Warner Bros. will stream movies on HBO Max the same day they drop in theaters

In a momentous decision that could upend the way movies are distributed in the future, Warner Bros., the world’s second-largest movie studio, announced it would stream all of its 2021 movies at the same time they hit theaters.

The movies include “Matrix 4,” “Dune,” “Judas and the Black Messiah,” “Space Jam: A New Legacy,” “The Suicide Squad” and the film adaptation of “In The Heights,” among others, WarnerMedia announced Thursday. WarnerMedia, which owns CNN, is the parent company of Warner Bros. and HBO. Shares of movie theatre operators AMC (AMC) and Cinemark (CNK) fell more than 15% on the news.

Although movie-watching habits have been changing for years, with cheap big-screen television sets and ubiquitous streaming services, the coronavirus pandemic has exacerbated those trends. Warner Bros.’ announcement, however, is a massive leap that none of its competitors has yet taken. The movie theater distribution business remains lucrative and crucial to Hollywood’s bottom line.

“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 theaters in the U.S. will likely operate at reduced capacity throughout 2021,” Ann Sarnoff, chair and CEO of WarnerMedia Studios and Networks Group, said in a statement.

The studio announced last month it would run“Wonder Woman 1984” simultaneously in theaters and on the streaming service on December 25. The decision followed the studio’s release of “Tenet” in theaters last summer, which faced disappointing box office sales. Disney (DIS) and Universal Studios (CMCSA) have chosen to release some of their films directly on streaming services including “Mulan” and “Trolls: World Tour,” respectively. Unlike those two movies, however, the Warner Bros.’ theatrical slate won’t cost HBO Max subscribers anything extra.

WarnerMedia CEO Jason Kilar said in Thursday’s blog post that the studio’s 2021 slate includes 17 films such as “The Little Things,” “Tom & Jerry,” “Godzilla vs. Kong,” “In The Heights” and “Dune.”

“Our content is extremely valuable, unless it’s sitting on a shelf not being seen by anyone,” Kilar said. “We believe this approach serves our fans, supports exhibitors and filmmakers, and enhances the HBO Max experience, creating value for all.”