies in the world safely in their big places, with their big sound and on their big screens.” ”
There’s a good reason he repeats “big” so many times there. A science fiction epic like Dune simply won’t be the same experience at home on the couch as it is in a theater on a huge screen. But his hopes that vaccines will bring Americans back to theaters are also high.
Daniel Roberts is the editor-in-chief of Yahoo Finance and closely covers the current wars. Follow him on Twitter at @readDanwrite.
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