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JPMorgan cautious on theaters as film studios consider releasing content on demand

The AMC 25 and Regal Cinemas on 42nd Street in Times Square in New York.
Richard Levine | Corbis | Getty Images

JPMorgan cut its price targets and overall outlook on movie theater chains after studios hinted that premium video on demand (PVOD) may not be too far down the road.

Using premium video on demand, consumers can watch a movie at home a just few weeks after it debuts in theaters. Analysts and investors suspect that the on-demand service will appeal to a large audience that doesn't attend movie theaters because of the large crowds or because they have young children.

"We are cautious on the longer-term secular risks around PVOD as we view a studio potentially moving forward with Apple/Comcast or another distributor as a significant risk for the exhibition industry," wrote JPMorgan analyst Julia Yue.