All Warner Bros. films in 2021 will be released on HBO Max at the same time as they hit theaters. Yahoo Finance's Dan Roberts breaks down how WarnerMedia is disrupting movie theather chains like AMC.

Video Transcript

MYLES UDLAND: Big news yesterday coming up out of the movie-theater industry. We saw AMC Theaters down sharply when Warner Brothers announced that they would release all of their movies on HBO Max.

Dan Roberts joins us now for the latest on that story. And, Dan, we're seeing some of the stocks of these movie-theater operators stabilizing a bit today. Obviously the damage has been done during the pandemic. But I know this is not a move that pleased you as a movie enthusiast.

DAN ROBERTS: Well, it didn't please me, and it's no surprise that it didn't please the exhibitors, as they're called, the movie theaters. But I think increasingly in this era-- and by the way, of course, I always make sure to bring this point home-- this was already happening before the pandemic, the trend of movies going direct to streaming, fewer people going to movie theaters because there are more streaming options proliferating, but the pandemic obviously has dramatically accelerated it.

Now amid this trend, I get the sense that studios increasingly feel like it's not really on them to prop up the distributors, the exhibitors. I mean, there was always this kind of handshake agreement of the theatrical window, and the traditional theatrical window was 70 days. A movie hits theaters. It's in 70 days. During that time, it's the only place you can see the movie. Then maybe it goes elsewhere-- DVD, digital rental, digital download.

Now, goodbye to the theatrical window, and this was already happening. AMC had already come to a new agreement with Universal, Universal which famously drew first blood, you could say, early in the pandemic when it put "Trolls World Tour" directly on digital rental for $20, and it was a mega hit. AMC already agreed to a new deal, a multiyear deal with Universal that will make the theatrical window for Universal movies just 17 days. So in some ways it's not shocking what Warner Brothers is doing.

And I also want to give the caveat-- I think it's being lost in the reaction to this news-- that HBO's plan or Warner Brothers, I should say, the Warner Media plan is to only have these movies hit HBO Max for one month. Then they'll leave streaming and they'll still be in theaters.

But let's be real here. If you want to see a movie, you don't wait longer than a month to see it. You're going to watch it at home on HBO Max or go to the theater, and now it's going to increase the number of people who feel they don't need to go to a theater. And I'm someone who loves movie theaters.

Look, the way Warner Media is framing this is we're responding to consumer needs. It's not just about the epidemic. It's consumers wanting convenience. Fine, but that might spell death for the movie theaters.

And, guys, a movie like "Dune," I don't want to watch that on my couch at home, you know? That movie demands to be seen in a theater on a huge screen. So this is just a further hit to AMC, which, by the way, has repeatedly during the pandemic tried to raise more capital by offering new shares. It just filed this week to offer 200 million more shares. They're in big trouble.

JULIE HYMAN: Dan, I have a lot of thoughts on this. I mean, I'm surprised to hear you say it's a hand-- it was a handshake agreement, that window, right, because I always thought it was a more formal, sort of codified agreement. And so I wonder, do the theaters sort of have any recourse at this point, right?

DAN ROBERTS: So yeah. I mean, I should be careful. When I say handshake agreement, I guess I mean kind of the practice of the theatrical window. It was something that had just been assumed and respected. That's the way we do things in Hollywood for decades, but we know this was already changing.

I mean, think of the Oscars, you know, and the controversy over forcing a movie to have to be in theaters for two weeks. It seems so silly, right? They did it with "The Irishman" just in order to be eligible for awards. That's going to go away.

You know, increasingly influential people are saying movies don't need to hit theaters anymore. I think the new normal is going to be that only big action blockbusters like Marvel movies go in theaters and an indie movie or a romcom doesn't need to go in theaters.

Look, do the theaters have any kind of contractual or legal recourse here? I'm not sure. I mean, I think the better plan for them-- if they want to be knives out, fine, and try and take legal action, fine. But I think more likely, there will be a compromise.

I mentioned what AMC already agreed to with Universal, 17 days, which already is a sea change. But look, if you're AMC, I'll take 17 days of exclusivity over 0 days over the movie's going to streaming the same day they hit theaters.

And by the way, we should also mention that AMC had already happily agreed to and publicly supported Warner Media's plan to do this with "Wonder Woman 1984," which is going to hit theaters December 25, Christmas Day, and also go on HBO Max that day. They were happy to do that as an experiment, as a one-off. What they never agreed to in the bargain was to have that be the strategy for all 17 of Warner Brothers' 2021 movies, which include some big, big blockbusters.

So we'll see what happens. You know, the AMC CEO, he's a big talker. He likes to say-- you know, make grand, sweeping things, and what he said was he's initiating an urgent dialogue with Warner Media. We'll see how that goes.

MYLES UDLAND: Yeah, and this all-- this all leaves out, right, the rise of more fun theaters, Alamo Drafthouse and the like, right, other places to see movies that were more fun than just sitting in a regular theater. We'll leave that-- we'll leave that for another time.