Warner Brothers Cuts the Cord with Movie Theaters

Film industry giant foregoes theater releases favoring streaming in light of pandemic

Since the start of the coronavirus pandemic, the film industry’s inability to rely on traditional theater releases has forced numerous entertainment institutions to restructure their release processes.

Warner Bros. Pictures marked the end of a tumultuous 2020 with a massive release of all their scheduled 2021 films on the popular streaming platform, HBO Max.

Movie theaters are quickly dying off as studios release more and more on streaming platform services rather than in theaters. The controversy around this topic continues to grow as many industry players have been quick to critique this transition of the movie industry.

“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,” director Christopher Nolan director Christopher Nolan stated in an interview with The Hollywood Reporter.

Nolan teamed up with Warner Bros. for his latest blockbuster, “Tenet,” which was released in theaters on Aug. 12, 2020 and was supposed to serve as a financial catalyst for the movie industry amid the troubles of the pandemic.

Unfortunately, the movie’s release turned out to be the exact opposite.

The disappointing, $57.9 million domestic box-office earnings for “Tenet” spooked production companies like Warner Bros. away from the idea of releasing movies exclusively to theatres. 

To mitigate these concerns, Warner Bros. has shifted their focus to the long-term success of HBO Max, rather than relying on revenue from their movies screened in theaters. Now Warner Bros. will have the theatrical release dates coincide with their HBO Max dates.

While this move appears fiscally sound, it has sparked outrage among film lovers everywhere.

“Streaming services are a positive and powerful addition to the movie and TV ecosystems,” wrote Denis Villeneuve, director of the forthcoming big-budgeted “Dune” remake. “But I want the audience to understand that streaming alone can’t sustain the film industry as we knew it before COVID.”

“It is difficult to overstate the importance of these issues, including the impact on the theatrical experience and the potential loss of income due to reduced revenue streams to DGA members,” wrote Russell Hollander, the executive director for the Directors Guild of America, to Ann Sarnoff, the chair and CEO of WarnerMedia Studio. “We intend to take appropriate actions to protect the rights and interests of our members and request an immediate meeting to discuss this matter.”

These sentiments demonstrate the dangerous direction the movie industry is spiraling toward. Moviegoers used to be able to experience the cinematic ambiance of the theater while chowing down on a large bucket of over-buttered popcorn and gulping a giant Slurpee. 

HBO Max offers a wide selection of movies and TV for a price of $14.99/month, while the average moviegoer pays up to $16.50 on a single ticket at their local theater. Now however, with the combination of lower prices and convenience of in-home streaming, there’s less incentive for people to watch movies at the theater.  Not only are the theaters missing out huge on ticket sales, but concessions also account for about 40% of a movie theater’s profit, representative of another way theaters are taking a significant hit during the pandemic.

In addition to Warner Bros.’ motive for switching platforms, it seems that AT&T is also a culprit for this outcome. As the parent company of WarnerMedia, which owns Warner Bros., AT&T would benefit from this promotion of HBO Max as well through increased subscriptions. In short, when people buy an HBO subscription through their cable company, AT&T has to give them a percentage. But, with the direct subscription of HBO Max, AT&T can remove that factor from its equation. 

Regardless of the intentions behind the choice, options are limited given the inflexibility of the situation.

“I think they’re looking at a scenario in which they either lose some money, or another scenario in which they lose a fuck-ton of money. That’s the decision. ” director Steven Soderbergh said in an interview with Vanity Fair. “You’ve got to look at the next 12 to 18 months if you’re a studio. The fact is, there is not a theatrical-exhibition business that’s worth investing in [unless it’s] operating at 100% capacity. Any other version of it, you’re throwing your money away.”

With this in mind, it’s difficult to say what the future of the movie industry will look like. This choice made by Warner Bros. has been criticized for being an onslaught on the movie industry, but in reality, could instead be the beginning of a new entertainment industry.