AT&T’s Warner Bros. just dug the grave for troubled movie theater company AMC Entertainment Holdings Inc. (NYSE: AMC). Warner has decided to release its 2021 slate of films on its HBO Max streaming service at the same time they go into traditional theaters. The trend has been coming for a long time.
Studios have watched the likes of Netflix and the Amazon Prime streaming service bypass theaters while making hundreds of millions of dollars in the process. The two organizations became studios themselves, creating thousands of hours in original programming to draw subscribers. Recently, Apple launched a similar model with Apple TV+. Warner and its fellow traditional studios were stuck, until now, in a distribution model that is a century old.
AMC already was teetering on the brink of extinction. The pandemic has forced it to close theaters. Efforts to make them safer have not brought back customers. Also, due to social distancing, the theaters could only be partially full.
Warner made a comment about its plan that is almost certainly not true. Ann Sarnoff, board chair and CEO of WarnerMedia Studios and Networks Group, said, “We’re living in unprecedented times which call for creative solutions, including this new initiative for the Warner Bros. Pictures Group. No one wants films back on the big screen more than we do.” Due to its actions, the big screen is going away.
Surely other large traditional studios will follow. The largest of them, the studio division of Walt Disney, has held the market share lead in revenue from theaters for most of the past decade. Its Disney+ streaming business, barely a year old, has over 70 million subscribers. It will make a move like the one Warner has and rob traditional theaters of their final lifeline.
AMC is done. The last one to leave should turn out the lights.