Stankey: Movie Industry ‘Better Served’ With Alternative Distribution Options

With major theatrical exhibitors pushing back re-opening screens to consumers due to surges in coronavirus infections in parts of the country, WarnerMedia continues to re-evaluate how it will distribute its slate of new-release movies.

Speaking on the July 23 AT&T fiscal call, CEO John Stankey said he welcomed alternate distribution channels afforded studios and consumers during the pandemic. The successor to CEO Randall Stephenson was asked if Warner Bros. would delve further into releasing movies direct to consumers in their homes — beyond the May 15 offering of animated Scooby-Doo movie Scoob!

Stankey said he would be surprised if “coming out of COVID” the movie industry didn’t see “some adjustment” how new titles are distributed beyond the traditional 90-day theatrical window.

While stressing that theaters continue to play an important role in the distribution of studio movies, including titles such as director Christopher Nolan’s espionage thriller Tenet, which Stankey contends is meant to be seen on the big screen rather than in the living room, the executive said ongoing uncertainty on the market’s return to normal forces a reboot of traditional distribution.

“I don’t know when theaters are going to re-open,” Stankey said. “There’s no question the longer this [shutdown] goes on, there’s going to be some content on the margin [that we look at and] say, ‘it may be better served’ to be distributed in another construct. I love the fact we have that option now.”

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Stankey said premium VOD and subscription streaming video platform HBO Max afford studios distribution options for previously earmarked theatrical releases. Will Wonder Woman 1984 head to PVOD? Stankey doesn’t think so.

The sequel to the 2017 hit Wonder Woman, the new franchise installment from director Patty Jenkins, was supposed to open on June 5, was later moved to Aug. 14, and is now slated for October in the United States.

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“I would be very surprised if that was the case,” he said. “We’re going to take a piece at a time. It’s nice to have the [D2C] reality.”

Without naming titles, Stankey reiterated Warner’s current box office slate has been “retooled” for direct-to-consumer distribution.

“Yes, there are going to be some shifts as we move forward here,” he said.

AMC Theatres Delays U.S. Re-Opening to Mid-August

AMC Theatres, the nation’s largest movie exhibitor, July 23 announced it is further delaying re-opening more than 600 theaters in the United States to mid-August.

The chain had originally planned to restart operations July 15 following mid-March global shutdowns due to the coronavirus pandemic, but then pushed the date back to July 30 when studios Warner Bros. and Disney delayed the release of tentpole titles Tenet and Mulan, respectively. With virus infection surges in Arizona, California, Florida and Texas, the entertainment industry remains on a wait-and-see reality.

“This new timing reflects currently expected release dates for much anticipated blockbusters like Warner Bros.’ Tenet and Disney’s Mulan, as well as release dates for several other new movies coming to AMC’s big screens,” the company said in a statement.

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Looking abroad, approximately one-third of all AMC cinemas in Europe and the Middle East are already open and are operating normally.

AMC Entertainment earlier this month made moves with institutional investors to reduce its debt load by $460 million, in addition to securing $300 million in new financing.

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Report: Men, Young Adults Most Eager for Theatrical Re-Opening

With major exhibitors AMC Theatres, Regal Cinema, Imax and Cinemark set to re-open U.S. screens in August, much of the entertainment industry’s fiscal future depends on how comfortable consumers feel attending confined indoor spaces during the coronavirus pandemic.

New data from JustWatch found that in the United States, the rate of moviegoers wanting to return to the cinema after the lockdown is about 10%-20% lower than in other countries.  Men (58%) and users under the age of 25 (60%) are most interested in re-visiting the movie theater.

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Not surprisingly, the data found that avid moviegoers feel less risk returning to theaters compared to the occasional consumer. Age plays a factor as well with younger moviegoers less adverse to sitting in confined spaces eating popcorn compared to older demos.

Analyst: Perfect Re-Opening Date for Theaters, Studios ‘May Never Arrive’

With surges in coronavirus around the country, including California, Florida and Texas, beleaguered movie exhibitors face the daunting prospect of further delaying re-opening operations to the public.

