Warner Brothers have upset a lot of people!

12th December 2020

The world turned upside down this week, as Warner Bros. – one of the most prestigious movie studios, member of the original ‘Big Five’ film producers that gave us motion pictures to adore ever since its establishment in the 1923 – had decided to distribute the entirety of their 2021 slate simultaneously at the cinemas as well as its own streaming platform, HBO Max.

This comes just a couple weeks after WB executives confirmed that Patty Jenkins’s and Gal Gadot’s ‘Wonder Woman 1984’ will hit the cinemas this Christmas, but will also have a same-day digital launch. As you can imagine, the entertainment world spun into turmoil and there are a lot of varying reactions to it.

First of, let’s start with, ‘Exactly “what” is coming out under the Warner label in 2021?’.

Well, that’s a big list. ‘The Suicide Squad’ – a reboot of ‘Suicide Squad (2016) – with Margot Robbie, which marks James Gunn’s crossover from Marvel Cinematic Universe to the DCEU, is one of the high-profile tentpoles that we will get to see on the HBO Max. Then, there is the long-awaited ‘Matrix 4’ from the Wachowski sisters, bringing back Keanu Reeves and Carrie-Anne Moss. Warner’s and Legendary Pictures epic, ‘Dune’, made by the great Dennis Villenueve (Sicario, Arrival, Blade Runner 2049), with an all-time impressive cast spearheaded by Timothy Chalamet is the next one of the true cinematic experiences that will get a dual-release. Highly anticipated duel of the monsters, ‘Godzilla vs Kong’ and then LeBron James-led sequel to Michael Jordan’s ‘90s favorite, ‘Space Jam’, with MonStars (pun!) squaring off on the basketball court with the Looney Tunes one more time. Warner is also bringing ‘The Sopranos’ prequel – ‘Many Saints of Newark’ – to its streaming platform and the cinemas, with James Gandolfini’s son, Michael, portraying Tony Soprano, alongside Vera Farmiga. Farmiga – who has Godzilla connection, too – is actually going to appear in yet another one of the Warner double-releases, ‘The Conjuring: Devil Made Me Do It’ from James Wan’s and Leigh Wannell’s horrifying Conjuring-verse. Speaking of James Wan – his latest horror, ‘Malignant’, will also come to the HBO Max and cinemas, and this cooperation between him and Warner continues beyond ‘Conjuring’ series and ‘Aquaman’. Lin-Manuel Miranda’s musical, ‘Washington Heights’, is on that list too – and this one was actually written before (!) Hamilton!

This is followed by Lakeith Stanfield and Daniel Kaluuya’s Black Panther (movement, unrelated to the MCU superhero) biopic, ‘Judas and the Black Messiah’, which is aimed for next year’s awards season. Mortal Kombat’s reboot simply titled ‘Mortal Kombat’ – for once, attempting to stay true to its original – will also be made optional to watch on the big screen or in the comforts of your own homes. One of the most acclaimed (won 7 Oscars back when cartoons were eligible, which is an all-time record shared with Disney’s ‘Silly Symphonies’) animated series of all time, ‘Tom and Jerry’, are making their silver screen comeback this year, with Chloe Grace Moretz appearing alongside the famous duo – and this film will also stream while it’s playing at the cinemas.

As far as more of the Oscar-hopefuls with A-Listers, we have ‘King Richard’ with Will Smith – which is the biographical feature about Serena and Venus’s father, Richard Williams – and Denzel Washington’s thriller ‘Little Things’, in which he forms an investigative team with Rami Malek. Another high-profile thriller, based on the bestseller ‘Those Who Wish Me Dead’ with Finn Little in the leading role, is a film about a boy who witnesses a murder and has to flee from the killers through the forest set ablaze by the wildfire. We also have Hugh Jackman’s ‘Reminiscence’, aimed at the 2022 Academy Awards. Clint Eastwood’s vehicle, which he will also direct – ‘Cry Macho’ – is yet another big film he made with the studio he mostly works with and that appears on the list of big double-releases. As you can see, that’s a lot of movies, and while for many of them, it is going to work out, there are people out there who seem to be very unhappy.

