Warner Bros. to bring entire 2021 theatrical slate to HBO Max
Announcement positions the upcoming Wonder Woman 1984 as the beginning of a year long strategy to tackle the COVID-19 afflicted market.
Warner Bros. intends to release each of the 17 films currently on its 2021 slate on HBO Max in the US at the same time as each film opens in US cinemas. Each film will be available on HBO Max for a period of one month, after which the film will revert to being a cinema exclusive before heading to other release windows as normal (digital, disc, streaming, pay-tv, etc).
Not all of the 17 proposed titles have a confirmed release date and it’s possible dates to shift yet again in response to the ongoing COVID-19 situation, but Warner Bros. has promised a “steady pipeline” of films. This is of particular importance to exhibitors who don’t want to get into a cycle of opening and closing sites if the gaps between new high profile titles from Warner Bros. and others are too great.
This is a move to drive new HBO Max subscriptions in the US, absolutely, but Warner Bros. isn’t attempting to kill off its theatrical revenue stream (at least not initially) and the cinema-going experience.
In ordinary circumstances, Warner Bros. would have faced far greater resistance for pulling such a move, but the pandemic has presented them with both a justification (the need to make money from completed titles) and a favourable scenario (the collapse of and continuing uncertainty around the theatrical market).
Sacrificing revenue for subscription gains
On the HBO Max side, the prospect of a constant stream of new tentpole titles may be the convincer needed for some to sign up, as well as the reason why some may keep a subscription for a little longer. If a consumer is spending more time on a streaming service, that service increasingly becomes a core part of their routine and subsequently more difficult to ditch.
On the cinema side, Warner Bros. is seemingly willing to sacrifice some box office revenue with this move. Even with the promise of vaccines on the horizon, it remains to be seen how well the US theatrical sector will recover in 2021. It could be much closer to 2022 before box office revenues approach their pre-2020 levels. Warner Bros. has determined a strategy to see it take whatever money at the box office it can through 2021, instead of waiting it out as other studios appear to be doing.
The pandemic may force a shrinkage of the theatrical sector as cinema owners attempt to recover from nine months of little to no revenue. We might have to travel farther to a cinema and have fewer screenings to choose from, but the theatrical experience will still be there for those who want it (me included). Fandom is a powerful tool in modern popular culture and many franchise superfans will still want to see their favourite characters on the big screen when it’s safe to do so.
The theatrical experience will also still be there for more casual moviegoers who may not want a HBO Max subscription but might like to see three or four of the Warner Bros. releases across the year. Warner Bros. isn’t offering a simultaneous digital rental option in the US, which means that cinemas will still be the way to see these titles upon initial release for consumers who aren’t keen on HBO Max.
These high profile simultaneous releases may even cause an increase in demand for the films. Demand however is finite and it’s possible the move will draw revenue that would’ve normally been seen in later release windows if, as an example, someone opts for a HBO Max subscription instead of purchasing a digital rental of film.
Maximising advertising impact
Releasing simultaneously in cinemas and on streaming has the distinct advantage of helping to maximize marketing spend. For big tentpole releases, distributors spend on advertising to build as much awareness right up to release and then increasingly rely on word-of-mouth and social media to sustain interest as long as possible, or until the next event movie moves in to occupy the public consciousness.
Under this new strategy, Warner Bros. now has two options through which to capitalize on people’s interest in the film at this peak of awareness. As an aside, this perhaps also explains why Warner Bros. didn’t simply opt for a shorter theatrical window ahead of a release on HBO Max. In this scenario, Warner might have felt the need to spend more and for longer on advertising to maintain a high level of interest through to the HBO Max release.
International options more limited
On the international front, options are more limited as HBO Max is only currently operating in the US. A rollout in some European and Latin American territories is anticipated for the second half of 2021 but a launch in some territories, such as the UK, will be more complicated due to existing deals with pay-tv operators for HBO content.
Wonder Woman 1984 is set to play in whatever cinemas are open across much of the rest of the world in the week leading up to the US release on Christmas Day. Again, theatrical revenues will be lower than normal, but this release allows Warner Bros. to make some money. Last week, Variety reported that talks are ongoing between Warner Bros. and Sky in the UK over an agreement to bring Wonder Woman 1984 to Sky’s digital or pay-tv platforms earlier than usual. Similar deals could yet be done in other territories where COVID-19 will impact people’s opportunity to see the superhero sequel in cinemas.
Warner’s 2021 titles will open overseas in cinemas in a similar pattern or on the same day as in the US. Additionally, keeping the films off digital platforms and exclusively in cinemas overseas should make piracy more difficult ahead of each film’s US release. It remains to be seen whether each film will be made available outside of cinemas in non-US territories, similar to the suggested deal with Sky for Wonder Woman 1984, until the pandemic has subsided enough to allow a majority of cinemas to reopen and stay open.
Looking to 2022
The larger question will be what happens when (all fingers crossed) life returns to some sort of normal towards the end of 2021 and into 2022. Warner Bros. has called this strategy a “unique one-year plan” but it’d be naive to believe that it wouldn’t at least consider a similar or modified strategy for 2022, if the 2021 experiment proves successful. In contrast, if the US theatrical sector recovers well or significant HBO Max sign-ups don’t materialise, Warner Bros. may well seek to return to the traditional theatrical first window.
I wouldn’t have predicted that this is how the film distribution industry was to change, but a change was certainly coming. Pre-pandemic, Hollywood tentpoles were costing more than ever to produce and were under increasing pressure to generate huge box office revenues in the opening few days of a theatrical release. With more viewing choices available to consumers than ever before, something had to give eventually. I think it’s too simplistic to say that COVID has solely caused this change, but it has certainly accelerated the arrival of it.
