Warner Bros. has shaken up the traditional distribution models of Hollywood for 2021 at least. Not foreseeing a return to normal movie viewing habits, the studio announced – out of nowhere – that all of its 2021 films will be available to view simultaneously in theaters and on its fledgling streaming service HBO Max. The move comes on the heels of Wonder Woman 1984 being dropped on the streaming service alongside its theatrical debut and has sent shockwaves across the industry.
Hollywood has multiple reasons to be upset. For one, movie theaters have already been having a hard time amidst the pandemic. With audiences reluctant to leave their homes, theaters are struggling with occupancy levels. A move like this means more movies lose their appeal and exclusivity window of being experienced on the big screen first.
And it’s not just minor movies we’re talking about. Warner Bros. has an impressive lineup of films for 2021, all of which will now drop on HBO Max the same day as their theatrical release. The films include Wonder Woman 1984, James Gunn’s The Suicide Squad, Denis Villeneuve’s Dune, Lana Wachowski’s The Matrix 4 and the MonsterVerse entry Godzilla vs Kong. That’s probably over $2 billion in box office dollars that will be affected as a result of this move. And there are plenty of other movies in the list from The Conjuring: The Devil Made Me Do It to Tom & Jerry, Space Jam: A New Legacy, Mortal Kombat, The Many Saints Of Newark and more.
The studio executives however, seem to be in defiance of the challenges such a move would pose. In speaking with The Hollywood Reporter, Warner Bros. Pictures Group chairman Toby Emmerich had this to say:
It allows us to do a global release and a national release in what we think is going to be a checkerboarded theatrical market place for the bulk of 2021. We think where theaters are open, and consumers can go, that a lot of people will choose to go to the theater, especially for big movies.
The part that’s really angered Hollywood though is that these discussions were kept very close to the chest. Studios such as Legendary were not even aware that such a move is being planned and were caught completely off-guard on the announcement. They were already dodging a bidding war for their MonsterVerse chapter, but more on that separately. Similarly, Gunn doesn’t seem too pleased about his film being available day-and-date on a streaming service.
Hollywood’s top brass might be displeased for another, more significant reason. Often, their final pay is determined by some percentage of the theatrical box office grosses. Studios often conceal figures or do “Hollywood accounting” to avoid paying key parties exhorbitant sums. A move like this would result in an even further reduction in top dollar gross revenues for directors, actors, producers and the ilk. Warner Bros. might need to negotiate deals a lot differently to pay them out for the money lost on what could have been potential box office revenue.
But for the top head honchos at Warner Bros., it appears streaming is the new calling, as evidenced by Netflix’s phenomenal growth during the pandemic. Despite a less than stellar debut, with only 8.6 million active subscribers, Warner Bros. has been pushing HBO Max and is intent on making it a hit with the masses. The studio is also quick to assuage concerns, emphasizing that this plan remains a pandemic-only solution though many are doubting if things could ever go back to the way they were once the cat is out of the bag.
Among those reiterating this point was WarnerMedia Studios and Networks Group CEO Ann Sarnoff who had this to say about the move.
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.
The bigger question of course, that studios are refusing to acknowledge is piracy. With films debuting on a streaming service, if pirates are able to get access to it (and in all likelihood, they will), there’s a high resolution copy of the movie now accessible world over. This could spell further losses for the industry as people might prefer to just stay at home and watch a 1080p hi-res print of every Warner Bros. movie instead.
Warner Bros. has clearly ruffled a lot of feathers with this announcement. It now remains to be seen whether the studio will stick to its plan after the massive backlash or will back down and alter its strategy yet again.
