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AMC
AMC, WarnerMedia making peace with new streaming windows

- A potentially overlooked aspect of AMC Entertainment's
(NYSE:AMC)earnings
conference call this week was CEO Adam Aron tackling the question of
cinema release windows by alluding to some peace with WarnerMedia (NYSE:T
).
- Warner Bros., of course, made one of the most aggressive moves against
the long-cherished cinema exclusivity window in December - when it said
all
of its 2021 film slate would be released on HBO Max the same day the
films
hit theaters.
- Compared to the former peace between studios and exhibitors ensuring
movies saw 75 days in the theater before moving to other formats, the new
arrangements mean home viewers can see movies sooner - but exhibitors can
also balk and refuse to show such movies in their theaters, a costly risk
for studios. For example, Cinemark (NYSE:CNK) refused to show Disney's
new *Raya and the Last Dragon* - streaming also on Disney Plus Premier
Access - after failing to get the rental discount it wanted.
- Answering a question from Macquarie's Chad Beynon, Aron as much as
said he got an attractive enough deal from Warner.
- "We put out a very clear statement that we were not willing to let
Warner Bros. advantage its streaming service at AMC shareholders'
expense,"
Aron said. "And you may have noticed that we are playing Warner Bros.
movies right now. Now we never discuss our film terms publicly, and I
won't
break that pattern today. But you should properly assume that if we're
playing Warner movies, we came to an agreement with Warner that any
changes
in their strategy are being done in ways where AMC shareholders benefit
as
opposed to being penalized."
- He also said he was optimistic, after partnering with major studios
for a century, that the various business relationships could be adjusted
to
support the new approaches.
- Rentals are typically a theater's largest single cost item, with
studios taking some 55%-plus of domestic box office on big releases -
and exhibition
costs taking up more than 50% of AMC's annual admission revenue in recent
years.
- Famously, last April Aron said he'd refuse to show Universal Studios
films after even a little commentary from NBCUniversal's (NASDAQ:CMCSA)
Jeff Shell that the studio would explore premium video-on-demand for
releases. That was before a landmark July deal Aron struck with
Universal shortening the window to 17 days from 75.





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