Warner Bros. Warning Shot
In case you missed it, Warner Bros. just generated one of the most consequential headlines in movie history. Theater owners across the country had their worst nightmare come true. In 2021, Warner Bros. will release their entire slate of movies to their HBO Max streaming service on the same day they release them to theaters. This means theater chains like AMC and Cinemark will lose the exclusivity that often generates large crowds when major films are released. Warner Bros. 2021 slate includes Dune, starring red hot talents Timothée Chalamet and Zendaya, The Matrix 4, Godzilla Vs. Kong, The Suicide Squad and, perhaps most importantly, Space Jam: A New Legacy. In other words, these are the big guns. Next year, many of the most anticipated titles and most well-known brands will be available to stream on Day 1 of their release.
This is a staggering turn of events. This puts next year’s biggest movies on people’s cell phones on the same day they are released into theaters. This is, of course, not a coincidence, as Warner Bros. is owned by AT&T, a multinational conglomerate that makes most of its revenue from cell service. For them, the future is one where people are consuming as much data as possible and they are using this as a moment to drag that future into the present.
While the data play is the long term objective, their current business priority is maximizing HBO Max’s potential. At launch, HBO Max didn’t exactly light the world on fire, despite having a library that even the mighty Netflix should envy. They currently have nearly 30 million subscribers, but that number is less than half of Disney+ and pales in comparison to Netflix’s 195 million. They have a lot of catching up to do if they want to compete in that space and with Peacock, Hulu, YouTube Premium and more, all fighting for the same customers, companies will need to be bold to win them over. And nothing is more bold than breaking the theatrical window wide open.
The big question on everyone’s minds is whether this is the real end for movie theaters. Perhaps in the future, going to the movies will be like going to the opera or the ballet—the kind of experience reserved for special occasions instead of the weekly habitual pastime. Or will 2022 bring a return to the equilibrium we are all used to? Hard to say right now, but there are clues pointing in both directions.
On the one hand, this could be the beginning of the end. Warner Bros. made this decision without much information about how their upcoming blockbusters will perform on HBO Max. This seems like their attempt to align themselves with what the future will be. Theaters were already declining before the pandemic and 2020 seems like its given studios an excuse to pull the plug and try something different. If Disney or another major studio follows suit, there may no undoing the harm. You have to imagine this will be the final straw that pushes some theaters to shuttering permanently. If Disney is next, the impact would be exponentially greater.
On the other hand, there’s really no reason for Disney to follow suit just yet. While Warner Bros. slate is major, Disney has unrivaled properties like Marvel and Star Wars. They are unlikely to take any chances with a release like Black Widow and will likely want more data before acting too fast. What if HBO Max’s subscriber base doesn’t grow all that much and by 2022, Warner Bros. falls back in line? That is at least possible, even if the most likely outcome is a continued mushy middle.
One thing is for sure—if this trend continues, everything about the movie industry will change with it. The way films are funded, the way talent is paid, the way the remaining theaters price the experience. We would be looking at a radically different future, but one we should all be prepared for given how long the writing has been on the wall.
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