'Godzilla vs. Kong' was a hit at the box office and on HBO Max, and it shows why the post-pandemic terms between studios and theaters are far from settled

• Experts say "Godzilla vs. Kong's" pandemic-best opening shows promise for theaters, but urge caution.
• The movie was also a hit on HBO Max, but WB plans to abandon day-and-date releases after this year.
• Still, a studio exec said WB is in talks with exhibitors to shorten the theatrical window.

After more than a year, the US theatrical industry finally had some good news.

"Godzilla vs. Kong," the new monster battle royale from Warner Bros. and Legendary's "MonsterVerse," earned $48.5 million at the domestic box office in its first five days, and $32.2 million over the three-day Easter weekend - a pandemic-best opening. It's so far made more than $285 million worldwide (it cost $200 million to produce).

It's more impressive considering the movie, like all of Warner Bros.' movies this year, also debuted on WarnerMedia's streaming service HBO Max on the same day it arrived in theaters.

Does that suggest that moviegoers will still see films in cinemas whether they're streaming or not?

"Many audiences actively seek out the big screen, big sound, and shared experience [of movie theaters]," Jeff Goldstein, the Warner Bros. president of domestic theatrical distribution, told Insider. "With the right properties, theatrical exhibition can significantly ignite a cultural moment and increases the entire value chain."

But while the numbers signal some hope for movie theaters that have been rocked by pandemic-related closures, experts caution that the industry isn't out of the woods just yet.

"It's difficult to determine anything concretely from just one film, especially after the year we've had," said Jeff Bock, the Exhibitor Relations senior media analyst.

He added that theaters "just have to keep providing a safe and compelling environment for audiences, as 'Godzilla vs. Kong' certainly shows folks are ready to return for the right film."

"While the film experienced a huge increase in box-office performance relative to 'Wonder Woman 1984,' we are still well below how films had performed pre-pandemic and concerns remain that a meaningful portion of moviegoers now prefer streaming at home," said Joe McCormack, an analyst with the research firm Third Bridge.

The National Association of Theatre Owners (NATO), the largest movie-theater trade group, cautioned that while theaters in the US are heading in the right direction, markets in Canada, Europe, and Latin America are still struggling.

"We are a national and a global industry, and we need many of those markets to recover to ensure the biggest box-office potential for global hits," a NATO spokesperson told Insider in a statement.

While theaters still have a long road to recovery, the movie does suggest that theatrical and streaming distribution strategies can coexist.

Theatrical windows may never be the same

"Godzilla vs. Kong" wasn't just a box-office hit. HBO Max said that the movie had the largest audience in its first four days of any title since the service launched last May.

In response to "Godzilla vs. Kong's" performance, some analysts praised WarnerMedia's day-and-date release strategy, which received backlash from Hollywood after it was announced in December.

Lightshed Partners' Rich Greenfield noted on Twitter that Max was the No. 1 app in the Apple app store on Sunday and said "the future is day and date releases." B. Riley Securities analyst Eric Wold upgraded his stance on shares of AMC Theatres, the world's largest theater chain, from "neutral" to "buy."

Warner Bros.' strategy reflects a big shift in film distribution amid the pandemic.

But NATO, the theater trade group, isn't convinced it will have lasting consequences.

"Exhibitors are, of course, concerned about meaningful changes to release models, including the length of the exclusive theatrical window," the NATO spokesperson said. "It is important to understand that pandemic release models, driven in part by the studios' need for revenue right now, may bear little resemblance to what comes after, when the theatrical market can operate at full capacity. A large piece of the studio movie output simply does not make sense - or profit - without a robust theatrical performance."

Still, there are already signs that the traditional theatrical window, typically 75 to 90 days before the pandemic, could be a thing of the past. Warner Bros. isn't the only movie studio to embrace streaming during the pandemic and it could have lasting ramifications for movie theaters.

Major studios like Warner Bros., Universal, and Paramount have struck deals with exhibitors to dramatically shorten the window beyond 2021. That doesn't mean day-and-date releases like what Warner Bros. is doing now, but it does mean movies could wind up on streaming or digital-rental platforms earlier than ever before.

Warner Bros., for instance, struck a deal with Cineworld (which owns Regal Cinemas) to shrink the window to 45 days beginning in 2022. Goldstein, the studio's head of domestic theatrical distribution, told Insider that Warner Bros. is in talks with other exhibitors for similar deals.

He suggested that the day-and-date model is for 2021 only, which Warner Bros. had previously stressed.

"Our day-and-date strategy was right for us given the hobbled marketplace at this point in time," Goldstein said. "Our plan for 2022 makes sense for that period of time."