First of all, Warner’s favorite collaborator – Christopher Nolan – who has worked with the studio exclusively every since his first wide release of ‘Insomnia’ all the way to this year’s ‘Tenet’ – has spoken out against this decision.

The director, whose last 9 movies were financed by Warner, was the first to make a statement condemning what he perceived as ‘the greatest movie studio’ with ‘the worst streaming service’,

“Some of our industry’s biggest filmmakers and most important movie stars went to bed the night before thinking they were working for the greatest movie studio and woke up to find out they were working for the worst streaming service,” filmmaker Christopher Nolan, whose relationship with Warners dates back to Insomnia in 2002, said in a statement to The Hollywood Reporter.

“Warner Bros. had an incredible machine for getting a filmmaker’s work out everywhere, both in theaters and in the home, and they are dismantling it as we speak. They don’t even understand what they’re losing. Their decision makes no economic sense, and even the most casual Wall Street investor can see the difference between disruption and dysfunction.”

Nolan’s criticism may come as a little surprising, but definitely not shocking – the director has been a very influential figure in the movement attempting to save the cinemas and his words may be, to some extent, quite fair and shared by many filmmakers and even audiences alike. It does, however, seem slightly odd that he’d criticize his cash cow – Warner’s been known as the only studio to front blockbusters made as an IP, unrelated to any existing bodies of work and risking original, complex movies made for 150 million dollars or more. In fact, it’s shows how much Nolan cares about cinemas that he would cross the studio that was bending backwards in order for him to release ‘Tenet’ this summer – a move that cost them around 100 million dollars. Tenet made 357 million USD at the worldwide box-office, which is shy of the necessary 450 million needed to ‘break even’. The movie that cost 205 millions of dollars had a 200-mil-worth of marketing behind its belt and was most likely a major catalyst for Warner’s decision to stream its big budget films next year. Tenet’s case study proves how difficult and unpredictable the film market is, because for a flagship film of the 2020, Nolan’s espionage thriller highly underperformed. Naturally, more criticism comes from the cinemas – in particular, AMC chain (on the brink of bankruptcy) which publicly came out against Warner’s new hybrid model. AMC Theatres had struggled to keep their cinemas open and their business afloat, hence they see Warner’s decision as a stab in the back.

Adam Aaron, the CEO and president of the AMC Entertainment, made a statement to Gizmondo that included the following:

“Clearly, Warner Media intends to sacrifice a considerable portion of the profitability of its movie studio division, and that of its production partners and filmmakers, to subsidize its HBO Max start up,” Aron continued. “As for AMC, we will do all in our power to ensure that Warner does not do so at our expense. We will aggressively pursue economic terms that preserve our business.“

As far as the details of the distribution, cinemas seem to be out of the picture – no pun intended – yet, with Bloomberg reporting that Cinemark claimed: “In light of the current operating environment, we are making near-term booking decisions on a film-by-film basis, (…) At this time, Warner Bros. has not provided any details for the hybrid distribution model of their 2021 films.”

It’s not only the cinema chains that are out of the loop. Warner’s long-time co-financiers, a production company ‘Legendary Pictures’ (which stood behind The Dark Knight trilogy, among many others) is now considering a legal action against the studio. With ‘Dune’ and ‘Godzilla vs. Kong’ being one of the two largest films of the year – both made as an effort by both WB and Legendary – cost a combined $335 million. What apparently became a tipping point was Warner’s lack of transparency about their intentions and keeping the decision away from many of its shareholders and co-producers. Months ago, Warner Bros. considered selling ‘Godzila vs. Kong’ to Netflix for 250 million USD, but those discussions were blocked by WB’s parent company, Warner Media. Now, Warner opted for steaming the film on its own, mostly unbeknownst to its partners. Legendary Pictures’ disappointment at ‘Dune’s’ digital release is shared by the film’s director, Dennis Villenueve, who was adamant about his film being an ultimate cinematic experience meant for the big screens.

