Warner Bros dropped a world-breaker of a bomb last night when the studio announced that it would be giving its entire 2021 film slate a simultaneous release in theatres and on HBO Max. This is a plan to give movie fans in the US – where COVID-19 is still raging and the majority of cinemas remain closed – the option of seeing their anticipated movies on the streaming service, while international markets where COVID is not as impactive don’t face additional delays. Sounds like a great plan, right? Wrong. Not according to AMC!
The world’s biggest cinema chain has been hit hard by the COVID-19 pandemic and is really not happy with WB’s strategy. A strategy that involves letting movies be available for the first 30 days of their release – the period when cinemas make most of their revenue on movies – for free to HBO Max subscribers. WB signed a deal with cinema chains to give them a much larger cut of ticket sales (up to 60%) but that was apparently a one-off agreement just for Wonder Woman 1984. And an incensed AMC Theatres CEO Adam Aron minced no words in his response to WB’s new plot twist.
These coronavirus-impacted times are uncharted waters for all of us, which is why AMC signed on to an HBO Max exception to customary practices for one film only, Wonder Woman 1984, being released by Warner Brothers at Christmas when the pandemic appears that it will be at its height. However, Warner now hopes to do this for all their 2021 theatrical movies, despite the likelihood that with vaccines right around the corner the theatre business is expected to recover. Clearly, Warner Media 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. We will aggressively pursue economic terms that preserve our business.
Continuing on, Aron explained that the theatre chain was not just going to stand idly by as WB rolled out their plan.
We have already commenced an immediate and urgent dialogue with the leadership of Warner on this subject. As this issue gets sorted out, we are nonetheless encouraged that vaccines protecting society at large against the coronavirus are very much at hand. So, it is our expectation that moviegoers soon will be able once again to delight in coming to our theatres without any worry — viewing the world’s best movies safely in our big seats, with our big sound and on our big screens.
Firstly, I have to point out that a vaccine becoming available in the next few weeks doesn’t mean that the COVID-19 pandemic is about to go away. Vaccines will only be fully effective if a large enough portion of the population takes them, and we’ve already seen how vitriolic some anti-vaxxers are. Not to mention that the logistics of distributing the vaccines far and wide is going to be quite an undertaking. So no, theatres are not going to recover “around the corner”. There’s still a long road ahead.
Secondly, Aron’s response here backs up a claim made last night in Deadline’s reporting of WB’s new release strategy, which is that the studio blindsided everybody with this news. According to Deadline’s report, “even some of the creators close to the movies, I can tell you, weren’t in the fold on this decision (except those with financial stakes).” This move was reportedly “a top-down corporate decision as the [conglomerate] bets aggressively on HBO Max, which hasn’t been an immediate triumph out of the gate.”
Since launching on 27 May this year, HBO Max has only netted 8.6 million subscribers, trailing far behind the likes of Netflix, Disney+, and Amazon Prime Video. And while six months isn’t a long time – especially six months during which millions of people saw their incomes devastated – it has to be pointed out that HBO Max is available for free to any HBO Now cable subscribers. And currently, there are 28.7 million HBO Now subscribers who have just decided to not take up that offer for some reason.
That is probably going to change now that they can suddenly get some of the biggest blockbusters of the year streamed directly into their lounges on launch day at no extra cost. Meaning, they won’t set foot in a cinema. So yes, you can kind of understand why AMC is a little upset right now.
Last Updated: December 4, 2020