It is not yet known whether Warner will be sold to Netflix or Paramount. But it is certain that, if the film and series producer ends up in the hands of a streaming group, it will put even more pressure on the already weakened business model of cinema chains around the world, including in Brazil.
There is even a chance that the sale will slip into the shopping center industry here, since cinemas still play an important role in attracting people to ‘rolezinhos’ in shopping centers.
Netflix communicated on Friday, the 5th, the proposed purchase of Warner, covering the audiovisual production studios, HBO and the HBO Max streaming service, leaving out the pay TV channels. In turn, Paramount surprised on Monday the 8th, putting on the table an unsolicited proposal to take Warner in its entirety.
Still on Friday, representatives of Brazilian cinema chains criticized the transaction that seemed to have Netflix as the winner. The demonstration was made by the Association of Multiplex Operating Companies (Abraplex) and the Federation of Cinematographic Companies (Feneec).
“The possible acquisition of Warner (…) is another step in an accelerated process of global consolidation that concentrates decision-making power on a few platforms”, they stated, in a note. “When companies of this size start to control different stages of the chain, they also start to define on their own the pace of launch and the commercial duration of the works.”
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What’s at stake
Cinema owners fear loss of box office, predicting that the merger of US media giants will increasingly direct the production of audiovisual works to streaming, weakening the crop of films in theaters, opening ‘holes’ in the programming.
Another sensitive point is the showing time of films in theaters. With Warner in the hands of Netflix or Paramount, there is a good chance that the interval for works to migrate from the big screen to streaming will be further reduced, weakening the appeal of cinemas.
According to the associations, 60% of the public in Brazil does not attend theaters and says they prefer to wait for films via streaming, which highlights the pressure on the conventional cinema business model.
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Abraplex and Feneec defend a regulation that establishes a minimum window of nine weeks (63 days) as an interval between the release of a film in theaters and its arrival on streaming platforms. Today, the average interval is 45 days. In the golden age of analog video, it was up to 120 days.
When asked for further explanation, the associations did not grant an interview.
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In 2023, the release of Barbie, by Warner, generated the biggest box office in history for the studio and attracted crowds to cinemas. The film even helped to move the needle on visits and sales in shopping malls, as Multiplan and Iguatemi reported at the time.
The managing partner of the consultancy Gouvêa Malls, Luiz Alberto Marinho, believes that the sale of Warner to a streaming service is harmful to the shopping mall sector because it tends to squeeze even more screenings in cinemas. “The impact of the flow in cinemas directly affects the flow in shopping malls, and the biggest challenge for shopping malls is precisely to attract people frequently”, he observed. “The shopping mall needs recurrence and tends to lose out if the public goes to the cinema less frequently.”
Visits to shopping malls are 22% below what was seen in 2019, before the pandemic, according to the Brazilian Association of Shopping Centers (Abrasce). In turn, cinema box office sales are 37% lower on the same basis of comparison.
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This data carries a correlation, according to Marinho. “The cinemas lose attendance year after year. Before, people went to watch any romantic comedy. Today they only go to blockbusters”, he stated. “And for a streaming company, it is more advantageous to produce series than films, because they keep the audience on the couch for longer and dilute production costs. Ultimately, shopping malls also lose this audience.”
On the other hand, the importance of cinemas for shopping malls has been “diluted” in recent years, as projects have started to diversify their mix of attractions, with more options for stores, gastronomy, services and leisure, considers Cláudio Sallum, partner at Lumine, shopping mall administrator and consultancy.
If there is any impact going forward, it will be limited, in his view. “The cinema accounts for around 8% of the movement of people in shopping malls, on average for the year”, points out Sallum. So, if the mall loses 10% or 20% of this audience (8%), the impact would be approximately 0.8% to 1.6% of total visitation, he calculates.
“It’s true that reducing the film viewing interval reduces the appetite for cinemas. But the experience of combining a film with a trip to the mall, dinner and shopping, for example, is a very consolidated habit among Brazilians”, says Sallum.
In the same vein, the founder of Varese Retail, Alberto Serrentino, believes that shopping malls are capable of overcoming possible changes in consumer behavior. “The mall adapts its mix to the analysis of demand behavior, that is, how customer taste is evolving. I don’t see a systemic risk”, he highlights. “The shopping mall is a living organism, an extremely convenient piece of equipment.”
