The windows are now smashed, and that’s a good thing, broken glass notwithstanding.
At least that’s the case at Warner Bros. This week, the entertainment giant finally shattered Hollywood’s way of doing business, perhaps for all time. The company said its entire slate of movies for 2021 — 17 in all — would drop onto its HBO Max streaming service on the same day they appear in theaters, abandoning the old system of “windowing” its cinematic releases.
Even now, making theater owners think they still mattered was a necessary bone that WarnerMedia’s chief, Jason Kilar, had to throw to those who had not yet grasped the depth of the digital revolution, which has only accelerated during the pandemic.
But WarnerMedia has finally embraced the inevitable future, even if they’re not saying it explicitly. The rest of the entertainment industry would do well to pay mind.
Or at least keep up with Mr. Kilar, who is doing this to light a fire under the underperforming HBO Max. The streaming service has been too little, too confusing and too late, which is why subscribers have not been racing to sign up and pay $15 a month for it. HBO Max is limp with only 8.6 million activations, even though the traditional HBO cable service has 38 million subscribers.
Thus, along with new originals like a “Gossip Girl” reboot, WarnerMedia needs to lard up HBO Max with its upcoming slate of possible blockbusters, like “Dune,” “The Matrix 4” and Lin-Manuel Miranda’s “In the Heights.” The studio had already sent out a clear signal last month that the ground was shifting when it said its “Wonder Woman 1984” would debut on both HBO Max and in theaters on Christmas Day.
In Olden Times — last week — streaming services would have to wait 90 days while the movies played in theaters exclusively, a retrograde policy given how much the audience has changed in the last decade and, especially, in the last six months.
Mr. Kilar is calculating correctly that even the impending rollout of Covid-19 vaccines will not be enough to boost movie-theatergoing until at least next fall.
But if I know him well — and I have known him for many years, since before he was pioneering the Hulu service, where he was forever hamstrung by old rules of the entertainment industry — he is also assuming that Warner’s future lies primarily in making its streaming service the center of the action. And that means making the studio’s reliance on big theatrical releases a thing of the past.
This is not unlike the huge shift the software and hardware industries underwent long ago, moving on from splashy big analog debuts. Remember the Windows 95 extravaganza and when things actually were launched at the Consumer Electronics Show? Me neither. Now, new tech products come out every which way and in the manner that befits whatever they need to thrive.
Much of what has befallen the movie-theater business is about secular change related to technology. But the industry has done itself no favors by offering terrible customer service, ever-higher prices and precious little in the way of innovation, even as home theater experiences have drastically improved.
While several of Mr. Kilar’s underlings tried not to answer the question of whether the Warner 2021 movie-slate move was temporary or permanent — one called it a “unique, one-year plan,” and the always shifty term “hybrid model” was tossed around — it’s just a feint to protect a lie that Hollywood has told itself for far too long. Which is that it can no longer avoid the wrenching changes to its business fueled by the rise of digital technologies and changing consumer practices. These have been clear to anyone who has watched the relentless and impressive march of Netflix.
HBO Max, which debuted in May, is hardly a competitor to the persistently innovative Netflix, which has 200 million monthly subscribers on its global service, with 73 million in the United States. And throughout the pandemic, Netflix — because it has been perfecting its original-content machine for years — has been churning out the hits, including “Tiger King,” “The Queen’s Gambit” and an even spicier fourth season of “The Crown.” Netflix’s level of excellence has demanded that others follow it.
Warner is not the only one. There have been increasingly aggressive efforts to put streaming in the lead by the Walt Disney Company, which took the well-timed plunge with its Disney+ service earlier this year. Disney just reported an impressive 73.7 million subscriber tally, helped by its creative “Mandalorian” franchise. And it is making its live-action remake of “Mulan” available to subscribers after having experimented by charging $30 extra to watch it on the service.
By making these dramatic shifts, Disney and Warner may be giving up hundreds of millions in box office revenue from theaters, of course, but it’s pain that is necessary, even if it means complaints from those owners.
And how, with the howling. Stocks of theater chains plummeted even further after the Warner news, which was apparently not signaled ahead of time to the chains, and after Warner and the theaters had tried to put a happy face on the initial “Wonder Woman 1984” news.
“Clearly, WarnerMedia 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,” AMC Entertainment’s Adam Aron said in an email to The New York Times. “As for AMC, we will do all in our power to ensure that Warner does not do so at our expense. We have already commenced an immediate and urgent dialogue with the leadership of Warner on this subject.”
Talk all you want, Mr. Aron, because no one is actually listening and your company’s stock is sinking, even if some people are profusely apologizing and sending you the $795 Christmas morning breakfast box from ROE Caviar. Eat up, because there’s a lot less where that came from. The theater business a very shaky prospect in the long term.
Or just read between the lines of what Mr. Kilar told The Times: “I have a lot of confidence in the theatrical model, and I have a lot of confidence in the subscription model. In many ways, you could see a future where budgets and ambitions continue to grow because that which you make more convenient tends to be used more often.”
Let me decode that for those who don’t yet get the narrative: You have to break a lot of windows to let in the air blowing in from the future.
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