AT&T (NYSE: T) didn't wait for the golden lasso of truth to reveal if a digital-first strategy is the right call for its WarnerMedia subsidiary. The movie studio's brazen decision to take its entire 2021 film slate and release it on its own HBO Max on the same day each film hits movie theaters is rattling two industries.
Multiplex operators traded as red as a movie house curtain on Wednesday. Shares of AMC Entertainment Holdings (NYSE: AMC) plummeted 16% for the day. Smaller rival Cinemark Holdings (NYSE: CNK) took a messier 22% drop. The thinking here, naturally, is that exhibitors as we know it are toast. It was one thing for AT&T's WarnerMedia to offer Wonder Woman 1984 as a one-off, hitting HBO Max later this month on the same Christmas Day as it hit the corner multiplex. Taking an entire year of movies and doing the same thing is a statement. Can movie theater chains survive this way until 2022?
Streaming services also took notice, but not to the same extreme as we saw with AMC and Cinemark. Netflix (NASDAQ: NFLX) slipped 1% on Wednesday, a modest retreat but notable on a day when all of the major market exchanges ticked higher. A stronger HBO Max means one more rival for Netflix to worry about, and this comes just as it's raising prices for its premium streaming platform. Lost in all of this is that shares of Roku (NASDAQ: ROKU) moved higher. The stock's 3% climb -- with AT&T rising a mere 0.5% -- made it Wednesday's surprising winner on the news. The future may get even better.
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Roku Still Wins the HBO Max Gambit