Shares of AMC Entertainment Holdings (AMC 2.95%) are down over 5% in afternoon trading Wednesday, continuing the plunge it took yesterday following Walt Disney's (DIS 2.28%) announcement that two of its most anticipated movies would be released simultaneously to theaters and the Disney+ streaming service.
AMC and other cinema chains have been waiting for movie studios to begin releasing their films to theaters so they could begin getting moviegoers back in front of the big screen. Releasing films to streaming services at the same time they're showing in theaters undercuts the ability of theaters to recover quickly.
Yet many studios need to support in-house streaming services, so releasing first-run films to them helps juice subscriber numbers. Earlier this month Disney+ surpassed the 100-million-subscriber threshold, but it can't afford to relent now.
Not only is there more competition, but Disney also rankled many with its controversial firing of actress Gina Carano from its hit show The Mandalorian, arguably the only certifiable hit Disney+ has had.
By releasing both the Marvel Comics spinoff Black Widow and the live-action 101 Dalmatians remake Cruella to Disney+, it may mitigate the #CancelDisney hashtag that was trending on social media.
AMC has sufficient capital now to survive into 2022, but that's predicated on theaters having a window of exclusivity for films. While Warner Bros. just gave Regal theaters a guarantee of 45 days in 2022, its slate of films this year will also see simultaneous releases. That could be a problem.