The last major cinema holdout will be reopening its theaters again next month. Regal Cinemas owner Cineworld (CNNW.F 5.25%) announced all of its U.S. theaters will reopen in April, with those it operates in the U.K. to follow the next month.
The decision to finally reopen many months after rivals AMC Entertainment Holdings and Cinemark were already operational, albeit with reduced seating capacity, stems from an agreement with AT&T's (T 1.43%) Warner Bros. to get a window of exclusivity for films before they're moved to streaming and pay-per-view services.
Beginning in 2022, Warner Bros. studio will give Cineworld an exclusive 45-day window to show its movies before they're released to streaming (in the U.K. the window will be 31 days).
The studio had previously announced its entire slate of films for 2021 would receive day-and-date releases, meaning they would be simultaneously released to theaters and other viewing options. Cineworld stood fast against reopening its Regal theater chain until it had received assurances from studios they would commit to releasing big-budget films into theaters.
While the new agreement gives Cineworld a longer exclusive period to show the films than the deals AMC and Cinemark signed with Comcast's Universal Pictures for a three-week exclusive window -- which also included a cut of revenue from the streaming service showings -- it still represents a further narrowing of the exclusivity period.
Prior to the COVID-19 pandemic, theaters typically enjoyed a 75- to 90-day window where it could show films before they were distributed elsewhere, so this effectively cuts that by as much as half.
Even so, unless the films are yanked from AMC and Cinemark theaters, those theaters would likely benefit from Cineworld's agreement since the movies won't show up on streaming or PPV services for 45 days.