With Cineworld shares down by around 5% approaching midday today, Danni Hewson, financial analyst at AJ Bell, comments on the potential threat from home viewing:
“Long gone are the days when films making the transfer from cinema to the video store would take months. Today’s agreement between Cineworld’s owner and Warner Bros allows home viewing after just 31 days.
“It’s a sign of the techno charged times but also another hurdle for this beleaguered business to overcome. Just because cinema goers can enjoy the big screen again from the middle of May, doesn’t mean they will. Like with shopping, habits have changed and been exploited by an ever-expanding empire of streaming businesses.
“Add to that the increasing number of gadgets that enable people to watch in Ultra HD with surround sound and microwave popcorn and you wonder if this time the tide has truly turned. Certainly, in today’s announcement the company remarks on “an increasingly challenging theatrical landscape.
“Blockbusters that can’t be enjoyed anywhere else might have tipped the scales, but if film lovers only have to wait a month to stream them in the comfort of their own homes it is unlikely to do little to sweep away any reticence or reforge behaviours.”