Cinemas reopen in England but streaming threatens recovery

The first of more than 150 cinemas will reopen in England this weekend in a final attempt to cash in on festive moviegoing cheer, but plans by Warner Bros to stream new films including Dune and the next Matrix sequel at the same time as theatre premieres next year threatens to undermine a post-Covid box office revival.

Hollywood studios have seized on theatre closures during the pandemic to experiment with digital releases, infuriating theatre owners who rely on the once sacrosanct model of big screen exclusivity for months on end to make their finances work.

Warner Bros’ move is unprecedented. All 17 of the films it will release next year, from The Suicide Squad and Godzilla vs Kong to Tom & Jerry, will stream on its HBO Max service for the first month when they also premiere in cinemas.

The company has described the decision as a one-year plan, limited to the US, to maximise profits as the Covid pandemic is expected to but cinema attendance significantly for the foreseeable future.

Nevertheless, other Hollywood studios will almost certainly look to adopt similar plans, which if successful would mark the moment the global streaming phenomenon broke the traditional cinema model.

Adam Aron, the chief executive of AMC, the world’s largest cinema firm and the owner of Odeon in the UK, said he would “aggressively pursue economic terms that preserve our business”, as the value of AMC shares tumbled following the Warner Bros announcement.

“Warner Bros says it is a one-year plan, that it isn’t out to kill theatres, so I wouldn’t say it is the death of the movie theatre but it isn’t helpful,” said David Hancock, the cinema research director at intelligence firm Omdia.

“There are enough films to keep people in cinemas, the movie experience is strong enough and powerful enough, but if the plan went beyond a year it would change the economics for theatre owners.”

If simultaneous streaming with big screen premieres did become the norm, cinema owners would probably have to look at closing sites in less viable locations and rein in expansion. “They would have to adjust to demand,” said Hancock.

The pandemic has already pushed cinema companies’ finances to the limit. UK admissions are set this year to hit the lowest level since records began, in turn fuelling the worst UK box office in three decades.

British cinema owners are desperate to reopen, with Vue and Odeon planning to open about 100 of their almost 200 UK sites combined over the coming weeks. Others including Everyman, Showcase and independent operators will take the number of festive reopenings to more than 150. However, Cineworld, the UK’s largest operator, has kept all its 127 sites closed since October, when the premiere of the next James Bond thriller, No Time to Die, was moved to next April.

With almost no major new films to entice moviegoers and lockdown restrictions keeping cinemas shut across large parts of the UK – including Wales, parts of Scotland, Northern Ireland and large movie markets in England including Manchester, Birmingham and Bristol – the economics of reopening are marginal at best.

“We have done the analysis and from a purely economic perspective it is marginally in favour of opening,” said Tim Richards, the founder and chief executive of Vue, the UK’s third biggest chain. “But there are other variables. We want to reopen for customers, for our studio partners and our staff who are tired of being on furlough. All of those together pointed to trying to open where we could.”

There is, of course, a superhero-sized reason for opening in the form of the premiere of Wonder Woman 1984 on 16 December, the only bona fide blockbuster not to be moved due to the pandemic.

As well as shattering preconceived notions about a female-led and directed superhero film, the first movie grossed $820m globally and £25m in the UK. “The reopening is really about Wonder Woman,” said Hancock.

Aside from a few notable exceptions such as A Christmas Carol, starring Martin Freeman, it is mostly Christmas classics such as Home Alone and Die Hard on offer. Odeon says pre-sales indicate that Will Ferrell’s perennially popular 2013 festive comedy Elf may top the UK box office in reopening week.

Richards remains bullish about the future of traditional cinemagoing, identifying the Bond premiere next spring as the start of a return to normality.

“Five years from now we will look back at 4 April when James Bond: No Time to Die opens as a watershed moment,” he said. “That is when the big movies start to return. We will keep going as the vaccine comes out and are hoping not to face closure again now. Cinema is going to return to normal.”