Theater Owners Fear Warner Bros.’ Drastic Decision Signals an End for Cinemas

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Theater Owners Fear Warner Bros.’ Drastic Decision Signals an End for Cinemas

By Movieguide® Staff

With Warner Bros.’s recent decision to release 2021 blockbuster movies on the HBO Max streaming service in addition to theaters, theaters fear the move will only expedite a permanent collapse of cinemas across the US. 

“There’s no question that WarnerMedia is leveraging this pandemic moment, and making a decision for the future of their company by prioritizing streaming. The question is, at what cost to this art form?” Variety reported a C-suite executive at a rival studio asked.

Warner Bros., whose 2021 movie slate includes 17 movies, will still release the scheduled movies in theaters.  

However, the changes appear even more drastic after Universal Pictures’ milestone deal in July, which shrunk the exclusive theatrical window for movies to just 17 days.  

The format will mean blockbuster movies such as DUNE, MATRIX 4, and Lin Manuel Miranda’s IN THE HEIGHTS will stream free to subscribers on HBO Max for 31 days the moment the movies release in theaters.

While Warner Bros. assured exhibitors and entertainment businesses that they want to preserve the lasting tradition of big-screen viewership, popcorn, and soda, many theater owners were floored by how rapidly Warner Bros. changed direction. 

Exhibitors understood that WONDER WOMAN: 1984’s delay, which Warner Bros. announced would stream on HBO Max alongside its big-screen release this Christmas day, was due to the pandemic. However, many were not prepared to have Warner Bros.’s potential revival of the box office, by way of their 2021 lineup, pulled out from beneath them.  

“The year-long part was a little befuddling,” Mark O’Meara, who owns two movie theaters in Fairfax, VA, said. “They’re claiming it’s a COVID model. I think there’s some truth to that. But theaters are closing, and it’s getting tougher.”

Despite most larger movie theater chains’ silence on the matter, AMC’s CEO Adam Aron did not pull any punches.  

“Clearly, Warner Media intends to sacrifice a considerable portion of the profitability of its movie studio division, and that of its production partners and filmmakers, to subsidize its HBO Max start-up,” Aron said. “As for AMC, we will do all in our power to ensure that Warner does not do so at our expense. We will aggressively pursue economic terms that preserve our business.”

According to Variety, other theater owners remain optimistic and hope that other major studios do not follow suit. 

“If Disney follows this template in any capacity, movie theaters are done,” one film executive said.

Jeff Logan, who runs a small theater chain in South Dakota, said: “It’s like they aren’t listening to the news — or they are listening to three months-old newscasts. It doesn’t make sense when we’re on the verge of vaccines being distributed. To do it on one picture, I could understand. But the entire slate for the year made absolutely no sense.”

Logan continued: “I think things will get back to near normal faster than the Warner Bros. decision would indicate. They’re using this as a cover to push HBO Max. I would hope they would come to their senses sooner than after a year.”

Variety reported that the decision comes at a creative cost but also means instant economic benefit:

As game-changing as 2021 will be for Warner Bros. and the theatrical film business, the C-suite executive Variety spoke with said the Thursday bomb-drop comes down to one thing: Wall Street.

“This is AT&T justifying the billions they paid for Warners Bros,” the executive said. “This is bad for creativity and the long term, but is it good for their stock this week? Absolutely.”

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