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2021 HBO Max Release Plan Highlights Theaters’ Reduced Power | Column from the Editor

While watching Netflix’s “Mank,” which documents the rise of the movie theater industry as a major commercial powerhouse in the 1930s, I couldn’t help but think that theaters are reaching the end of their time, as the coronavirus pandemic has singlehandedly destroyed the vast power theaters have had over film companies. The other day, critics Mike Stoklasa and Jay Baumen brought up how Universal’s failed attempt to stream 2011’s “Tower Heist” on Video On Demand for $59.99 three weeks after the film premiered in theaters was promptly shot down by theater chains, and it’s hard to imagine theaters having anywhere close to that amount of power even in a post-COVID-19 world.

Warner Bros.’ plan to stream 17 movies on HBO Max concurrently with playing in theaters seems to only cement that. What was once unthinkable, as a simple boycott by theater companies would normally cost Warner millions — if not billions — is now a practical path Warner needs to follow to survive, as the pandemic has made theaters obsolete, and it will take some time to build up consumer confidence in them even after a hefty vaccination effort. Stunts like what AMC pulled with their 15-cent movie prices certainly didn’t help, as was the just-OK box office of “Tenet” (though to be honest, it could have done far worse than making $350 million off of a $200 million budget). For me, what made me avoid theaters at all cost was their refusal to ban concession sales, as there is just no good way to enjoy those in a sealed theater without spreading the virus as they require you to take your mask off.

Still, as vaccines are around the corner and the end of the pandemic is in site, we’re entering a much different entertainment landscape, with many theaters either already closed, in hibernation or on life support. They’ve also had to endure a year in which people realized that outside of optimally-viewing visual-heavy blockbuster films or enjoying things like the next Christopher Nolan film as the director intended, they don’t really need theaters. Going to the theater is just a cost we all came to accept through decades of cultural indoctrination that was always going to be replaced by the ability to view any movie instantly on any device with a stable internet connection.

It’s worth noting that Warner’s decision is also fueled by the fact that it’s owned by AT&T (AT&T customers get HBO Max for free), who are also looking at a much broader profit spreadsheet. There will be some predictable dips in the box office of Warner movies next year, but if it creates new AT&T customers and/or paying HBO Max subscribers, it would be worth it. The New York Times notes that not splitting streaming profits with theater chains will greatly help them out:

“WarnerMedia’s average box office revenue tops $1.8 billion annually, according to estimates by the research firm MoffettNathanson, an amount that the studio must split with theater chains. That means AT&T will have to make up about $900 million in 2021 film revenue.”

The article also notes that AT&T would only need to add five million more HBO Max customers next year — or 60 million people paying for a single month — to make up for box office losses.

Warner’s move creates instant value in HBO Max, especially for families who would normally have to spend something like $30-$60 per new release in the theaters, depending on the size of their family. I wasn’t planning on getting HBO Max, but am now heavily considering it, as it would normally cost me and my girlfriend a minimum of $20 to see a new film in theaters (though we’d usually spend double that when including concessions), and we’d only need to see one theater-concurrent release every two months to make the service worth it for us.

It also highlights that the theater-release model was antiquated and only remained prominent through our own cultural habits. For all this critique, I do miss the theatergoing experience and I hope most theaters rebound, though I fear that tomorrow’s theaters will only feature big event movies like “The Avengers”, and we might see the small regional and local theater start to disappear.

Still, I remain optimistic.

1 comment

  1. That’s a great point to finish; the model was antiquated, although it would have stuck around for longer if it wasn’t for the pesky pandemic. Reading Chris Nolan’s despair, his reaction is understandable, but there’s no chance of packing in audiences for the next six months, and IP has got to survive somehow. And we’re starved of the blockbusters that keep people looking for the next big film…

    Like

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