WarnerMedia is “rethinking our theatrical model” in light of COVID-19, AT&T COO John Stankey said on the telecom and media giant’s first-quarter earnings call.

Stankey didn’t elaborate much on that sentiment, and neither did the executive offer any overtures of condolence to theater owners. Even though top exhibition circuits like AMC and Cinemark are hoping to reopen by the beginning of July — with Cinemark CEO Mark Zoradi last week citing Warner Bros.’ Tenet as a key comeback title — Stankey said he is not overly optimistic. “Don’t expect that’s going to be a snap-back” recovery, he said. “I think that’s going to be something that we’re going to have to watch, the formation of consumer confidence, not just about going to movies, just in general about being back out in public.”

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In part because of a 24% plunge in theatrical movie revenue in the first quarter, AT&T reported results below Wall Street expectations, though wireless is staying healthy. CEO Randall Stephenson during the call with Wall Street analysts described the general operating environment as “chaotic,” but said the company has “ample liquidity” to weather the crisis.

A day before AT&T released its quarterly figures, WarnerMedia announced that HBO Max will launch on May 27. The streaming service didn’t come up for much discussion during the hour-long earnings call, but it is a top priority for AT&T. It will join Disney+ and Peacock, which have launched in recent months, as major new ventures by media companies intent on slowing the momentum of Netflix. Apple and well-funded startup Quibi have also jumped into the streaming game.

While streaming has surged during the coronavirus lockdown — a phenomenon that sent Netflix’s first-quarter results into the stratosphere, movie theaters have entered a dire state during the pandemic. Theaters in the U.S. have been completely closed since mid-March, shredding Hollywood’s approach to blockbuster movie releasing. Simply shifting large-scale productions of the D.C. and Marvel variety, which routinely gross north of $1 billion in global theaters, to direct-to-consumer streaming would leave large stains of red ink on the balance sheet.

In 2019, Warner Bros. box office of $1.56 billion dipped 19% from the year before, but it still powered a host of ancillary businesses and output deals, with those rates all pegged to box office. Given the stakes, studios have simply been pushing most major releases into 2021 or beyond.

Warner Bros., like its rivals, has been forced to reckon with the closure of theaters by accelerating the on-demand debuts of high-profile releases like Birds of Prey and The Way Back. Scoob, an animated feature originally slated to hit theaters on May 15, will instead go straight to on-demand. HBO Max, which retails for $15 a month, will likely become home to feature films in an earlier window than planned, as has been the case for Disney+. But Stankey offered no hints of that kind of strategic outlook at WarnerMedia. “The theater business is an incredibly stressed business,” he said.

In February, WarnerMedia announced the creation of Warner Max, a business unit that will produce what the company called “a steady stream of high-quality and highly curated original films.” The slate of eight to 10 annual titles tailored to streaming. Decision-making around which projects go to Warner Max as opposed to going out theatrically via New Line or Warner Bros. is still evolving. A further wrinkle came earlier this month when Jason Kilar was announced as the new CEO of WarnerMedia. The tech exec, who was founding CEO of Hulu, has promised to continue “experiments” with release windows.

The industry’s traditional three-month theatrical release window has been remarkably resistant to change. Negotiations between Netflix and theater owners last year for a compromise window for films like The Irishman did not bear fruit. After Universal last month said Trolls World Tour would bypass theaters in favor of an on-demand-only release, the National Association of Theatre Owners hit back, saying its members “would not forget” the move. The trade group has also promoted research suggesting shorter theatrical windows curtail home entertainment revenue, even if studios don’t have to share as much of it.

As pessimistic as he was during the call about the outlook for theatrical moviegoing, Stankey expressed considerably upbeat sentiment about streaming. “We were right about the streaming model and HBO Max,” he declared. “Streaming that appeals to all demographics is in high demand.”