Movie theaters bite back! Cinemas are 'considering slashing Warner Bros ticket prices so low the studio would get nothing back' after the company's decision to release its 2021 film slate on HBO Max

AMC and Cinemark theaters are reportedly considering dropping ticket prices for any Warner Bros title so low that the studio would get almost nothing back after the company announced earlier this month that it will be streaming all 2021 films on HBO Max. 

In the most seismic shift by a Hollywood studio yet during the pandemic, Warner Bros Pictures on December 3 announced that its entire 2021 film slate - including a new Matrix movie, Godzilla vs. Kong and the Lin-Manuel Miranda adaptation In the Heights - will stream on HBO Max at the same time the films play in theaters. 

Among the myriad release plan changes wrought by the pandemic, no studio has so fully embraced streaming as a lifeline. 

But after disappointing domestic ticket sales for Tenet, and with the majority of US theaters currently closed, the AT&T-owned Warner Bros will turn to a hybrid distribution model next year. Films will debut simultaneously in theaters and on HBO Max in the US. After one month, they will stop streaming and continue to play only in theaters. 

The move has rattled Hollywood to the core and has prompted mega theaters to bite back.

AMC Theatres and Cinemark Theatres have said that the new hybrid operations would force the companies to consider carrying Warner Bros films on a title-by-title basis. 

Sources also told the Hollywood Reporter that the theaters are even considering slashing ticket prices to as low as $3 to $5 for any Warner Bros title and would want to keep 75 to 80 per cent of the revenue.

AMC and Cinemark theaters are reportedly considering dropping ticket prices for any Warner Bros title so low that the studio would get almost nothing back after the company announced earlier this month that it will be streaming all 2021 films on HBO Max

The move follows Warner Bros' decision to put Wonder Woman 1984 (scene pictured) on HBO Max in December, along with a concurrent theatrical run

That would mean that the studio would get nearly nothing back. 

AMC previously said it could run out of money by the end of January 2021 and in a December 11 filing with the SEC, the company partially blamed Warner Bros. 

The move follows Warner Bros' decision to put Wonder Woman 1984 on HBO Max in December, along with a concurrent theatrical run. The company's decision only makes the pain being felt by exhibitors all the more acute. 

Having been shuttered for much of the year, cinemas reopened nationwide in late summer except in some key locations, including Los Angeles and New York. 

But with most major releases postponed and virus cases surging, about 60 per cent of theaters have since closed again. Regal Cinemas, the country's second largest chain, has shut all its doors. 

Following Warner Bros' announcement, shares of AMC Entertainment fell 16 per cent; Cinemark was down 22 per cent.

AMC vehemently disagreed with Warner Bros' strategy. Adam Aron, chief executive of the world's largest chain, said AMC had gone along with the Wonder Woman 1984 plans because of the virus surge. 

But he said AMC would oppose the same approach into 2021, when a vaccine could accelerate a recovery.

'Clearly WarnerMedia intends to sacrifice a considerable portion of the profitability of its movie studio, and that of its production partners and filmmakers, to subsidize HBO Max,' said Aron in a statement. 

'As for AMC, we will do all in our power to ensure that Warner does not do so at our expense.'

Several of Hollywood's biggest filmmakers have slammed Warner Bros' decision. 

Director Judd Apatow told The AV Club: 'When I heard about the Warner Bros thing, it certainly made me appreciate Universal because they called me and said, "How do you feel about the release of your movie.

He was referring to The King Of Staten Island, which also skipped theaters. But he says the difference between Universal and Warner Bros is that in November Universal made deals with both AMC Theatres and Cinemark to give them the option of shifting movies into home release after just 17 days in theaters. 

'It was a very respectful conversation about how to get the movie out there,' Apatow said. 

Apatow then compared his experience to that of Legendary Entertainment, which said they were only given 30 minutes notice prior to Warner's announcement.  

