Breakingviews – Image: Netflix and Amazon buy movie chains

LONDON (Reuters Breakingviews) – Nothing hinders as superheroes match amazingly on-screen to take on teams of baddies. The same dynamic could apply to the real film industry. If Iron Man and Thor can lock arms, why not chain a cinema with a streaming giant like Netflix, Walt Disney or Amazon.com? Bundled subscriptions with theater access may be the main difference.

Cinemas have been reeling from emergency closures during the pandemic, major movie delays, and the threat of online entertainment providers. Shares of AMC Entertainment, Cineworld and Cinemark, the three largest chains, were acquired in 2020. AMC’s woes meant they had to agree to release movies from theaters to online much faster.

The streaming giants are engaged in trench fighting as Disney, Apple and AT&T target a slice of Netflix’s core segment. As a result, Reed Hastings company is expected to see slow revenue growth to 18% in the next fiscal year, down from 24%, analysts surveyed by Refinitiv’s estimate. In the latest example of rising competition, AT & T ‘s Warner Bros. will be releasing its 2021 slate simultaneously in every theater and on HBO Max, its membership service.

Taking over a cinema series could help marketing efforts by offering an extra out-of-court route for the increasingly original content that Netflix and others have. claiming. Raising subscribers to high prices with theater access can also be a tool for distributing shared plan accounts. Amazon can even use theaters to secure other e-commerce services like lockers for pickups, and to test innovations like virtual reality.

He would come stealing. Cinemas are worth half of what they were at the beginning of 2020: AMC and Cineworld have more than 1,770 theaters, and in mid-December they were valued at $ 450 million and $ 1.2 billion, respectively, while and the US premier series, Cinemark, with 533 places, was worth $ 1.9 billion. They collect errors next to $ 1.6 trillion Amazon or $ 2.2 trillion Apple.

It could be argued that Hollywood is in need of corporate theaters more than ever as it prepares for the post-pandemic release of their big-ticket movies. More than half of the Americans surveyed by EY said they were more likely to broadcast films released in cinemas. That’s a testament to the power of a box office that should eliminate the giants’ M&A rags.

This is a Breakingviews forecast for 2021. To see more of our forecasts, click here.