'Film Industry Upheaval'... Warner Bros. Releases New Films Simultaneously in Theaters and Online

New Blockbusters like 'Dune' and 'Matrix 4' Premiered on HBO Max
WSJ: "Online Subscriptions More Important Than Box Office"
Accelerating Theater Decline... Largest Theater Chain AMC to Raise $700 Million

[Image source=AP Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Hollywood's major film studio Warner Bros. announced that all movies scheduled for release next year will be released simultaneously in theaters and on the online streaming service HBO Max. Warner Bros. stated that this is a temporary measure for the year, but even after the COVID-19 pandemic ends, it is expected to be difficult to reverse the trend toward online streaming, which is anticipated to cause significant changes in the film distribution system. On the same day, the stock prices of AMC Entertainment and Cinemark, the largest movie theater chains in the U.S., plunged by 15.97% and 21.95%, respectively.

According to the Wall Street Journal (WSJ) on the 3rd (local time), Warner Bros. decided to simultaneously release major new films such as the science fiction movie "Dune" in theaters and on HBO Max next year. This strategy was adopted as people have been spending more time at home due to the COVID-19 pandemic. HBO Max is a streaming service launched by AT&T in the U.S. last May, offering movies and TV programs for $14.99 per month.

Warner Bros.' decision is due to the difficulty of operating theaters amid COVID-19. Ann Sarnoff, Chairwoman of WarnerMedia Studio Networks Group, explained the background of this decision, saying, "We want to return to the big screen, but considering that most theaters in the U.S. will operate with reduced capacity for the time being due to COVID-19."

However, the industry views this business strategy by a major film studio as a symbolic event showing that the market landscape is clearly shifting from theaters to the online market. Previously, some entertainment companies like Disney released certain films such as "Mulan" online first or chose simultaneous theater and online releases, but they did not apply this to all releases like Warner Bros. Also, for new releases like "Mulan," additional fees were charged beyond the monthly subscription fee.

WSJ evaluated, "This will lead to similar moves by other studios and solidify a new reality in Hollywood." It added, "Online subscriptions are more important than box office revenue."

In particular, Warner Bros. is expected to shake up the film industry by offering all new releases without additional fees. This includes 17 titles such as The Matrix 4, Suicide Squad, Mortal Kombat, Tom and Jerry, and Godzilla vs. Kong.

The theater industry is inevitably hit by this decision. AMC, the world's largest theater chain based in the U.S., plans to raise $700 million (approximately 765.1 billion KRW) through a capital increase to secure liquidity. According to WSJ, AMC plans to issue about 200 million shares based on the closing price that day to secure more than $700 million, and warned that failure to raise capital could lead to bankruptcy. AMC reportedly had $500 million in cash at the end of August but was spending an average of $115 million per month, so if it fails to secure additional funds or the theater situation does not improve, it could face cash depletion by the end of the year.

This content was produced with the assistance of AI translation services.