CNK Cinemark Holdings Inc

By R.T. Watson 

Walt Disney Co.'s "Raya and the Last Dragon," its first domestic release in a year, delivered tepid results after Cinemark theaters, the nation's third-largest chain, didn't play the film.

The animated "Raya and the Last Dragon" grossed $8.6 million in the U.S. and Canada over the weekend, according to preliminary studio estimates, with the film appearing in 2,045 theaters throughout North America, Disney said.

"This is a soft theatrical opening. Disney is the best family brand in the business," said box-office analyst David A. Gross of Franchise Entertainment Research Inc.

"Raya and the Last Dragon" is also available on Disney's direct-to-consumer streaming platform, Disney+, for an additional $29.99 on top of the monthly subscription rate of $6.99. The company hasn't released viewer data.

Cinemark Holdings Inc. didn't respond to requests about why it chose not to play "Raya and the Last Dragon," the weekend's biggest release from the film industry's biggest studio.

But the move comes amid growing tension between Hollywood studios and movie theater chains over whether the theaters should get to show movies before they premiere on streaming services, and for how long.

With pandemic policies shutting theaters and viewers turning to at-home entertainment, Hollywood studios responded by debuting new films via their streaming services, cutting out or cutting short the pre-pandemic window of exclusive theatrical release.

With more multiplexes now open, such as in New York City and San Francisco at 25% capacity this weekend, more theater chains, such as AMC Entertainment Holdings Inc. and Cinemark are hoping for a recovery. However, it is still unclear how soon consumers are ready to embrace the in-person, big screen experience.

None of Cinemark's 345 theaters across 42 states showed "Raya and the Last Dragon," according to a person familiar with U.S. box office data. Some smaller movie theater operators like Harkins Theatres, which has more than 30 domestic locations, also didn't offer the movie, the person also said.

Harkins Theatres, which says it is the fifth-largest chain in North America, didn't respond to requests for comment.

While top theater chain AMC showed "Raya and the Last Dragon" this weekend, North America's second-largest chain Cineworld Group PLC's Regal Entertainment Group remains shut, as the company waits for assurances that Hollywood will stick to plans to release high-profile films.

Disney appears confident the movie will over time draw audiences out of their homes, even as the film is available online. "Domestically there is limited new family or animated competition until releases slated in early summer," the studio said in a release on Sunday. "'Raya' will have extended play through March and April spring break periods nationwide."

This is the first time since Mar. 2020 that Disney is releasing a new movie to theaters in North America. Meanwhile, the studio has either delayed sending big-budget films, like Marvel spinoff "Black Widow," to theaters or has debuted titles like "Mulan" and Pixar's "Soul" exclusively on Disney+. The company's CEO Bob Chapek has said the streaming platform is central to growth.

Disney declined to comment on theaters choosing not to screen "Raya and the Last Dragon."

AT&T Inc.'s Warner Bros. is also giving priority to its streaming service, HBO Max, this year as the theatrical market's recovery remains uncertain.

Last week, Warner Bros. released the part- animated, part-live-action film "Tom & Jerry," which grossed $14.1 million in North America. This weekend, the film showed in 2,563 theaters -- roughly 500 more than "Raya and the Last Dragon" appeared in -- and earned an additional $6.6 million, bringing its domestic total to $23 million, the studio said.

When "Tom & Jerry" premiered in theaters last weekend, the studio also made it available to subscribers of HBO Max, which costs $14.99 a month. The studio is releasing all its films this year simultaneously on the platform and in theaters.

On Sunday, Warner Bros. said that five of the best performing theaters for "Tom & Jerry" in the U.S. and Canada were locations owned by Cinemark.

"Newly reopened theaters in New York City, Northern California...gave us a strong boost in those markets and show how hungry audiences are for a return to moviegoing," the company also said.

According to one independent cinema owner, Disney is charging 4 percentage points more to show "Raya and the Last Dragon" than Warner Bros. is charging for "Tom & Jerry." Disney's rate of 52% of ticket sales was less than the 60% or more that the studio generally charges, the theater owner also said. Warner Bros. has been offering a discounted rate of 48% for all of the studio's films which simultaneously debut on HBO Max, the person also said.

Write to RT Watson at rt.watson@wsj.com

(END) Dow Jones Newswires

March 07, 2021 18:17 ET (23:17 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.