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Warner Bros disrupts theatrical business with same-day streaming

LOS ANGELES (Reuters) – AT&T Inc’s Warner Bros. studio will launch all of its 2021 movies in theaters and on the HBO Max streaming service on the same day, the company said on Thursday, in an unprecedented change that has hammered stocks of cinema operators in difficulty.

The films, which are expected to include “Godzilla vs. Kong” and “The Suicide Squad,” will be available on HBO Max for one month from the day they hit theaters, the studio said in a statement.

“Mortal Kombat”, a new version of “Dune” and a sequel to “Matrix” are also expected to follow the new release pattern.

Shares of AMC Entertainment, the world’s largest cinema operator, fell nearly 16%, and rival Cinemark fell about 22%. AT&T shares closed slightly.

The change, spearheaded by WarnerMedia CEO Jason Kilar, was the most aggressive move yet to bring movies into homes sooner, and it sent Hollywood a shock. Theaters have long resisted attempts by studios to shorten the time that theaters can exclusively feature new movies.

Kilar, a former Inc executive and founding CEO of Hulu, took over AT&T’s media division in May and restructured the businesses to focus on HBO Max, the company’s new competitor to Netflix Inc.

Warner Bros executives said the strategy was prompted by the coronavirus pandemic, which has limited movie theater releases and kept many theaters closed, and would remain in effect for a year.

“We know new content is the lifeblood of theatrical exposure, but we have to balance that with the reality that most theaters in the United States will likely be operating at reduced capacity throughout 2021,” Ann said. Sarnoff, president and CEO of WarnerMedia Studios and Networks Group. .

For consumers, watching at home could cost less than a trip to the theater. HBO Max charges $15 per month, while the average cost of two movie tickets in the United States reached $18.32 in 2019, according to the National Association of Theater Owners.

Cinema operators did not embrace the plan. AMC CEO Adam Aron said Warner Bros. was sacrificing its movie studio profits to boost HBO Max, adding, “we’ll do everything in our power to ensure Warner doesn’t do it at our expense.” .

“We will aggressively pursue economic conditions that preserve our business,” Aron said in a statement.

A Cinemark representative said Warner Bros. has not shared details of its plan and will be making short-term booking decisions “on a film-by-film basis”.

Theater chains have been devastated by the pandemic and forced to lay off workers and borrow funds to stay afloat. Small chains are lobbying for help from the US government.

Cinemark and AMC have struck deals with Comcast Corp’s Universal Pictures to show films that will be made available for home viewing as early as 17 days after they hit theaters.

Walt Disney Co has moved some movies from theaters to its Disney+ streaming service. The company is expected to unveil details of its streaming plans on December 11.

Reporting by Lisa Richwine; Editing by Nick Zieminski, Alexandra Hudson and Tom Brown

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