James Bond has shut down Cineworld Group‘s (LSE: CINE) (OTC: CNWGY) Royal cinema chain in October. King Kong and Godzilla are teaming up to reopen the country’s second largest multiplex operator next week.
It has been almost six months since Cineworld closed its 543 bookshelf theaters in the US, as well as all of its film houses in the UK and Ireland. MGM’s decision at the time to push the theatrical release of James Bond’s No Time to Die through 2021 was the final straw – in a vodka martini that was shaken, not stirred – for Cineworld. Now plans to open select theaters in time to show Godzilla vs. Kong on April 2nd. By the time Mortal Kombat hits the big screen two weeks later, the reopening schedule will be expanded to include more theaters.
Seeing its biggest rival restart its digital movie projectors and popcorn makers seems like bad news AMC Entertainment Holdings (NYSE: AMC)but it’s actually the opposite. AMC needs competing multiplex operators that are open to film studios to justify the release of films in theaters rather than broadcasting them directly to consumers via a growing number of streaming services. The restart of Cineworld is good news for all exhibitors and is not the only thing they are doing.
Push the story forward
The return of Regal Cinemas this weekend isn’t the only positive development for the industry. Cineworld brokered a multi-year contract with AT & T.‘s (NYSE: T) Starting next year, Warner Bros. will offer a 45-day time window for the exclusivity of US publications. That’s a pretty big deal.
Multiplex operators had bigger windows of exclusivity before the pandemic, but AT&T is releasing its entire 2021 movie roster for HBO Max subscribers as they hit the big screen at the same time. It would have been devastating for AMC, Cineworld and smaller chains if AT&T had decided to keep building HBO Max accounts at the expense of till receipts. There’s no going back to the pre-COVID-19 model, but 45 days at least gives chains a chance to get movie fans back into their leather seats. It remains to be seen what other media companies will do with their upcoming releases.
The positive developments from Cineworld and Warner Bros. come in a month when AMC itself had some good news. March started with AMC reopening major New York theaters and ending with the resumption of most California screens. By this weekend, a whopping 99% of AMC locations will be open.
When the corner multiplex shows signs of life, vaccination rates also rise. Almost a third of the country’s adult population has now received at least one dose of vaccine for COVID-19.
We still have a long way to go before we can confirm that consumers are ready to return to the multiplex and that Hollywood will prioritize cinema distribution over streaming services. But small steps in the right direction become bigger steps. There is still time – and hope – for a Hollywood ending.
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