Shares of Cineworld Group plc (LON: CINE) today plunged 23.2% after AT&T’s Warner Bros. announced that it would release all its 2021 movies on HBO Max at the same time they will premier in theatres.
Investors sold the cinema-operators stock on the news given that the availability of blockbuster movies online at the same time that they have premiered in movie theatres is likely to reduce demand for movie tickets as potential moviegoers choose to watch the same movies at home.
Warner Bros, which is owned by AT&T said that the plan was meant to ensure that people can watch movies safely at home during this time due to the coronavirus pandemic and that the plan was meant to last for one year.
Ann Sarnoff, chair and CEO of WarnerMedia Studios, said.“No one wants films back on the big screen more than we do,”
“We know new content is the lifeblood of theatrical exhibition, but we have to balance this with the reality that most theatres in the U.S. will likely operate at reduced capacity throughout 2021.”
Some of the movies set to be released by Warner Bros in 2021 include: “The Little Things,” “Judas and the Black Messiah,” “Tom & Jerry,” “Godzilla vs. Kong,” “Mortal Kombat,” and “Those Who Wish Me Dead,” among others.
Warner Bros is not the only major studio that has embraced the online video streaming model as both Universal Studios, and Disney have taken a similar approach this year with Universal releasing “Trolls World Tour” online and in theatres at the same time. In contrast, Disney released “Mulan” on Disney+ as a one-time, $30 purchase.
It remains to be seen how this new trend shall affect cinema operators going into next year as people adjust to the new normal.
Cineworld share price
Cineworld shares today plunged 23.2% to trade at 56p having fallen from Thursday’s closing price of 73p.