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WarnerMedia didn’t have to wait until Wonder Woman 1984 debuted both on HBO Max and in theaters: The Burbank, CA-based studio is putting its entire 2021 theatrical slate on HBO Max for their respective first month of release, concurrent with a global cinema release.
Following the one month HBO Max access period domestically, each film will leave the platform and continue theatrically in the U.S. and international territories, with all customary distribution windows applying to the title.
And get a load of what you’ll be able to see in-home next year: Denzel Washington’s The Little Things, Judas and the Black Messiah, Tom & Jerry, Godzilla vs. Kong, Mortal Kombat, Those Who Wish Me Dead, The Conjuring: The Devil Made Me Do It, In The Heights, Space Jam: A New Legacy, The Suicide Squad, Reminiscence, Malignant, Dune, The Many Saints of Newark, King Richard, Cry Macho and Matrix 4.
This morning’s release reads, “The hybrid model was created as a strategic response to the impact of the ongoing global pandemic.” Movie theaters aren’t apt to be entirely happy with this and it will be interesting to see what they charge for admission to the Warner Bros’ movies. Exhibition busted their butts to get open for Tenet, and today’s news may come to some a thumb in the eye.
That said, look at WarnerMedia’s dilemma: Is it better for the studio to reshelve their entire slate and collect dust and interest charges? And for those theaters that are open, is it fair that they don’t have any notable product to play? How does the studio commit to $40M P&A domestic spends in advance when the U.S./Canada marketplace may not be open or unpredictable?
Exhibitors, like AMC, may perceive this model as some sort of manna from heaven. As my mother-in-law says, “There’s no such thing as a coincidence” and well, what do you know? AMC has 200M shares up for sale as of today. Buzz hit on Thanksgiving eve that WarnerMedia shoved off a $200M bid by Netflix for Legendary’s Godzilla vs. Kong so that they could make a play at putting the movie on HBO Max. Warners denied that, saying the pic was committed to theatrical. That was only half true.
Today’s earth-shattering, gravity defying announcement was made by Ann Sarnoff, Chair and CEO, WarnerMedia Studios and Networks Group (of which Warner Bros. is part) and Jason Kilar, CEO, WarnerMedia.
There were murmurs at rival studios that WarnerMedia was going to drop a bombshell in December — no one knew it would be this big. Even some of the creators close to the movies, I can tell you, weren’t in the fold on this decision (except those with financial stakes). This is clearly a top down corporate decision as the the conglom bets aggressively on HBO Max, which hasn’t been an immediate triumph out of the gate. The new streaming service’s hurdle has been distribution with only 8.6 million accounts activated, but another 28.7 million not switched on even though there’s no-cost HBO Max access to current HBO subscribers. Third-party distribution has also been a bottleneck, though the company recently reached a deal with Amazon Fire TV. Roku, which has 46 million active accounts, is another top-tier streaming venue where HBO Max is not yet available.
Many are expecting that Wonder Woman 1984 will already lose money, with financial analysts in the know saying that the $200M DC sequel will need to do 40% more than Tenet‘s current global take of $357.8M to hit breakeven. “If Wonder Woman 1984 does Tenet numbers, it will lose money,” one industry insider told Deadline recently.
Well, here’s an entire annual theatrical slate which will trade in any possibility of a domestic box office comeback for sheer subscriber numbers — that is, if they come. This is a hedged bet that a COVID-19 vaccine is not coming soon enough to quell numbers and reopen cinemas. This despite all the headlines about one, and Pfizer, and the Dow’s recent aggressive upswing in response to the upbeat headlines. However, Warners believes that the pipeline is getting clogged, and the ecosystem needs to live, and that even if the vaccine comes, it may not reopen theaters fast enough and spur foot traffic. Some medical sources say that a nationwide accessible vaccine may not come until October.
Clarifies and assures Chief Operating Officer, Warner Bros. Pictures Group Carolyn Blackwood, “This is a temporary 2021 plan. We have to support exhibition with the product. We don’t think we’re changing the economics of these movies any more than the pandemic has. We’re adding another interval and period for revenue with HBO Max.”
“We’re living in unprecedented times which call for creative solutions, including this new initiative for the Warner Bros. Pictures Group,” said Sarnoff in a statement. “No one wants films back on the big screen more than we do. We know new content is the lifeblood of theatrical exhibition, but we have to balance this with the reality that most theaters in the U.S. will likely operate at reduced capacity throughout 2021. With this unique one-year plan, we can support our partners in exhibition with a steady pipeline of world-class films, while also giving moviegoers who may not have access to theaters or aren’t quite ready to go back to the movies the chance to see our amazing 2021 films. We see it as a win-win for film lovers and exhibitors, and we’re extremely grateful to our filmmaking partners for working with us on this innovative response to these circumstances.”
“After considering all available options and the projected state of moviegoing throughout 2021, we came to the conclusion that this was the best way for WarnerMedia’s motion picture business to navigate the next 12 months,” said Kilar. “More importantly, we are planning to bring consumers 17 remarkable movies throughout the year, giving them the choice and the power to decide how they want to enjoy these films. Our content is extremely valuable, unless it’s sitting on a shelf not being seen by anyone. We believe this approach serves our fans, supports exhibitors and filmmakers, and enhances the HBO Max experience, creating value for all.”
“This hybrid exhibition model enables us to best support our films, creative partners and moviegoing in general throughout 2021,” said Toby Emmerich, Chairman, Warner Bros. Pictures Group in a statement. “We have a fantastic, wide ranging slate of titles from talented and visionary filmmakers next year, and we’re excited to be able get these movies in front of audiences around the world. And, as always, we’ll support all of our releases with innovative and robust marketing campaigns for their theatrical debuts, while highlighting this unique opportunity to see our films domestically via HBO Max as well.”
It’s going to be very interesting to see the outcome of WarnerMedia’s decision here today and its ramifications on exhibition, rival studios and other streaming players like Amazon and Netflix. Netflix has been aggressive about closing the window, and always ran into headwinds when trying to make a deal with big exhibition. The HBO Max deal changes everything.
Will Disney following WarnerMedia’s lead here and dump the entire frosh Marvel movies on Disney+? How does exhibition come out of this? When Cineworld/Regal reopens, will they even play Warner Bros.’ titles?
Here’s WarnerMedia’s video about today’s announcement: