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“I guess the theaters will just be Halloween stores.”
That was the offhand response from a seasoned studio executive on Thursday, joining a chorus of power brokers, agents and other Hollywood insiders astonished by news that Warner Bros. Pictures will be releasing 17 films – all of its slate 2021 – simultaneously in theaters and on the HBO Max streaming service.
In the lead up to the announcement, which will make Lin-Manuel Miranda’s “Matrix 4,” “Dune,” “In the Heights” and “The Suicide Squad” available free to HBO Max subscribers for 31 days a day. even from their theatrical release, film journalists began to soften the pitch on Twitter. They promised an extinction-level event, the kind audiences typically find in blockbusters concocted by Warner Bros.
Many in Hollywood expected mainstream studios to follow the lead of Universal Pictures, which negotiated a major deal in July to shrink the theatrical window – the exclusive period when films are shot in theaters – to just 17. days before Universal had the option of their pay-per-view video-on-demand merchandise. But few expected such a drastic change.
“There is no doubt that WarnerMedia is capitalizing on this pandemic moment and making a decision for the future of its business by prioritizing streaming. The question is to know at what price this form of art? asked a C-suite executive at a rival studio.
Another well-known and high-profile executive estimated that WarnerMedia had “easily parted with $ 2 billion in assets, packaged for HBO Max, which will see absolutely no return.”
The executive references mega-budget genre and franchise titles like “The Matrix 4,” DC’s “The Suicide Squad,” Denis Villeneuve’s “Dune,” and big-earning potential like the feature film prequel “ Sopranos ”“ The Many Saints of Newark, “In The Heights” by Lin Manuel Miranda and “Reminiscence” by Hugh Jackman. The box office returns of these films will certainly be affected by the decision to go ahead with a hybrid distribution strategy.
While many in show business have been following the controversial debate around theatrical showcases for years, in which owners of global theaters claim that exclusivity on the big screen is essential to making films a lasting part of the cultural conversation (and essential for selling popcorn and soda), few were prepared for the speed with which WarnerMedia dropped this particular ax.
The CEO of Warner Bros. Entertainment, Ann Sarnoff, and film group chairman Toby Emmerich briefed CAA, WME, UTA and other major talent agencies on Thursday morning just before the news broke, insiders said. The day-to-day job of a studio manager is to keep talent happy, and many traditional celebrity offerings are structured around box office participation. By streaming movies on HBO Max in the midst of a pandemic, where theaters in major markets are likely to remain closed for months to come, star compensation will clearly take a hit when home viewing is safer. Restructuring those deals and getting their top stars for 2021 – including Will Smith, Angelina Jolie, Timothee Chalamet, Margot Robbie, Jackman and Miranda – to be on a long list of administrative headaches the surprise announcement will bring to the studio. .
The news particularly shocked theater owners, whose businesses were decimated by the pandemic. Ahead of Thursday’s bombshell, Warner Bros. had announced that “Wonder Woman 1984” would debut on HBO Max at Christmas, the same day it begins hitting theaters. Normally, this would have provoked outrage from the exhibitor community. But in this case, the theater operators realized that this was a unique situation in response to the pandemic, and they were desperate for a new product to offer to customers. They couldn’t predict what was to come.
Part of the reason movie theater owners felt betrayed by the news that Warner Bros. HBO Max relied on to bring its movie roster to the masses as the studio broke the news as many vaccines began to be approved. Exhibitors said they would understand if Warners sent movies to HBO Max on a case-by-case basis. But the decision to send the 2021 slate in full meant they still believed the return of cinema was many, many months away.
“The one-year part was a little confusing,” said Mark O’Meara, who owns two theaters in Fairfax, Virginia. “They claim it’s a COVID model. I think there is some truth to this. But the theaters are closing and it is getting more and more difficult.
He adds, “I don’t think we’ll ever go back to three months,” referring to the standard 90-day window.
The biggest cinema chains have mostly remained silent; many other tours declined to comment. In a statement, AMC CEO Adam Aron did not mince words to express his frustration.
“Obviously, Warner Media intends to sacrifice a considerable portion of the profitability of its movie studios division, and that of its production partners and filmmakers, to subsidize its HBO Max start-up,” Aron said. . “As far as AMC is concerned, we will do everything in our power to ensure that Warner does not do it at our expense. We will aggressively pursue economic conditions that preserve our business. “
Cinemark, one of the country’s largest theater chains, said it would rate films individually before booking them to play in theaters.
“At this time, Warner Bros. has not provided any details on the hybrid distribution model for its 2021 films,” a spokesperson said in a statement.
Privately, theater owners are trying to remain optimistic that their hybrid model will not survive the pandemic and praying that other studios do not follow suit.
“If Disney follows this model in any capacity, the theaters are over,” one movie executive said on condition of anonymity.
Jeff Logan, who runs a small chain of theaters in South Dakota, said he was “surprised” by the news, calling it “rushed” and “lacking in forethought.” He felt dismay, not towards those responsible for the distribution of Warner Bros., but rather towards the superior powers of WarnerMedia and its owners, AT&T.
“It’s like they’re not listening to the news – or listening to three-month-old news reports. It doesn’t make sense when we’re about to hand out vaccines, ”Logan said. “To do it in one frame, I could figure it out. But the whole year list made absolutely no sense.
He is not blind to the fact that even with a vaccine, people might be reluctant to go back to the movies immediately. But he is convinced that once a significant portion of the population is vaccinated, the public will be eager to watch the next big blockbuster on the big screen.
“I think things will get back to normal sooner than Warner Bros.’s decision indicates,” Logan said. “They are using it as a cover to push HBO Max. I hope they will come to their senses sooner than after a year.
In the meantime, theater owners fear that legions of fans will get used to watching new movies at home and fear that it could have irreversible effects.
“We’ll see how it goes. I just hope the theaters are there to see how it goes, said Logan. “They are playing with fire to the detriment of our livelihoods.”
As groundbreaking as 2021 will be for Warner Bros. and the film industry, the sequel C ruler Variety said Thursday’s bombshell came down to one thing: Wall Street.
“It’s AT&T that justifies the billions they paid for Warners Bros,” the executive said. “It’s bad for creativity and the long run, but is it good for their stock this week?” Absolutely.”
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