AT&T-owned WarnerMedia’s decision to simultaneously show Warner Bros. movies in theaters and on HBO Max next year is drawing skepticism from industry analysts who doubt the company’s plan will bring the desired results.
Analysts estimate AT&T will need at least 6 million new HBO Max subscribers to make up for the expected $800 million to $1 billion loss in box office sales so far this year. Analysts at MoffettNathanson place the target even higher — 8.4 million new subscribers.
Film studio Warner Bros.’ announcement Thursday was heralded as a seismic shift for the Hollywood film industry. Like other movie makers, it has struggled to release new content over the course of the pandemic.
The decision to add the releases to streaming service HBO Max’s lineup for one month at no extra cost to subscribers comes after disappointing sales from action-thriller Tenet’s theatrical release earlier this year.
HBO Max was slow to add subscribers out of the gate, but new release feature-length films could add serious value to the underperforming streaming service, according to Bloomberg Intelligence analysts.
The movie slate could even secure HBO Max a position as the third-largest streaming service in 2021 behind Netflix and Disney, those same analysts said. HBO Max has less than 9 million subscribers, according to Deadline.
The list of at least 17 releases that’ll be available to HBO Max subscribers includes Dune, a new Matrix film and The Suicide Squad, all of which are expected to be among next year’s top movies. AT&T had already planned to use the simultaneous-release strategy with Wonder Woman 1984, which debuts on Christmas Day.
The ability to watch new releases from the safety of your home during a pandemic may please viewers, but the implications for the movie theater industry are anything but rosy.
Theater chains AMC and Plano-based Cinemark, both reeling financially from theater closures and a lack of new releases, each responded to WarnerMedia’s move.
“In light of the current operating environment, we are making near-term booking decisions on a film-by-film basis. At this time, Warner Bros. has not provided any details for the hybrid distribution model of their 2021 films,” a Cinemark spokesperson told WFAA.
AMC’s criticism was sharper.
“Clearly, WarnerMedia 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 startup. As for AMC, we will do all in our power to ensure that Warner does not do so at our expense,” president and CEO of AMC Entertainment Adam Aron told the Hollywood Reporter. “We will aggressively pursue economic terms that preserve our business.”
AMC and Cinemark have remained partially open during the pandemic by showing throwback films at reduced occupancies. Previously optimistic about a return to normal in 2021, Cinemark saw a 96% drop in revenue in the third quarter of this year….
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