Warner Brothers’ HBOMax Announcement Is a Brilliant Game Changer (OPINION)

The movie industry was rocked last week with an announcement from Warner Brothers that the entirety of their 2021 film slate would be released simultaneously on HBOMax and in theaters. It was a stunning blow in the now amplified streaming wars, which seems to have set a new target into its line of sight: the theater industry.

Since the announcement, there’s been much ballyhooing about the death of the theatrical experience. Everyone from film critics to film makers—including Christopher Nolan, who is far from blameless for this decision—has lambasted the decision as a disgrace to cinema and an afront to the creatives who work hard to bring us quality entertainment.

Nolan, who earlier this year insisted that his latest film, Tenet, be released in theaters in the midst of a global pandemic, a time when no one particularly wants to be in enclosed spaces with hundreds of strangers, engaged in something of a scorched earth campaign against the film studio, decrying the move in no uncertain terms. Speaking with The Hollywood Reporter, Nolan said, “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.”

From a business perspective, I suppose he does have a point. After all, many of the people who work so hard to bring us the movies that enhance our lives earn substantial portions of their income via profit sharing initiatives that give them cuts of the theatrical take. Many of these creatives stand to lose potentially millions of dollars as potential box office earnings are replaced with streams. I get it. I’d be mad too if I was losing that much money.

In a vacuum, the argument and outrage makes sense. However, we do not live in a vacuum. Nothing in this world exists in a vacuum. Ours is a world of interconnected webs that forms a complex economic ecosystem where events on one side of the world can have an impact on the bottom line of a company thousands of miles away. This is perhaps truer than it has ever been given the interconnectivity upon which we all rely. And right now all the webs that form the reality of our world are infected with a virus.

As I write this, almost 300,000 Americans have died from COVID-19. Millions more have lost jobs, lost homes, lost access to safety nets, and lost loved ones. Whether directly or indirectly, we are all of us suffering from the horrific effects of a global pandemic and our lives have all been uprooted. A darkness has spread over the face of our world; in that darkness we can all use whatever light we can find.

Movies, undoubtedly, can be a source of said light. There is an unbridled joy a movie lover experiences at watching a new film; it’s a joy I, blessedly, get to experience at least once a week. Even watching a bad movie can have its plus side. There’s nothing quite like talking with your friends about how and why a particular film fell so flat.

Going into 2021, however, uncertainty still swirls. Even with the prospect of multiple vaccines on the horizon (Great Britain, in fact, gave its first vaccine just today), the prospect of a return to normalcy is still vague and distant. As it stands, the US will only have enough of the vaccine to inoculate 50 million people—roughly one-seventh of the total population. Even as more vaccines are rolled out, it’s going to take time to ensure that we’re all vaccinated against this deadly and horrific virus. Hope grows by the day, but normalcy is still a long ways off.

And in the time between now and normalcy, how many more of us will die? Lose jobs? Lose houses? A moment of disruption can cause years of repair, and we’re unlikely to stop feeling the effects of COVID-19 for a while yet to come. Great though it might be to find a silver bullet that allows us to return to the way things used to be in an instant, that ain’t happening. The economic impact of all of the death and job loss will not be repaired any time soon. The reality is that we’re all in this for the long haul.

Which is something that Warner Brothers no doubt understands. Given the catastrophic failure of Tenet, whose released was forced by Nolan, it’s understandable that they might be reticent to hit the box office running in 2021. Tenet earned just $359 million at the global box office; factoring in its production budget, its ad budget, and all the back end deals that move and shake the movie industry, it needed to earn $800 million just to break even, according to IndieWire, making Tenet a devastating mark of red on the WB books.

Meanwhile, HBOMax stands to make a killing. That’s the equation facing not just WB but all movie studios going forward. A loss at the box office or recoupment via streaming and on demand. As I’ve mentioned in previous columns, the economics do make sense. As a refresher, understand that (roughly speaking) the split between theaters and studios for box office take is roughly 50/50. That $800 million mentioned above? WB would only get half of that, and most of that would go to earning back its production and ad budgets.

Compare this to Mulan. Disney made their own waves this year with their decision to release their $200 million live-action remake directly to Disney+ for a cost of $29.99. Estimates put Disney’s take at about $261 million, which doesn’t factor in money earned from new subscribers. That’s $261 million that Disney gets to keep for itself. Despite earning less money than Tenet, in terms of profit and loss, Mulan was the home run Tenet hoped to be.

Meanwhile, coastal critics decry WB’s move as a death knell for theaters. But you know what? Good. The rising cost of movie tickets increasingly put a night at the movies out of reach for many families—many more now, thanks to job loss and salary cuts—and the value has declined significantly. A night at the movies for a family of four would costs roughly $60 before you factor in concessions. The reality that so few in Hollywood or the National Association of Theater Owners are willing to face is that the much exalted theatrical experience is now a luxury item, and it’s one that comes with a level of service and hassle one might find at the DMV.

This writing has been on the wall for years now. Every year brings disastrous news about the state of theaters as more and more people are choosing to forego the theater for the comforts of home. This might have been unfeasible even a decade ago, but with the increasingly lower costs for high definition televisions and surround sound systems, the truth is that theaters have less and less to offer most consumers.

COVID-19 might have sped this process up, but theaters were going to have to deal with this sooner or later, and WB’s move puts the conversation right at the forefront. Ironically, NATO might have been able to avoid this had they been willing to renegotiate the 90-day window—the deal between theaters and studios that gives theaters exclusive access to films for 90 days from their release. Instead, they dug in. Those tactics might have worked in the past, but the rise of streaming platforms has causes studios to, rightly, reexamine their options.

And given that HBOMax is a Warner Brothers product, the option looks pretty good. Not only does it set them up to at least make some money in 2021, it also opens up access to film that many people might not have had before. Someone who might have balked at the notion to spend upwards of $100 to take their family to see Wonder Woman 1984 can easily make the choice to spend $15 a month for access to some of the potential biggest films of next year.

And given the darkness that continues to cloud our immediate future, it’s a move I can only applaud. Maybe some kid in small town Texas will see Dune from his living room and fall in love with filmmaking. Perhaps a young girl will see Wonder Woman kicking ass and get into comics as a result. This is a decision that can only increase access to the world of film and cinema and while there’s no doubt that WB’s move is risky, given the state of the industry today, it’s a risk that carries with it the potential for a lot of reward.

So forgive me if I’m a bit less than understanding of Nolan’s plight. A millionaire, he remains a bit more insulated from the devastating socioeconomic effects caused by the COVID-19 pandemic than the rest of us, and he’s far more able to withstand the hardships facing so many of us these days. And also please do forgive my reticence to care about what the billionaire owners who comprise NATO think about their potential loss in market share. If the theater industry falls, I’ll be a little sad, no doubt, but at the end of the day that cause of death can only be listed as hubris.

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