WarnerMedia CEO John Stankey said on Wednesday that the coronavirus pandemic has the AT&T-owned entertainment company “rethinking our theatrical model.”
“The studios are dark for now, but as soon as we can resume production, we plan to get back to where we left off for in March with a steady stream of new offerings in the fall and winter,” Stankey said on AT&T’s Q1 earnings conference call. “We’re also deep into planning how priority operations will return to the workplace as we come out of this pandemic. This experience will change many things, including customer behaviors and expectations.”
“We’re evaluating our product distribution strategy, relooking at volumes and the required support levels we need in a down economy,” Stankey, who is also AT&T’s COO, continued. “We’re rethinking our theatrical model and looking for ways to accelerate efforts that are consistent with the rapid changes in consumer behavior from the pandemic.”
Stankey cited Tuesday’s “Scoob!” news as one example of the “new normal.” The Warner Animation movie, which was previously set to hit theaters May 15, will now instead be available via video-on-demand rental for $19.99 or digital purchase for $24.99 on that same day that it was slated for theatrical release, followed by “an exclusive streaming premiere on HBO Max.”
WarnerMedia’s decision to move “Scoob” to digital release came two weeks after Universal/DreamWorks Animation’s “Trolls World Tour” became the first film that was initially planned for theatrical release to jump straight to a VOD launch thanks to the coronavirus pandemic.
Stankey said during AT&T’s call, which came after the company reported it had missed Wall Street’s expectations for both its Q1 earnings and revenue, that “the theatrical business is obviously a stressed business right now.”
“When theaters are closed, it’s hard to generate revenue,” Stankey said. “And I don’t expect that’s going to be a snapback. I think that’s going to be something we’re going to have to watch the formation of consumer confidence, not just about going to movies, just in general about being back out in public and understanding what’s occurring there.”
Find AT&T’s Q1 2020 financial performance here.