Warner Bros. plans film industry remodel

When Warner Bros. Pictures announced in November that Wonder Woman 1984 would come out on Christmas Day in theaters and on the streaming platform HBO Max, theater owners, desperate for a blockbuster to draw back audiences, welcomed the news. Last week, however, the studio made the unwelcome decision to extend that hybrid model to all its movies slated for release in 2021.

“Some of our industry’s biggest filmmakers and most important movie stars went to bed the night before [WarnerMedia’s decision] thinking they were working for the greatest movie studio and woke up to find out they were working for the worst streaming service,” Christopher Nolan, one of Warner Bros. biggest directors, told The Hollywood Reporter.

Todd Halstead, executive director of the Independent Cinema Alliance (ICA), said theater owners support new ideas to get through the pandemic but don’t want to upend the traditional model of film distribution in the long-term. “Given that COVID-19 vaccines will begin distribution in the coming weeks, the ICA calls on our partners at Warner Bros. and other studios to help write the industry’s comeback story with a recommitment to exclusive theatrical content,” the industry group said in a statement. Some top-shelf actors and directors, who typically share in box office receipts, said they resented studios pushing them into alternate compensation arrangements. Others decried having their vision for a big screen release compromised.

Sending major films “straight to video” used to be considered an insult. But some studios have made it work during the pandemic. In April, Universal Studios proved premium video on demand could be a viable alternative to theatrical release when Trolls World Tour skipped the box office and exceeded profit expectations. Disney followed suit in September, releasing its long-delayed Mulan to Disney+ subscribers for an additional charge. Studios still held back the releases of their most expensive movies, but with box office sales down more than 90 percent last month compared with November 2019, it’s unclear when, if ever, audiences will return.

Warner Bros. Pictures could lose millions of dollars by releasing Wonder Woman 1984 and other films before the pandemic subsides. Its parent company, AT&T, hopes to reap long-term profits in another sphere. It also owns fledgling streaming service HBO Max, which has half the subscribers of competitors Netflix and Disney+. Offering new films throughout 2021 could give the service the boost it needs.

In the long-run, AT&T thinks it can improve the business with a vertically integrated model. The studio would make less money, but overall profits might increase. AT&T owns the content, the streaming platform, and in many cases the necessary internet service providers and cellular services. Christopher Nolan said he doesn’t buy it: “Even the most casual Wall Street investor can see the difference between disruption and dysfunction.” But time will tell if the strategy works.