Warner Bros has effectively signed the death warrant for movie theaters up and down the country after it announced plans to release all of its 2021 movies on its HBO Max streaming service at the same time as they hit cinemas.
The studio announced Thursday that all 17 of its 2021 movie releases including hotly-anticipated blockbusters Matrix 4 and The Suicide Squad will be available to subscribers on AT&T's video streaming service to view at no extra cost.
Executives said it is a one-year plan to push its new movies out to market while the vast majority of US theaters continue to keep their doors closed due to the pandemic.
But the move could cripple the already-struggling cinema industry following years of dwindling ticket sales and a failure to compete with online streaming services such as Netflix and Amazon Prime.
The world's largest movie theater chain, AMC, already warned in October that its finances could be 'depleted' by the end of the year while the parent company of Regal Cinemas shuttered all 500 of its US theaters the same month, just two months after it reopened for business.
Warner Bros has effectively signed the death warrant for movie theaters up and down the country after it announced plans to release all of its 2021 movies on HBO Max at the same time as they hit cinemas
Warner Bros. said the movies will be available to view on HBO Max for one month starting from the release date in movie theaters across the country.
After one month, the movies will stop streaming and continue to play only in theaters.
Ann Sarnoff, chair and CEO, WarnerMedia Studios and Networks Group, said it was the 'creative solution' needed for 'unprecedented times' as the industry prepares for movie theaters to remain shuttered well into the new year.
'We're living in unprecedented times which call for creative solutions, including this new initiative for the Warner Bros. Pictures Group,' said Sarnoff.
'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 theaters in the US will likely operate at reduced capacity throughout 2021.'
Ann Sarnoff, chair and CEO, WarnerMedia Studios and Networks Group, said it is only a one-year plan for during the pandemic
She added: 'With this unique one-year plan, we can support our partners in exhibition with a steady pipeline of world-class films, while also giving moviegoers who may not have access to theaters or aren't quite ready to go back to the movies the chance to see our amazing 2021 films.'
WarnerMedia CEO Jason Kilar said the firm had considered all the 'available options and the projected state of moviegoing throughout 2021' and decided it was the best way for the studio to 'navigate the next 12 months.'
This alarming new model follows in the footsteps of the superhero flick Wonder Woman 1984, which after many delays, will now be released on HBO Max and select theaters on Christmas Day.
HBO Max is a relatively new entrant in the online video streaming service, being launched by AT&T back in May.
A subscription costs $14.99 a month and there will be no additional charge for the movies for subscribers, a Warner Bros. spokesperson confirmed to DailyMail.com.
Shares of AT&T - which owns both Warner Bros. and HBO Max - rose .24 percent off the back of the news and closed Thursday up .48 percent.
Meanwhile shares in cinema chain AMC plummeted 15.97 percent by Thursday's closing bell.
While the studio executives insist it is a one-term plan amid the pandemic, it may well spell the beginning of the end for theater chains.
Warner Bros.' 2021 slate includes many of the expected top movies of the year, including Space Jam: A New Legacy (above)
A scene from the upcoming film 'In the Heights'. Warner Bros. announced Thursday that all 17 of its 2021 movie releases will be available to subscribers on AT&T's video streaming service to view at no extra cost
A scene from the upcoming film 'Judas and the Black Messiah'. With the average ticket price for a movie viewing rising to $9.16 in 2019, according to Statista, there is a stark financial incentive for families to stay home and stream the film
With the average ticket price for a movie viewing rising to $9.16 in 2019, according to Statista, there is a stark financial incentive for families to stay home and stream films.
Sources told the Hollywood Reporter discussions were kept a close secret with partners including Legendary, which counts Godzilla vs. Kong in its portfolio, only learning now that their films will be included in the plan.
The sources also said that Warner Bros. is likely to give theater owners a bigger split of ticket sales in an attempt to sweeten the blow and prevent a boycott of its films in retaliation.
Theater owners are already receiving a better split of ticket sales for Wonder Woman 1984, they said.
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.'
HBO Max is only available in the United States. Internationally, the studio´s 17 films planned for 2021 release will rollout in theaters.
The move is one of the boldest to date by a Hollywood studio in response to what has become a melting point of challenges for the industry.
The movie theater industry has been ravaged by the pandemic as lockdowns closed their doors back in March and - eight months on - COVID-19 restrictions continue to keep them shut in several major cities such as Los Angeles and New York.
In November, it emerged the parent company of Regal Cinemas was reportedly considering a range of options to survive, including permanent theater closures.
UK-based Cineworld closed all 500 of its theaters in the US in October as a cost-cutting measure after only re-opening in August.
Meanwhile, AMC, the world's largest cinema chain started offering the chance to rent an entire movie theater for just $99 last month in a desperate bid to stay afloat.
This came after the company revealed its financial resources would be 'largely depleted' by the end of 2020 or by early 2021 because of the 'reduced movie slate for the fourth quarter,' as well as 'the absence of significant increases in attendance from current levels.'
AMC's revenues fell to $941.5 million, down roughly 22 per cent compared with $1.2 billion in the same quarter last year, according to a Security and Exchange Commission filing in June.
Timothee Chalamet, left, and Rebecca Ferguson in a scene from the upcoming 2021 film 'Dune'
'Godzilla vs. Kong' will also be released next year and viewers can watch it at home first
A scene from the upcoming animated film 'Tom & Jerry' expected in 2021
Several studios have pushed back the release of major blockbusters this year, coming as another blow to the few cinemas with their doors open.
James Bond film No Time To Die was pushed back to April 2021 just weeks before it was about to be released, coming as a huge blow to cinemas.
Then, the release of the highly-anticipated Fast and Furious sequel F9 was also delayed again, while Disney announced in September that its live-action version of Mulan instead debut on its streaming service Disney Plus instead of a theatrical release.
And now the move by Warner Bros. amounts to an acknowledgement that any full rebound for theaters is still a year or more away.
This comes at a time when consumer viewing habits had already shifted, with many opting to stay home and watch streaming services such as Netflix and Amazon Prime in the years leading up to the pandemic.
The popularity of streaming services has surged further during the pandemic, with streaming activity up 60 per cent, according to a Nielsen report.
Warner Bros. has generally ranked among the top two studios in market share over the past decade - most recently dwarfed only by Walt Disney.
Running to select theaters: Wonder Woman 1984 will be available to watch at home in the US on Christmas Day