What WB & Cineworld’s New Multi-Year Deal Means for Theatrical Movies

Soon, all five major theatrical studios will have blown up a decades-long model.

Cineworld Regal HBO Max WB Movies
What does the future hold for movie studios and movie theaters? Warner Bros./Legendary

Ever since WarnerMedia shocked the film industry in December by announcing that Warner Bros.’ entire 2021 theatrical film slate would open in theaters and on HBO Max on the same release dates, the studio has been emphasizing that this is a one-year exception only. Understandably, this drew intense skepticism. Putting the genie back into the bottle in Hollywood is nigh impossible. But it now appears that WB will indeed stick to its guns, albeit not without some updates to the film industry’s status quo.

Cineworld, the second-largest movie theater chain in the world and the operator of Regal Cinemas in the United States, is set to open its doors for the first time in months. The phased re-opening will begin for WB and Legendary’s Godzilla vs. Kong (April 2) and expand further for Mortal Kombat (April 16). Even more interesting, the two sides have signed a multi-year agreement that ensure WB films land in Cineworld theaters regardless of HBO Max’s day-and-date presence before gaining exclusive theatrical windows of 45 days for Regal Cinemas beginning in 2022.

Outside of pandemic-related hybrid releases such as Disney (DIS)+’s unique distribution for MulanSoul and Raya and the Last Dragon, Warner Bros. now joins Universal and Paramount (PARA) in setting up long-term shortened theatrical windows with major exhibitors. Universal previously struck deals with AMC (AMC) and Cinemark for exclusive theatrical windows of 17 and 31 days, depending on box office performance, before shifting to premium video on demand. ViacomCBS leadership announced earlier this month that films will be made available on Paramount+ after 30-45 days in theaters.

In recent weeks, New York City and Los Angeles have reopened movie theaters for the first time in a year. Combined, the two cities can account for between 10%-20% of a film’s entire domestic gross as the two largest movie markets in the U.S. Cineworld CEO Mooky Greidinger described it as “a great moment for us — the U.S. market represents 75% of our business — and soon will be followed with all our markets. We are great believers in the theatrical experience, which only a year ago (2019) generated $43B worldwide,” Deadline reports. From 2015-2019, the U.S. box office topped $11 billion in annual ticket sales each year.

In the U.K., Warner Bros. and Cineworld agreed to an exclusive theatrical window of 31-45 days depending on box office performance before films move to PVOD. Of the deal, Greidinger added: “We are very happy for the agreement with Warner Bros. This agreement shows the studio’s commitment to the theatrical business and we see this agreement as an important milestone in our 100 year relationship with Warner Bros.”

In December, CEO of Sony Pictures Entertainment Tony Vinciquerra said that Sony, which does not have an in-house streaming service, will not be pivoting to day-and-date releases. He did, however, suggest that the studio would take advantage of shortened windows in the future. Should this become official, all five of the major theatrical film studios will have blown up the decades-long 90-day standard.

What WB & Cineworld’s New Multi-Year Deal Means for Theatrical Movies