Moving forward, studio branding matters more. If it works for theaters, fine; if not, it’s out of their hands.
When Warner Bros. announced that “Wonder Woman 1984” would be going day-to-day on HBO Max, exhibitors seemed cheery about the prospect: Winter is coming, COVID cases are increasing across the country, and that has made the most of a bad situation. Better than skipping theaters altogether, right?
This week, Warners clarified the terms: “Wonder Woman 1984” is the kick-off for a full year of HBO Max day-and-date – all released in 2021, from “Dune” to “The Matrix 4.” Maximizing theater revenue is no longer the point for Warners; the goal is to elevate its struggling streaming site to the level of Netflix and Disney +.
AMC principal Adam Aron had a seizure. In a statement released by the exhibitor, he growled at the prospect, “Clearly, Warner Media intends to sacrifice a sizable portion of the profitability of its studio division, and that of its production partners and directors, to subsidize its HBO startup. Max- “he said. “As for AMC, we will do everything possible to ensure that Warner doesn’t do it at our expense. We will aggressively pursue economic terms that preserve our business. “
A Cinemark spokesperson was more circumspect, in a tone that suggests it would be polite to pretend not to have heard him. (“We are making short-term movie-by-movie booking decisions. As of now, Warner Bros. has not provided any details for the hybrid distribution model of their 2021 films.”) Cineworld, the parent of Regal Theaters, suggested that the announcement was a negotiating ploy.
Warners has chosen its future. This doesn’t mean the strategy is permanent (it probably isn’t); what is permanent is the thought behind it. Even in 2022, when we hope that vaccination is the norm and the masks are in a dusty corner of the closet, the studios will have decided that they are not concerned with supporting theaters or cheering on their decline. Theaters have an activity, and so do they. If they intersect, great; if not, so be it.
Questions remain. This appeared to be a one-sided decision by the firm; many feelings, not to mention the terms of the deal, will keep Warner busy during the holidays. The “Wonder Woman 1984” strategy came with an explicit signature from 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 the residues that help fuel union pensions? Agencies will have something to say about it.
Outside of the United States, including Canada, Warner’s films for 2021 will be exclusive to theaters. (Although initial international availability of HBO Max will begin next year, it is limited to the US for now.) The foreign box office accounts for 65-80% of the total for most major releases. Since HBO Max is only in the US, it means Warners may not be making a big “sacrifice” with this strategy.
The indications are that the tentpole titles will open in those territories about a week earlier, to limit the initial problems of piracy. If this becomes a long-term strategy, it will emphasize the need to reach out to an international audience.
This decision highlights the Warners brand, something that is lost when shared with theaters. The story of change in the industry, particularly in terms of platforms, begins in the United States and spreads overseas. Imagine if this is successful here, they will try the same wherever they can.
While Disney and others merged production teams into single units, the “content” now encompasses all of the creative programming. Feature films are losing their high status in the entertainment conglomerate world. Expect audiences to assume that new movies will be available at home and reduce their interest in going to the movies.
It could be the biggest blow of all. Major publicly traded chains are burdened with deeply depressed stock prices and massive debt. The goal is survival, with the aim of maximizing value in the event of a possibility of sale or merger. The HBO Max plan has reduced the value of theaters and their long-term profitability.
Universal Pictures / screenshot
It could also reinforce the difficulties theaters face in obtaining emergency government aid. Financial support packages across the board are struggling in Congress. An industry perceived as less essential faces even greater difficulties.
All studios look at each other as they each experiment with their own streaming paradigms. With Disney + and Hulu in play, Disney is the closest analog to Warner, but as the holder of the largest grossing share, it has the potential to be even more damaging.
This is a rapidly changing industry; the Premium VOD model embraced by Universal (which lacks a streaming site), with its then radical deal with AMC in late July, already seems out of date. Will customers be happy to pay $ 19.95 for “F9” a month after release when they can get “Dune” and “Godzilla vs. Kong” – along with everything else on the site – for $ 14.99 a month?
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