Eric Wold, media analyst with B. B. Riley FBR, is cutting his share price for AMC Theatres, Cinemark and Imax, underscoring what he contends has become an imperfect world for exhibitors facing leery consumers and a dearth of new-release content from trigger-shy studios.

“We are less certain that studios will wait for the perfect date to release their films — as that perfect date may never arrive,” Wold wrote in a July 15 note.

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Indeed, Disney and Warner Bros. have pushed back further major releases such as Mulan and Tenet, while Universal Pictures is actively courting premium VOD and home entertainment channels for select titles. Paramount just licensed the scuttled box office sequel The SpongeBob Movie: Sponge on the Run to Netflix internationally while it readies a domestic PVOD release in 2021.

The analyst believes that if the current situation continues, the domestic box office will decline 75% in the current third quarter (ending Sept. 30) and 50% in Q4 compared to 2019. Wold says ongoing uncertainty and theatrical release delays will drop the 2021 box office revenue more than 20%.

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“Waiting for every major market to have optimal reopening rules for movie theaters (especially around capacity limits), may end up pushing most, if not all, titles into 2021,” Wold wrote. “And if studios are concerned around the health of their exhibitor partners, they may not choose to wait much longer.”

U.K. Report: Home Entertainment a ‘Lifeline’ During Pandemic

With an entertainment industry on shutdown since mid-March due to the coronavirus pandemic, home entertainment has largely filled the void through subscription/ad-supported VOD, transactional VOD and packaged-media content.

A new online survey of 3,000 adults from June 25 to July 2 in the United Kingdom — the No. 2 home entertainment market worldwide — underscores the value of home entertainment to consumers, as well as their desire to return to movie theaters.

A whopping 90% of respondents said they access SVOD in the home for entertainment, with 4% opting for on-demand content and 3% live TV. Not surprisingly, 92% of respondents rely on Netflix, followed by Amazon Prime Video (72%). Disney+ trailed with 62% adoption, but 47% of respondents said they signed up for the service during the lockdown.

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“Home entertainment has provided a lifeline for people during the lockdown — and still now, with many still spending much more time at home,” Chris Whittle, managing director at London-based pop culture marketing firm Experience 12, said in a statement.

Most sought after TV shows include:

  1. The Mandalorian: Season 2
  2. The Falcon and the Winter Soldier
  3. The Boys: Season 2
  4. The Great British Bake Off
  5. RuPaul’s Drag Race
  6. Adventure Time: Distant Lands
  7. Doom Patrol: Season 2
  8. Lovecraft Country
  9. Hanna: Season 2
  10. Truthseekers

“Netflix, Amazon Prime and now Disney+ are keeping the nation entertained and, while our research shows that Netflix retains the crown when it comes to the best content, it’s interesting to see that it’s actually output from Prime Video and Disney+, such as “The Mandalorian,” “The Falcon and the Winter Soldier” and “The Boys,” which are the most anticipated,” Whittle said.

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At the same time, Brits seem eager to return to the movie theater. More than 66% of respondents said they would frequent the cinema within two months of their re-opening.

Most anticipated movies include:

  1. Wonder Woman 1984
  2. Bill & Ted Face the Music
  3. A Quiet Place Part II
  4. Tenet
  5. Mulan
  6. The King’s Man
  7. The Conjuring: The Devil Made Me Do It
  8. Monster Hunter
  9. Candyman
  10. The SpongeBob Movie: Sponge on the Run

 

“It’s clear to see that pop culture fans are keen to get back to the cinema as soon as they can,” Whittle said. “Superhero movies are, as ever, what fans are looking forward to the most. But what’s interesting is that – while 79% of our respondents claim to prefer Marvel over DC (21%) – the top two most anticipated movies come from the DC comic stable, namely Wonder Woman 1984 and Bill & Ted Face The Music.”

Warner Again Pushes Back ‘Tenet’ Theatrical Release

The theatrical business return to normal took another hit when Warner Bros. late June 25 announced it would again delay the release of Christopher Nolan’s international espionage thriller, Tenet, to Aug. 12 from July 31. The movie starring Robert Pattinson and John David Washington, among others, was originally slated to bow on July 17.

