In major break from tradition, Warner Bros moves ‘Dune,’ ‘Matrix’ and all its 2021 movies to HBO Max
Dune #Dune
Warner Media on Thursday shocked the entertainment world by saying it would put all of its 2021 movies — a 17-title list that includes “Dune,” “In the Heights” and “The Matrix 4” — on HBO Max at the same time they play in theaters, upending a business model that has long served it in the hope of redeeming its flagging streaming service.
The shift stretches well beyond the next few uncertain shutdown months to include films scheduled for the second half of 2021. It suggests that with the move, Warner and corporate parent AT&T were hoping to boost HBO Max at the expense of theaters, not simply reacting to the pandemic.
Some studios have put movies on digital platforms as one-offs during coronavirus shutdowns. Disney is about to debut Pixar’s “Soul” on Disney Plus, while WB has “Wonder Woman 1984” coming to HBO Max at the same time as theaters in three weeks.
But this news goes much further, sweeping up a wide range of titles. The list also includes new movies in the Space Jam, Godzilla and Conjuring franchises; an adaptation of the “Mortal Kombat” video game; the Richard Williams story “King Richard”; a new take on the DC Comics title “The Suicide Squad”; and the “Sopranos” prequel “The Many Saints of Newark.” All of these films will be available on HBO Max for their first month of release, in addition to any theaters that wish to play them. The move would just affect U.S. releases; HBO Max is not available overseas.
The announcement also one-ups deals Universal Pictures made with top chains AMC and Cinemark, which allow for the biggest films to at least play exclusively in theaters for three weekends before moving to streaming.
The company’s movies, such as “The Joker” and “It: Chapter Two,” took in more than $1 billion at the U.S. box office in 2019. (A studio typically retains about 60 percent of domestic receipts.)
But AT&T, and Wall Street, have been eager to see the growth of HBO Max. The company has struggled to attract subscribers to its $15/month service since launching it in May, even failing to convert about three-quarters of current HBO subscribers, who do not need to pay extra to receive Max.
Last month, AT&T said that the service was available to about 29 million subscribers — either those who signed up or those who could get it for free as existing HBO subscribers. That ranks well below Disney Plus’ 74 million subscribers (though Disney’s figure includes tens of millions of overseas subscribers).
In its announcement, however, Warner Media sought to emphasize the impact of coronavirus over the needs of Max.
“We’re living in unprecedented times which call for creative solutions, including this new initiative for the Warner Bros. Pictures Group,” said Ann Sarnoff, chair and chief executive of WarnerMedia Studios and Networks. “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.”
The news — basically eliminating a chance for major WB movies in theaters 2021 after the pandemic has gutted 2020 — created an instant backlash among theater owners.
“I think it’s ridiculous and short-sighted,” said Chris Johnson, chief executive of Classic Cinemas, which operates more than 100 screens at theaters in Illinois and Wisconsin. “You don’t have to throw out every model that worked in the past to try something that may not.”
Calling it “kicking theater owners when they’re down,” he said he’d be less likely to play movies if they’re available in his customers’ homes.
The National Association of Theatre Owners that represents the country’s 40,000 movie screens did not immediately comment.
The news was startling in part because WB has long been very theater-friendly. This studio released “Tenet” in U.S. theaters when other studios sat out the summer in part to “protect the model” — give hurting theaters at least some revenue. Even if it’s only for 2021, some theater owners say, the WB move could endanger that model as more and more theaters won’t be able to pay the rent without a “Dune” or “Matrix” on its screens.
Still, most other studios are eager to preserve the theatrical business — U.S. ticket sales generated $11.4 billion in 2019 — even as they ease into a digital world that Wall Street and many executives believe is it future.
While social media Thursday was awash in talk of others potentially following suit — “Black Widow” was trending as fans called for Disney to put the movie on Disney Plus — experts say a shift of this scale was unlikely. Other companies, after all, don’t need digital subscribers the way WarnerMedia and AT&T need HBO Max subscribers.
Experts question whether the plan is even economically sustainable for event movies — franchise titles that cost at least $200 million to produce. Most streaming services make a lot more lower-budget titles in a volume game, while studios need the billion dollars a theatrical film will earn around the world. Even WB has sent mixed signals on this; it is currently shooting a new take on “The Batman,” an expensive movie with star Robert Pattinson, that could only recoup its budget with a major theatrical release.
It also remains unclear if the shift will work in drawing significant number of subscribers to the service.
The Max move is one of the biggest since Warner Media got a new chief executive, Jason Kilar, in the spring. Kilar comes from Hulu, which was one of the first to offer digital subscriptions to legacy content.
This is a developing story. Please check back for updates.