The fall in the shares of the major movie chains reflects well the fear caused by the decision of Warner and HBO Max to release their major films simultaneously. AMC left 16%, Cinemark 22%, Marcus Corp. 13% or Imax 8%, only during yesterday.
From ‘Wonder Woman 1984’ or ‘Matrix 4’ to ‘Dune’ and ‘Space Jam: A New Legacy’. A total of 17 films that will be “offered to consumers, giving them the choice and the power to decide how they want to enjoy them,” explains Jason Kilar, CEO of WarnerMedia. A risky and unprecedented bet that leaves theaters in question.
HBO Max isn’t the only one taking this path. Disney + was encouraged to charge 21.99 euros for ‘Mulán‘ (now free) and the new Pixar, ‘ Soul ‘, has decided to skip theaters to go directly to Disney +. It is only the beginning of a model change, but it is not clear if it is a temporary strategy or it will mean the end of the exclusivity of the blockbusters in theaters .
Ann Sarnofff, CEO of WarnerMedia Studios, tried to take the edge off the issue: “Nobody wants movies to return to the big screen more than we do. We know that new content is the lifeblood of theatrical display, but we have to balance this with the fact that the majority of theaters in the US will likely be operating at reduced capacity during 2021. ” Cinemas continue to be the great ally of production companies and despite experiencing a critical situation , their reopening has a profound impact on the calendar of major releases.
The HBO Max or Disney + thing is a conjunctural strategy according to the cinemas
It is the war of Disney + and HBO Max. We understand that uncertainty is in the American market, in Europe there is not so much because the evolution of Covid is doing much better than there, where they are late. “
“They are making decisions that we do not like,” they explain from the FECE. They do not know if it will end up spreading to Europe, a decision that “is made in the US and affects the world in a cascade”. “We understand movie theaters as the best way to see a movie. We cannot make a forecast, because most likely it does not correspond to reality because we do not have information,” explains de Benito.
“Before, in the pre-covid stage, very high levels of investment were being made to improve the rooms. With 4DX rooms , ScreenX, premium seats … to improve the value of the experience. And that will be the line that will continue and be He will continue to defend. It is not only the movie, but the experience of a movie theater.”
“The traditional model is that a film was released in cinemas and then after 3 or 4 months on another medium. Now it is a platform, before DVD or VHS,” explains the spokesman. “It is a model that has worked around the world for many years and it works. Economically, it is the one that gives the most performance to all the players in the industry.”
“The model is not in doubt and it is not believed that there is an alternative that gives the same performance of the current window, for all the actors,” they explain. “We count that in the coming years there will be more performance. The current Covid-19 scenario generates so much uncertainty that it cannot be extrapolated to a normal scenario . Last year we had the best spectator data of the last 10 years, with a constant growth trend in the last 6 years. Cinema was on the rise until the Covid arrived.”
Is it then a decision solely motivated by the pandemic? “It is on the one hand because of Covid and on the other because of the war of the platforms. There is a new model, where the distributors want to enter and now we are about to see who stands out in that race. And the way is power and stand out with content in exclusive “, they explain from the FECE. “But the question is, what is more profitable? And today the most profitable thing is to train in cinema and follow the current window model.”
Warner and HBO Max: Theaters wait, but some responses start to have a more aggressive tone
It is not being an easy situation for theaters. Precisely in mid-August, the US Justice Department recognized that the film industry had moved towards unthinkable formulas and opened the door for Disney or Netflix to take over movie theaters.
According to Jaume Ripoll, co-founder of the streaming platform Filmin, the change will be permanent and other distributors will follow in the footsteps of HBO Max. For the editorial director of the platform, cinemas need festivals more than ever.
The response from Adam Aron, CEO of AMC, has been blunt: ” Clearly, Warner Media intends to sacrifice a considerable portion of the profitability of its motion picture studio division , and that of its production partners and filmmakers, to subsidize its launch of HBO Max. As for AMC, we will do everything in our power to ensure that Warner does not do so at our expense. We will aggressively seek financial terms that preserve our business. We have already initiated an immediate and urgent dialogue with Warner’s address on this issue. “
We will have to wait how Warner and HBO Max evolves and if the cinemas can reopen. It will be then when the decision of these large companies can be analyzed in detail. If users continue to attend cinemas, it is foreseeable that they will continue to have the strength to maintain this exclusivity. If, on the other hand, the pandemic continues and users decide to watch the premieres at home, it is likely that theaters will definitely lose their window model.