Extraordinary Warner Bros. Decision To Stream Its Films Might be Great for Couch Potatoes, But Fatal for Theaters
Movie theater owners have been living through one of the worst years ever, as their multi-billion dollar business has effectively vanished. And now their pandemic predicament has become about as terrifying as any Hollywood horror tale.
That’s because Warner Bros. is taking its entire slate of 17 films set for theatrical release next year and shifting them to its parent company’s nascent streaming platform, HBO Max, where the films will be simultaneously available for streaming and in theaters (both Warners and HBO are part of the media division of parent company AT&T).
That may be welcome news for many couch potatoes, who for the price of an HBO subscription will be able to stream everything in the studio’s lineup for the next year, including a new “Matrix” sequel, “Dune,” “In the Heights” and “The Suicide Squad.”
But it wasn't seen as good news on Wall Street. Minutes after Warners' announcement last week about its 2021 slate, the stock market price of big chains such as AMC and Cinemark plummeted.
Typically, theater owners will not book any movie that will appear on a streaming or pay-per-view site sooner than some three months after its theatrical debut. But that’s not the business model for companies such as Netflix, which prefer simultaneous releases, and it’s why the biggest theater chains wouldn’t show the streaming company’s “Roma” or “The Irishman.”
Ann Sarnoff, the head of WarnerMedia Studios, said this concurrent digital/theatrical model will only last a year and was necessitated by the pandemic.
Even if Warners’ 2021 titles (along with this month’s “Wonder Woman 1984”) run simultaneously at the multiplex, it’s hard to imagine a lot of customers risking a trip to a theater -- and forking out $8 for popcorn and $5 for a soda -- over the safety of their living rooms, where the snacks and drinks are a lot cheaper.
And the company's release strategy could signal a fundamental shift in how movies are distributed going forward, as other studios follow suit.
While the Warners decision was the most sweeping, other prominent distributors have pulled movies from planned theatrical releases and made them available digitally. Universal did so with its “Trolls World Tour” and “King of Staten Island” movies, and Disney followed suit with “Hamilton” and “Mulan.” Universal and Disney both have upstart streaming platforms: Peacock and Disney Plus.
On KPCC’s AirTalk on Monday, Greg Laemmle, the president and CEO of Laemmle Theatres, said the Warners decision will create more trouble for exhibitors who already have been “devastated” by the pandemic.
“It's going to create some increased competition, because people will have other options and not be forced into waiting for 90 days or some arbitrary number before they can see something at home,” Laemmle said. His chain has already been forced to sell some of its real estate to stay solvent.