The theatrical window isn’t broken, but it is full of cracks.Like so many other digital trends that have been accelerated by Covid-19, the way we watch theatrical releases saw big changes throughout 2020. The most significant shake-up: On Thursday, AT&T’s WarnerMedia announced that all 2021 theatrical releases from Warner Bros. will debut simultaneously on HBO Max for U.S. subscribers at no extra cost.That means if you’re already an HBO Max subscriber, you’ll get to watch blockbusters like “Dune,” “The Matrix 4” and “The Suicide Squad” from your living room couch instead of risking a trip to the theater next year. (WarnerMedia previously announced that “Wonder Woman 1984” will debut on HBO Max on Christmas Day.)Everyone saw this coming. With the rise of streaming video, interest in going to a theater and spending all that time and money to watch a two-hour movie plummeted except for the biggest blockbusters. The smartest thinkers in media saw a not-to-distant future where lining up outside a theater for a movie release would become a niche event only for the most dedicated cinephiles. And then Covid hit, theaters were forced to close and studios had to dream up innovative ways to get eyeballs on their slate of 2020 releases.There’s been a lot of experimentation throughout the year from various studios. Early on in the pandemic, Disney released its Pixar animated movie “Onward” directly on its Disney+ streaming service, for example. And several movies, like Universal’s “Trolls: World Tour” and “King of Staten Island” were released straight to on-demand platforms.But as it became clear that theaters would remain closed for months or reopen with strict capacity restrictions, studios were forced to get even more creative as 2020’s blockbuster movies saw delay after delay.To recap:After several delays, Disney released its $200 million film “Mulan” on Disney+ for a one-time, $30 fee. Disney hasn’t reported revenues for “Mulan” yet, but executives promised more details on its theatrical release strategy at the company’s investor day on Dec. 10. It’ll be interesting to see how Disney’s 2021 plans compare to WarnerMedia’s bold move this week.NBCUniversal negotiated a smaller theatrical window with major theater chains like AMC and Cineplex, so movies can go straight to on-demand platforms in a month or less, down from the standard 90-day window.Keep in mind that the studios are careful to say these moves are all temporary, and that they would like to keep their relationships with theaters once the pandemic is over and it’s safe to go out to the movies again.”Everyone should take a breather,” WarnerMedia CEO Jason Kilar told CNBC’s Alex Sherman in an interview Thursday. “Let’s let the next six, eight, ten months play out. And then let’s check back in.”But Kilar also left room to maintain the disruptive model he announced on Thursday.”Certainly this is pandemic-related,” Kilar said. “That’s why we’re doing it. We haven’t spent one brain cell on what the world looks like in 2022.” He also declined to predict where things will stand a year from now.And the market sees the reality of the situation. AMC shares tanked 16% Thursday following WarnerMedia’s announcement, a sign that investors think the straight-to-home releases of movies is a trend other studios will jump on and consumers will prefer.”Clearly, WarnerMedia intends to sacrifice a considerable portion of the profitability of its movie studio division, and that of its production partners and filmmakers, to subsidize its HBO Max start-up,” AMC CEO Adam Aron said in a statement Thursday. “As for AMC, we will do all in our power to ensure that Warner does not do so at our expense. We will aggressively pursue economic terms that preserve our business.”On the other hand, there’s a risk for the studios. Is it worth spending $100 million or more on a blockbuster that’ll be released directly to customers in their homes at no extra cost if they’re subscribers of any given streaming service? Even if we’re trending towards a majority-streaming future for movies, theaters are where studios make a lot of their money, especially in international markets. The economics just don’t work out.”Pushing your best content into a subscription window caps the upside on the truly mega hits that drive all of the profit,” Moffett Nathanson analysts wrote in a note Friday reacting to the WarnerMedia announcement. “And the move into HBO Max undoubtedly will have downstream impacts on home video and rental revenue streams, as well.””Assuming these factors lead to lost revenue of $1.2 billion, HBO Max’s annual average subscriber base would need to be 8.4 million higher than status quo to restore current revenue levels,” the analysts said.In other words, WarnerMedia will have to hope millions more sign up for HBO Max next year if it wants to make up the expensive production costs of its upcoming movies. And if WarnerMedia continues down its path, it’ll have to take on more debt to produce movies for HBO Max, with the hopes AT&T’s investors will believe its building the next Netflix. That’d be a hard sell to the execs at AT&T considering the company is already saddled with loads of debt from its Time Warner acquisition.In the meantime, we’ll continue to see a lot of experimentation from studios as the pandemic rages on. It might be a hybrid model, where you pay a one-time fee to watch a movie through a given streaming service. (The Disney-“Mulan” model.) Or go straight to on-demand services after a shorter-than-normal theatrical window. (The NBCUniversal model.) Or just give the movies away for free, hoping it convinces more people to subscribe to a streaming service. (The WarnerMedia model.)But the signs are clear that we’re in the early innings of theatrical windows going away for good.”We have a hard time believing the messaging that this is only a temporary 2021 plan, however, even if that might be the current plan today,” the Moffett Nathanson analysts wrote. “Once the windows change, it will be hard to go back.”Discolsure: NBCUniversal is the parent company of CNBC.