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Melinda Sue Gordon / Warner Brothers
The release of another highly successful film has been delayed. However, studios have another option for movie release, even if they seem reluctant to use it.
Warner Bros., the Hollywood studio owned by AT&T (ticker: T), delayed the release date of Beginning, his action thriller directed by Christopher Nolan, until further notice due to an increase in Covid-19 cases in the United States. The film will be released on August 12 after being delayed twice. Warner and other studios like Walt Disney (DIS) have delayed the release of other movies like Wonder Woman 1984, Mulan and Black widow.
These indefinite delays could cause Warner to skip a theatrical release for Beginning Altogether, Richard Greenfield of LightShed Partners wrote in a report Tuesday. Instead, Warner should release the film on AT & T’s recently launched subscription streaming service HBO Max, he wrote.
“There just doesn’t seem to be a way to safely open movie theaters before a vaccine becomes widely available. Film studios need a new and fast distribution strategy, “Greenfield said.
The current health situation leaves studies with two options, Greenfield said. Hollywood may delay the launches until 2021 in hopes of a shot or change the launches to its subscription-based online streaming services. Greenfield added that even when theaters were open, social distancing patterns would lead to fewer box office numbers, and selling the rights to these movies to streaming giants like Netflix (NFLX) or Amazon.com (AMZN) is less compelling.
HBO Max, which launched in May, has not been as successful as the broadcast veterans due to a lack of original content, according to Greenfield. The fledgling streaming platform has also suffered outages from Roku (ROKU) and Amazon Fire TV devices.
Debuting Beginning on HBO Max “it could just be the power move WarnerMedia needs right now,” Greenfield said, noting recent successful moves by competitors like Disney launching Hamilton on your streaming platform.
But such a move is easier said than done.
Warner told him Barron’s that Beginning it won’t launch on HBO Max. “We are grateful for the support we have received from exhibitors and remain steadfast in our commitment to the theater experience around the world,” Toby Emmerich, president of Warner Bros., said in a statement Tuesday to Barron’s. “Our goals throughout this process have been to ensure the highest odds of success for our films while being ready to support our theater partners with new content as soon as they can safely reopen.”
Greenfield also acknowledged that releasing the Nolan movie on HBO Max would require Warner to renegotiate contracts with distributors. He also said that the current subscription fee level for HBO Max, at $ 15 per month, would not be sustainable for producing big-budget movies, especially if releases are dropped in the future.
Warner’s parent AT&T will post its second-quarter earnings the Thursday before trading. Management’s discussion of the initial response from HBO Max users will be a focus among other telecommunications segments and transmission conglomerates.
AT&T shares closed 0.1% to $ 30.21 on Wednesday, while the S&P 500 rose 0.6%.
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