So now that we looked at the negatives, we should examine reasons behind Warner’s decisions to move 17 of its films to the untested, as of yet, hybrid model and releasing them on HBO Max. 

First one is the case study of ‘Tenet’, mentioned before. It became Nolan’s lowest-grossing release since ‘The Prestige’, which carried a much smaller price tag in 2006 and was of much lower and darker profile, as well as a slower pace at which we see the events unfolding on the big screen. Since then, none of his movies had gone on to make less than 500 million at the worldwide box office. What’s more worrying, however, is that at 205 million (not including the marketing budget), Tenet became Nolan’s most expensive release to date. Number two, other high profile releases doing well on VOD and streaming. Earlier in the year, Trolls World Tour became Universal’s biggest digital release of all time, beating Jurassic World 10x in its first weekend alone. That move was also highly criticized by the cinema chains (mainly, AMC) and it paid off for the studio, which eventually made amends with the cinemas despite completely skipping them when putting Trolls sequel out.

Then, Disney released its Mulan on Disney+, but not before hitting its targeted market, China, where the movie did not do as well as they expected – partially due to controversies surrounding its leading lady, Liu Yifei, and her stance on the Hong Kong vs China issue, which led to negative reception in many Asian markets. The film did much better on Disney’s streaming platform, however, and although the company did not release its streaming numbers, ‘Mulan’ became yet another nail in cinema’s coffin amid the coronavirus scare.Three: Unlike in these two mainstream cases, Warner Brothers did not omit the middle men and, in fact, came up with ‘a compromise’ and a solution that hands the movies over to two different audience groups. Although it puts cinemas at a disadvantage, it still means that Warner handed them a bone in a very difficult market – a market where not just the cinemas, but the movie studios need to survive, hence adapting its tactics to the current demand. Let’s not forget that the problems did not just disappear yet: Deloitte’s study (https://variety.com/2020/digital/news/movie-theaters-covid-consumers-uncomfortable-1234846743/) 

Into the future of theatres noted that only 18% of the Americans had gone back to the cinema since the pandemic started and 71% of consumers are unwilling to go the cinema within the next month (think, Wonder Woman 1984). Only 35% are ‘definitely’ or ‘likely’ to see new movies in the cinemas in 2021, whereas a staggering 44% would prefer to do it at home. So far, around 22% of consumers paid to watch or rent a premium VOD film (with all of that money going to the production company and the studio/streaming platform) and 90% of them would do it agaIn. Cartoon Brew’s survey (https://www.cartoonbrew.com/feature-film/survey-majority-of-americans-dont-want-to-visit-cinema-in-next-six-months-199576.html)

It indicates that as large majority as 72.7% of moviegoers are not ready to come back to the theatres yet – and a total of 6% of people are claiming that they will NEVER go to the cinema again. These are numbers that simply cannot be ignored by Warner Brothers, which is risking losing a lot more when going straight to the theatres. In total, 20% will watch new movies at home and 22% probably at home post-Covid-19, with 23% equally likely to stay at home or go to the movies. Then, there’s 22% that will likely go to the theater and only 13% that are decided on the cinemas. That leaves only 35% really leaning that way, which would make up a worst-case scenario loss of 65% of your audience.

 This is purely a financial decision from what we can see, but what are other options to find a compromise?

Limiting the amount of hybrid releases. Most surveys that look into the future of VOD/streaming vs cinema releases take only the following 6 months into account. Perhaps, Warner’s change of heart that could only lead to a 6-month slate of hybrid releases and further evaluation of the market before the remaining 6 months of the 2021 would appease its critics and the studios? The market might still open up post-vaccinations and the studio would be able to save its face as well as save some at-risk chains from going under. It is probably one of the ways that Warner will explore after the heavy backlash, seeing as it’s unlikely that the studio will stick to its original decision following the split reception of the innovative form of distribution.

One way or another, keep your eyes open, because the future of the film industry – or, at least, the cinemas and streaming as we know them – is going to be decided in the nearest future. In the meantime, you might want to think of an HBO Max subscription. For the rest of you – you will be reliant on Warner’s partners in the UK, Sky, and… well, the cinemas.

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