What Warner Bros.’ New 2021 Release Strategy Means For The Film And TV Industry

In an announcement on Thursday Warner Bros. declared that its entire slate of 2021 movies will be simultaneously released on its streaming service HBO Max – in the U.S. – and at cinemas. Originally the company had stated that Wonder Woman 1984 would follow this strategy, largely due to the pandemic and its effect on theater chains, but there was no visibility on the continuance of such a scheme.

The raft of movies being released through this hybrid methodology will include big-budget films such as Suicide Squad 2, Space Jam: A New Legacy, Matrix 4, Godzilla vs. Kong, Dune, Black Messiah and Tom and Jerry. Every film will be released on HBO Max in 4K Ultra HD and HDR to mitigate any perceived drop-off in quality. 

“We’re living in unprecedented times which call for creative solutions, including this new initiative for the Warner Bros. Pictures Group,” said Warner Bros. CEO Ann Sarnoff. 

“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 justification behind the move

Let’s leave out HBO Max for a second. When Universal tried to pull this stunt earlier on in the year it was met by condemnation from theater chains, with the now-notorious open letter power play from AMC Entertainment Holdings Inc
. Chief Executive Adam Aron to Universal iterating that their theaters in the U.S., the Middle East or Europe would no longer play Universal movies. 

The squabble brought about an agreement between the two behemoths in which movies in the future would have a shorter 17-day exclusivity window before being accessible to premium video-on-demand (PVOD) platforms. It is also expected that AMC will make a cut from at least some of those PVOD sales on the switch. 

This, however, is a much more unprecedented and purposeful move then Universal’s and at a much greater level threatens the balance between cinemas and studios.

The more notable difference between the two studios’ actions is that Warner Bros. took a much bigger hit from its tentpole Christopher Nolan film Tenet, reportedly losing hundreds of millions of dollars off of its – usually fairly accurate – projections. That coupled with the uncertainty over the future of cinemas, especially in 2021, with the slow rollout and uptake of Covid-19 vaccines makes the decision make sense.

One would surmise that there must have been an in-depth conversation between WarnerMedia and the relative theater chains as the distribution plan is very specific in mentioning that the one-month access on HBO Max is just for the U.S. and not worldwide. With many other parts of the world struggling with the pandemic it will be interesting to see whether the domestic only principle stays true. 

The streaming war 

It’s no secret that WarnerMedia wants HBO Max to succeed and is a major element in its plans. Seeing the global success of Netflix
, predicated primarily on their programming and talent, gives the group cause to pause on why their offering isn’t picking up as much steam. 

Interestingly this solution rings true as ever to the hit two birds with one stone analogy, as WarnerMedia can simultaneously grow HBO Max with very exclusive big-budget content – usually only reserved for cinemas – and solve the major issue of reticence going to the theater from the general public. Though this solution is just for the U.S., at least for now.  

This elaborate new distribution process will almost certainly attract people to the platform and people may very well stay on for further releases and additional content. Similarly to how Netflix kept a lot of its subscribers after hit series’ such as House of Cards. 

Next year and beyond 

It will be interesting to see what happens after the pandemic subsides and cinemas begin to pick up some steam again. If HBO Max turns into a roaring success as a result of this move you can’t imagine that WarnerMedia would turn back based on not wanting to further disrupt the already fragile studio-exhibitor relationship.

Especially as in 2019 the number of individuals going to the movies dropped dramatically. Averaging out at just four times for the year that one person would go. Representing an almost twenty-year low, only bested by 2002’s numbers. 

With this fact, it’s difficult for WarnerMedia’s parent company, AT&T
, to go to investors and not opt for a strategy like this to at least stop the proverbial bleeding caused through revenue loss due to the pandemic’s side effects on the film and TV industry. 

With Disney
also teasing going further down this route with its past exhibition strategy with Mulan on Disney Plus, it’s starting to seem like regardless of the resurgence of cinemas, dual theater/streaming releases are here to stay.

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