The move suggests Disney could follow delaying the July 24 release of live-action Mulan, which was originally scheduled to release on March 27. The studio has made no announcement.

Major exhibitors such as AMC Theatres, Regal Cinemas and Cinemark have embraced Mulan and Tenet as new studio releases targeting moviegoers with the message that cineplexes offer more than recycled movie classics and home entertainment titles.

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But with COVID-19 generating the highest one-day total (more than 37,000) of new infections in the United States since the pandemic began — predominantly in California, Texas, Arizona and Florida — studios and media companies have hit the hold button.

Disney just a day ago said it was delaying reopening Disneyland and Disney California Adventure Park in Anaheim, Calif., due to issues regarding meeting the state’s guidelines toward reopening the economy.

Cinemark Stresses Virus Protocols Ahead of Theater Re-Openings

With Cinemark set to re-open five theatrical locations June 19 in the Dallas/Fort Worth area, the national chain is going to great lengths to convey to uncertain moviegoers its screens are safe during the coronavirus pandemic.

Cinemark, like AMC Theatres and Regal Cinema, has been shuttered since the outbreak of COVID-19. All three chains are re-opening the majority of domestic screens in July. Consumer response to movie theaters is seen by many as a harbinger to mass spectator events such as sports, conventions and music concerts returning to normal.

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“While Cinemark already takes significant precautions to ensure the health and safety of our employees, guests and communities, we have developed The Cinemark Standard for an extra level of cleaning and sanitizing that guests will notice from the moment they walk back through our doors,” CEO Mark Zoradi said in a video statement. “Our teams are trained, prepared and eager to once again entertain movie lovers in an environment that cannot be replicated in-home.”

Indeed, Cinemark said its theaters are “thoroughly sanitized at least every 30 minutes.” It claims to have added an “extra level of cleaning & sanitizing” that meets or exceeds CDC and WHO guidelines. This includes using products identified by the EPA to be effective in eliminating COVID-19 throughout the theater.

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Any seat that is occupied will be sanitized again before the next showtime, as well as adjacent seats, handrails and children’s booster seats. For extra assurance, seat wipe dispensers are available for any guest who wishes to re-clean their seat.

Cinemark is adding a morning “purge cycle” that increases the total volume of fresh, outside air flowing into its theatres. Additionally, the chain is utilizing supply fans constantly while occupied, enabling more fresh air from outdoors to moviegoers inside.

The chain is also using vacuums equipped with HEPA (High Efficiency Particulate Air) filters identified to be effective in trapping at least 99.97 percent of microscopic particles, including the coronavirus.

Theater Trade Group Questions Early Re-Openings

With the state of Georgia allowing movie theaters to re-open on April 27 — provided they adhere to CDC social distancing guidelines — a trade group representing exhibitors says the practice would largely result in screening catalog titles.

The National Association of Theatre Owners in an April 22 statement said exhibitors should remain united in regards to re-opening screens in order to deliver confidence to consumer and stock new-release titles.

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“Until the majority of markets in the U.S. are open, and major markets in particular, new wide release movies are unlikely to be available,” NATO said. “As a result, some theaters in some areas that are authorized to open may be able economically to reopen with repertory product; however, many theaters will not be able to feasibly open.”

With most national chains laying off or furloughing employees and executives, scrambling together requisite staff to run theaters remains a challenge. Adam Aron, CEO of AMC Theatres, has publicly stated he hopes theaters could be operational by July.

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John Stankey, COO of AT&T, parent to WarnerMedia Entertainment, doubts theaters can “snap back” quickly with ongoing consumer uncertainty about the status of COVID-19 infections, inadequate supplies of face masks to businesses and virus screenings.

Indeed, Georgia Gov. Brian Kemp admitted earlier this month that he hadn’t been aware the virus could be spread by asymptomatic people, or those not exhibiting signs of an infection.

Georgia, along with many other red states, has felt internal pressure from some residents and political activists arguing for a return to normalized small business operations and consumer access. Many of the businesses, which face permanent closure and bankruptcy, have been unsuccessful securing federal relief funds.