In a move that is almost certainly going to set off a devastating chain reaction for what's left of the movie theater industry, Warner Bros. has decided it is going to release its major movies next year in theaters and on HBO Max at the same time.
It could be the final death blow for a theater industry that has undergone severe stress due to the Covid-19 pandemic this year.
Included in the list of films for next year will be major features, like the next installment of the Matrix series and DC Comics movie "The Suicide Squad", according to Bloomberg.
Theaters used to have exclusive rights to films for up to three months, the report notes. But now, with most theaters either shut down or barren, studios are starting to shift their business models to protect the money they've invested in major films. Ticket sales are down 78% this year to $2.2 billion, according to Comscore.
Ann Sarnoff, chief executive officer of WarnerMedia Studios, said: “We know new content is the lifeblood of theatrical exhibition. But we have to balance this with the reality that most theaters in the U.S. will likely operate at reduced capacity throughout 2021.”
In addition to gouging theaters, the new model could increase signups to HBO Max, which is owned by AT&T. HBO Max is competing with well known streaming services, like Disney+ and Netflix.
Theaters have experimented with studios in trying to change their business model to adapt, as well. Several movie chains entered into agreements with Universal this year to narrow the time between movies hitting the theater and when it can be sold online. But we'll be surprised if theaters are able to do enough to offset what appears to just be the beginning of a dramatic shift that will pull new films out from their grasp heading into 2021.
And once the shift to streaming starts - despite whether or not we have a vaccine that works - we can't help but think that there's likely no chance that studios turn back to their legacy business models.
WarnerMedia’s CEO struck a tone of putting his business first, which could wind up leaving only breadcrumbs for theaters: “Our content is extremely valuable, unless it’s sitting on a shelf not being seen by anyone. We believe this approach serves our fans, supports exhibitors and filmmakers, and enhances the HBO Max experience, creating value for all.”
I got you something ✨nice✨ this year:— Warner Bros. Pictures (@wbpictures) December 3, 2020
🎁 The biggest movie premieres
🎁 In theaters and on HBO Max the exact same day
🎁 Beginning December 25 with #WonderWoman1984#HBOMax #WBPictureshttps://t.co/QA8MlErRYQ pic.twitter.com/VuYkTa6BGx