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HBO Max: Warner Bros. Chose Its Future, Theaters Want to Pretend It Didn’t Happen - IndieWire

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When Warner Bros. announced that “Wonder Woman 1984” would go day-and-date on HBO Max, exhibitors seemed chipper about the prospect: Winter is coming, COVID cases are spiking across the country, and this made the best of a bad situation. Better than skipping theaters altogether, right?

This week, Warners clarified the terms: “Wonder Woman 1984” is the kickoff for a full year of HBO Max day-and-date — everything released in 2021, from “Dune” to “The Matrix 4.” Maximizing theatrical revenue is no longer the point for Warners; the goal is elevating its struggling streaming site to the level of Netflix and Disney+.

AMC principal Adam Aron had a fit. In a statement released by the exhibitor, he snarled at the prospect: “Clearly, Warner Media 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,” he said. “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.”

A Cinemark spokesperson was more circumspect, with a tone suggesting it would be polite to pretend it hadn’t heard that. (“We are making near-term booking decisions on a film-by-film basis. At this time, Warner Bros. has not provided any details for the hybrid distribution model of their 2021 films.”) Regal Theaters parent Cineworld suggested that the announcement was a negotiating ploy.

Warners has chosen its future. That doesn’t mean the strategy is permanent (it probably isn’t); what’s permanent is the thinking behind it. Even in 2022, when we hope vaccination is the norm and masks are in a dusty corner of the closet, studios will have decided they are neither worried about supporting theaters nor rooting for their decline. The theaters have a business, and so do they. If they intersect, great; if not, so be it.

"Dune"

“Dune”

Warner Bros.

Questions remain. This appeared to be a unilateral decision by the studio; a lot of feelings, to say nothing of deal terms, are going to keep Warners very busy through the holidays. The “Wonder Woman 1984” strategy came with an explicit signing-off by Patty Jenkins; the announcement did not include similar sentiments from Denis Villeneuve or Lana Wachowski or Jon M. Chu (“In the Heights”). How will this impact residuals that help feed union pensions? Agencies will have something to say about this.

Outside the U.S., including Canada, Warners’ 2021 films will be exclusive to theaters. (Although initial international availability for HBO Max will begin next year, for now it’s limited to the U.S.) Foreign box office represents 65 percent-80 percent of the total for most top releases. Since HBO Max is U.S. only, it means that Warners may not be making much of a “sacrifice” with this strategy.

Indications are that tentpole titles will open in those territories about a week earlier, to limit initial piracy issues. If this becomes a long-term strategy, it will emphasize the need to target international audiences.

This decision highlights Warners’ branding, something that gets lost when shared with theaters. The history of change in the industry, particularly in terms of platforms, begins in the U.S. and spreads abroad. Figure that if this succeeds here, they will attempt the same wherever they can.

As Disney and others meld production teams into single units, “content” now encompasses all creative programming. Feature films are losing their elevated status in the entertainment-conglomerate world. Expect audiences to assume new films will be available at home and reduce their interest in going to theaters.

That may be the biggest blow of all. Publicly traded major chains are saddled with deeply depressed stock prices and massive debt. The focus is survival, with a goal of maximizing value in case sale or merger possibilities come along. The HBO Max plan undercut theaters’ value as well as their long-term viability.

F9

“F9”

Universal Pictures/screenshot

It could also reinforce the difficulty theaters face in getting emergency government aid. Financial support packages across the board are struggling in Congress. An industry that is perceived as less essential faces even greater difficulty.

All studios are watching each other as they each experiment with their own streaming paradigms. With Disney+ and Hulu in play, Disney is the closest analog to Warners — but as the owner of the biggest box-office share, it has the potential to be even more damaging.

This is an industry in rapid-fire evolution; the Premium VOD model embraced by Universal, with its then-radical agreement with AMC way back in late July, seems antiquated already. Will customers be happy about paying $19.95 for “F9” a month after release when they can have “Dune” and “Godzilla vs. Kong” — along with everything else on the site — for $14.99 a month?

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HBO Max: Warner Bros. Chose Its Future, Theaters Want to Pretend It Didn’t Happen - IndieWire
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