WarnerMedia’s decision to put all of its 2021 films on HBO Max is a shortsighted decision that will have major repercussions for Hollywood.
This week, a seismic shift hit the cinema industry. WarnerMedia, one of the world’s biggest movie studios, announced that all of its 2021 films, including blockbusters such as Dune and The Matrix 4, would debut on HBO Max and in theaters at the same time. Each movie would stream for one month before leaving the platform, an unusual arrangement seemingly geared toward giving subscribers a stream of new films, while also allowing movies to play in theaters. In a statement, WarnerMedia described this hybrid model as “a strategic response to the impact of the ongoing global pandemic.” This apparent compromise, however, will be disastrous for theaters. The movies WarnerMedia will put on HBO Max, starting with Wonder Woman 1984 on Christmas, span every genre and budget size. Audiences will get big-franchise movies (Godzilla vs. Kong and The Suicide Squad), awards-friendly fare (King Richard and Judas and the Black Messiah), family films (Tom & Jerry and Space Jam 2), a cinematic prequel to The Sopranos, a new Clint Eastwood movie, and more. Audiences will have little incentive to pay more to see these films in theaters, even if pandemic restrictions permit, creating a new set of consumer expectations that will be hard to undo. Theater chains are right to fear for their survival. And WarnerMedia’s move, which seems more motivated by panic than a desire for long-term success, is a risky bet for studios, too. In the short term, everything WarnerMedia is doing makes sense. Even with a COVID-19 vaccine in the early stages of a rollout, the American theater industry is unlikely to bounce back to anything close to normal before the summer of 2021—that’s a long while to wait for some of these films, which were completed ages ago. Other cinema markets, particularly in Asia, are booming because of their countries’ better management of the pandemic. This simultaneous-release strategy is a way for Warner to tap into box-office grosses worldwide while strengthening the appeal of HBO Max at home. Insiders at the studio are insisting that this is just a temporary change that can easily revert after 2021.