After the disappointing ticket sales for Tenet (people watching the film in Virginia), and with the majority of US theaters currently closed, Warner Bros announced a hybrid distribution model next year. Films will debut simultaneously in theaters and on HBO Max in the US 

After one month, the films will stop streaming and continue to play only in theaters, Warner Bros said. One upcoming film from Warner Bros is Dune starring Timothee Chalamet and Rebecca Ferguson  

Warner Bros' decision amounts to an acknowledgement that any full rebound for theaters is still a year or more away. LaKeith Stanfield and Daniel Kaluuya are seen in a scene from the upcoming film Judas and the Black Messiah 

'It’s somewhat shocking that a studio, for their entire slate, could call what appears to be nobody. It’s the type of disrespect that you hear about in the history of show business. But to do that to just every single person that you work with is really somewhat stunning,' Apatow told The AV Club. 

Legendary Entertainment said they will be challenging Warner Bros' decision to release Denis Villeneuve’s Dune and Godzilla Vs. Kong on HBO Max. 

In an interview earlier this month, Ann Sarnoff, chief executive of WarnerMedia Studios, said: 'Given the unprecedented time that we're in, we needed a creative solution to address our fans, our filmmakers and our exhibitors. Big and bold is a necessity right now.'

Sarnoff called it a 'temporary solution' and a 'one-year plan'. The studio said other options - releasing big-budget films solely in reduced capacity theaters or delaying films another year - weren't appealing. 

Warner Bros' decision amounts to an acknowledgement that any full rebound for theaters is still a year or more away.

'We've got to get people back in theaters at full capacity at some point. If you read the medical experts that's going to take a while to work its way through the system,' said Sarnoff. 'If we saw an end in sight to the pandemic, we might have a different strategy. But we don´t see that at this moment.'

HBO Max is only available in the United States. Internationally, the studio's 17 films planned for 2021 release will roll out exclusively in theaters.

Warner Bros' decision resonates especially because the 117-year-old studio of Casablanca and Harry Potter has long been a market-leader in Hollywood - and one known as especially supportive of theaters. 

The studio has generally ranked among the top two studios in market share over the past decade - most recently dwarfed only by Walt Disney. 

Warner's films typically account for $1.5-2billion annual in ticket sales in North America - a lot of money to compensate for in HBO Max subscribers. 

Warner Bros' 2021 slate includes many of the expected top movies of the year, including The Suicide Squad, Tom & Jerry, The Conjuring: The Devil Make Me Do It, King Richard and Judas and the Black Messiah 

Warner Bros confirmed the films will be available to subscribers with no further charge. In the Heights is another film that is set to debut in 2021  

Warner Bros confirmed the films will be available to subscribers with no further charge.

'I can't comment on the economics of how it will all work - I'd need a crystal ball for that,' said Sarnoff. 

'But I'm very optimistic that this is a win-win-win for our fans, our filmmakers and our exhibitors. We're getting the movies out. We're allowing them be seen on the big screen which is what they were made for, but giving an alternative. The hybrid approach also allows us to market them in a fuller way than we would have had we just looked at the less-than-full capacities in theatrical right now.'

Warner Bros' 2021 slate includes many of the expected top movies of the year, including Dune, The Suicide Squad, Tom & Jerry, The Conjuring: The Devil Make Me Do It, King Richard and Judas and the Black Messiah.

Under chief executive Jason Kilar, the former Hulu chief, WarnerMedia recently reorganized to further prioritize its streaming service. 

He has moved aggressively to boost HBO Max, even if it comes at the expense of the theatrical marketplace. 

After a rocky rollout, HBO Max said in October that nearly 9 million people were using HBO Max, though 29 million had access to the streaming service as part of their HBO subscriptions. For comparison, Disney+ has about 74 million subscribers, though it's available worldwide.

'Our content is extremely valuable, unless it´s sitting on a shelf not being seen by anyone,' said Kilar in a statement. 'We believe this approach serves our fans, supports exhibitors and filmmakers, and enhances the HBO Max experience, creating value for all.'

Disney has postponed most of its releases, but redirected Hamilton, Mulan and the upcoming Pixar release Soul to Disney+.