Warner Bros. to Release All 2021 Films on HBO Max, in Theaters Simultaneously -- 2nd Update
December 03 2020 - 4:33PM
Dow Jones News
By Erich Schwartzel and Joe Flint
LOS ANGELES -- AT&T Inc.'s Warner Bros. will release its
entire 2021 slate of theatrical films simultaneously in theaters
and on its HBO Max streaming service, the studio said Thursday,
taking the most drastic step yet in eliminating the exclusivity
theater chains have enjoyed for decades.
Warner Bros. movies will play on HBO Max during their first
month of theatrical release before leaving the service while
staying in theaters.
The hybrid model will apply to all of Warner Bros. films next
year, from smaller-scale releases to big-budget movies that
traditionally require gargantuan box-office sales to turn a profit.
That includes the science-fiction adaptation "Dune," a movie
version of the musical "In The Heights" and a new installment of
the "Matrix" franchise.
Warner Bros. last month said it was going to release "Wonder
Woman 1984" on HBO Max Christmas Day for a month at the same time
the movie went into theaters. The announcement Thursday covers 17
films that are scheduled for release next year.
"It's threading a needle in the middle of a pandemic," said
Carolyn Blackwood, the studio's chief operating officer. "We
weren't comfortable sitting on our hands or punting these movies
into oblivion."
The decision is sure to jolt a Hollywood in the midst of
overhauling how it makes and distributes films. With a majority of
theaters closed in the U.S., studios have shifted focus to their
streaming operations, where subscriptions are the key metric of
success. That has meant some of the year's biggest releases have
premiered in the living room, a shift that could outlast the
pandemic and spell economic ruin for theater owners desperate to
reopen.
As the pandemic has persisted, it has become increasingly
difficult for studios to manage delaying films or deciding to shift
them directly online. Letting movies sit unreleased on the shelf
can impact corporate tax liabilities, debt repayments and
relationships with top filmmakers and actors whose compensation is
tied to a box-office release.
For HBO Max, having a slate of expensive, theatrical-quality
releases could help drive subscriber growth to the new streaming
platform, which has struggled to find breakthrough content in a
crowded marketplace. HBO Max is paying a license fee for the
movies, Ms. Blackwood said.
The strategy, which will also include major big-budget films
such as a new "Space Jam" and a sequel to "Suicide Squad," signals
that Hollywood doesn't expect business to return to normal for the
foreseeable future -- and could prove a harbinger of new
distribution strategies even after the pandemic ends. By taking
such high-profile releases to its streaming service, AT&T and
other studios are mounting a serious challenge to Netflix Inc. in
the industrywide race for exclusive content that drives and keeps
subscribers.
Ms. Blackwood stressed that this is a temporary strategy meant
to deal with a damaged theatrical business model. "The goal is to
augment that theatrical audience and Covid-impaired box office,"
she said.
WarnerMedia Chief Executive Jason Kilar said in a memo
explaining the move, "we see an opportunity to do something firmly
focused on the fans, which is to provide choice, whether that
choice is to enjoy a great new movie out at the cinema, to open up
HBO Max, or to do both."
Launched in May, HBO Max includes HBO content as well as a huge
amount of movies and TV shows from Warner Bros. and elsewhere.
Consumers have yet to embrace the platform, as it only has 8.6
million subscribers so far. WarnerMedia executives have attributed
this to confusion in the marketplace about HBO Max versus HBO.
In addition, the service is still not available on Roku, a major
gatekeeper for streaming platforms and Comcast Corp., the nation's
largest cable company, hasn't yet started distributing HBO Max to
its pay-TV customers via their set-top boxes.
Other Hollywood studios, such as Comcast Corp.'s Universal
Pictures, have crafted models that combine theatrical release with
at-home streaming or premium rental options. Exhibitors have long
chafed against any distribution plan that impedes their
exclusivity, but the pandemic has driven several major chains to
accept such terms.
While domestic exhibitors accepted Warner Bros.' decision to
release "Wonder Woman 1984" in theaters on Christmas Day -- even
though the film will simultaneously be made available online -- it
is unclear how theater chains will react to the studio following a
similar strategy for its entire 2021 slate. Typically, studios and
theaters generate the bulk of a film's box-office revenues during
the first few weeks of release.
Write to Erich Schwartzel at erich.schwartzel@wsj.com and Joe
Flint at joe.flint@wsj.com
(END) Dow Jones Newswires
December 03, 2020 16:18 ET (21:18 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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