Cinema chain Cineworld is missing out on today’s rally, with shares sliding 11% after Warner Bros announced is launching its 2021 movies simultaneously on HBO Max and in cinemas in the US.
It’s another blow to chains such as Cineworld, who temporarily closed their screens in the US and UK this autumn after film studios postponed major releases amid the pandemic.
My colleague Mark Sweney explains:
Warner Bros is set to stream its entire slate of new movies from Dune to the Matrix sequel at the same time as cinema release next year, ending the decades-old exclusivity period that theatre owners are relying on to win back film-goers post-pandemic.
The shock announcement will see Warner Bros entire slate of 17 films due for release next year debut on new streaming service HBO Max for one month in the US at the same time as it releases them in cinemas. The announcement does not at this stage impact how films are released in international markets including the UK, where theatre owners have traditionally enjoyed running films for months before they are made available on other platforms such as pay-TV and streaming.
However, Warner Bros move, designed to maximise film profits given audiences are not expected to return to theatres in major numbers next year, is likely to be aped by other Hollywood studios who have used cinema closures during the pandemic to test new release models for movies.
“No one wants films back on the big screen more than we do,” said Ann Sarnoff, chief executive of WarnerMedia Studios. “But we have to balance this with the reality that most theatres in the US will likely operate at reduced capacity throughout 2021. We see it as a win-win for film lovers and exhibitors.”
However, investors in beleaguered movie chains took the news badly with shares in Cineworld, the UK’s biggest operator and second largest in the world, fell by 11%. Shares in AMC, the world’s biggest chain and owner of Odeon in the UK, dropped 16% in the US on Thursday.
“Our content is extremely valuable, unless it’s sitting on a shelf not being seen by anyone,” said Jason Kilar, the co-founder of the successful Hulu streaming service in the US who now runs WarnerMedia.
Last year, the global cinema box office hit a record $42bn. However, with the pandemic causing cinemas to be shut for months on end, and nervous Hollywood studios shifting major releases to future years over fears movie fans won’t return in major numbers, global box office takings are likely to slump to about $12bn.
Analysts are forecasting that the bounce back next year is likely to be muted, between $25bn and $27bn, which is prompting Hollywood studios to look at hybrid release models to maximise profits from their films.
UK construction orders surge, but supply chains struggle and job cuts continue
Lockdown drives UK car sales to lowest since 2008 recession
Pets at Home to repay business rates relief
Pets at Home has followed UK supermarkets and become the latest high street retailer to repay the £28.9m it received in business rates relief during the pandemic.
It comes a day after Sainsbury’s, Asda, B&M and Aldi joined rivals Tesco and Morrisons in repaying business rates relief, bringing the total handed back to the Treasury to £1.8bn.
The pet store chain said it was “extremely grateful” for the financial support it received in March but had decided to repay the entire sum “in full”, after its status as an essential retailer meant it was able to keep its doors open throughout the pandemic.
Pets at Home said it was confident that the business was strong enough to absorb the £35m costs thrown up by the pandemic, without taking the emergency government support.
Pets at Home chief executive Peter Pritchard said:
“We were very grateful for the rates relief provided back in March during a time of significant uncertainty, which helped us to take the decision to keep our stores, online operations and veterinary practices open. Recent positive news around the launch of vaccinations for Covid-19 has led us to reassess the level of uncertainty ahead.”
“Our decision today demonstrates our clear commitment to acting responsibly and treating all of our stakeholders fairly.”
Oil hits nine-month high after Opec+ deal
FTSE 100 hits nine-month high