Cineworld PLC (LON:CINE) was in the doldrums again as film studio Warner Bros said that in future it will release films online at the same time as they go into cinemas.
Shares in the owner of the 536-strong Regal chain in the US and its 127 Cineworld and Picturehouse cinemas in the UK had rallied recently on hopes that progress on a COVID-19 vaccine might see normal trading return to its cinemas.
Warner’s decision though has seemingly reignited a dispute that has simmered between filmmakers and cinema owners throughout the COVID-19 lockdown.
US cinema chain AMC banned new Universal films after the studio said that it would release them in cinemas and online on the same day.
Eventually, a compromise saw Universal delay the online release by 17 days.
Warner Bros says that it intends to send all films released in 2021 straight to HBO Max, owned by its parent company AT&T.
That will include potential blockbusters such as Dune, Matrix-4 and Godzilla versus Kong.
In a statement Ann Sarnoff, WarnerMedia Studios chief executive said: “No one wants films back on the big screen more than we do.
“We know new content is the lifeblood of theatrical exhibition, but we have to balance this with the reality that most theatres in the US will likely operate at reduced capacity throughout 2021.”
While the decision applies to the US, HBO Max is not available in the UK, the move has reawakened fears over whether there is a future cinema at all post-the pandemic.
Cineworld has been crippled by the forced closures of all its estate.
Last month. it raised a further US$750mln in emergency funding that it said would tide it over until May on the assumption that by that time cinemas would have reopened again.
Cineworld has debts of US$4.9bn and one of its other assumptions is that blockbusters such as the new James Bond film that were delayed by the pandemic get released into cinemas.
Shares in the cinema group dropped 10% to 65.7p valuing it at around GBP900mln.