In context: It's no secret that the movie theater industry hasn't been doing particularly well this year -- due in no small part to the rapid spread of the Covid-19 virus. As thousands upon thousands of potential moviegoers have chosen to stay home and avoid crowded places, producers and theater chains have been scrambling to find a solution. For Warner Brothers, that solution will come in the form of a hybrid premiere strategy.
Throughout 2021, all of the company's new releases will premiere via HBO Max on day one, alongside their theatrical releases. This is fantastic news for consumers (it means more choice), but for theater chains, it could be a heavy blow to their bottom line -- early theater-only exclusivity is a major revenue pusher for the likes of AMC and Cinemark.
Both of these companies have well over 500 theaters each, and if they're forced to share film debuts with digital viewing mediums, all that overhead -- even with many theaters temporarily closed -- could hurt them quite a bit. This is something WarnerMedia Studios and Networks Group CEO Ann Sarnoff is well aware of.
"We know new content is the lifeblood of theatrical exhibition," Sarnoff said in a statement. "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 other words, while Warner is sympathetic to the plight of theater chains, its own needs -- and those of its customers -- must come first. However, the company still hopes that viewers who are capable of doing so will choose to see its upcoming films, such as Matrix 4 and Dune 2, at physical theater locations. This will allow the company to continue to "support [its] partners in exhibition" while giving more health-conscious customers an alternative way of viewing the latest blockbusters.
The big question is how all of this will play out in practice. Typically, theater tickets are only good for one viewing session -- a not-insignificant portion of moviegoers likely return in the weeks following a good film's launch to watch it again with friends, effectively giving the theater extra cash.
With a streaming service like HBO Max, though, you could theoretically burn through ten Matrix 4 viewing sessions in a single month with no limitations. You could even stream the film to thirty friends in your living room (not that we're advising you to do such a thing in these risky times), if you choose, once again robbing theaters of that ever-valuable ticket revenue.
It's a precarious situation for physical cinemas, and we'll just have to wait and see how well they will hold up over the coming months.