What is the arrangement, exactly?
Each of the 17 films will be playable on HBO Max for 31 days (at no extra cost to subscribers), while simultaneously playing in theaters. They will then become exclusive to theaters until they reach the traditional home entertainment frame, after which they will be available across VOD platforms like Amazon and Itunes. It isn’t clear when (or whether) they will return to HBO Max.
Which animated films are affected?
Warner Bros.’s slate doesn’t contain any fully animated features, but it does have two films we’ve featured on Cartoon Brew: Tom & Jerry and Space Jam: A New Legacy are hybrid features based on classic animation properties.
Why has Warnermedia done this?
Clearly, the company has little faith in the U.S. exhibition sector’s swift recovery. Warner Bros. knows better than anyone what it means to release a tentpole in the current climate: it tried this with Christopher Nolan’s Tenet, which did lackluster business domestically ($57 million so far). Coronavirus cases are on the rise and cinemas are shutting down again: in all, around 60% of U.S. exhibition is closed.
The move is also a boon to HBO Max, which was launched into a crowded streaming space in May, and has had a relatively slow start. As of late October, HBO Max and its sister network HBO had 38 million U.S. customers between them.
How have theaters reacted?
Once again, they have been caught off-guard. Adam Aron, CEO and president of the beleaguered AMC Entertainment, lamented the move, arguing that “with vaccines right around the corner the theatre business is expected to recover.” He added, “We will aggressively pursue economic terms that preserve our business.”
Meanwhile, a representative of Cinemark said, “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.”
Will this continue into 2022?
The announcement only covers 2021 releases; Warner Bros. chair and CEO Ann Sarnoff referred to the new approach as a “unique one-year plan.” When Vox asked Warnermedia CEO Jason Kilar about the prospect of extending this model into 2022, he was equivocal, replying, “We should obviously check in this time next year.” (Note: Warner Bros.’s animated feature DC Super Pets is currently slated for May 22, 2022.)
Will other studios follow suit?
The injection of 17 major films into HBO Max’s slate puts pressure on other media conglomerates with streaming services. Eyes are now on rivals like Disney and Paramount: will they redirect more tentpoles to their own streaming services in order to compete? (Disney’s recent restructuring sets it up to do just this.)
What about overseas?
HBO Max is currently only available in the U.S. Moreover, many international markets have more fully reopened their exhibition sector. This is reflected in Warner Bros.’s thinking. As Toby Emmerich, chairman of Warner Bros. Pictures Group, told Variety: “Outside the U.S., in places like China, South Korea, Japan, parts of Western Europe, our films will only be available in theaters. We think those markets can perform better.” However, it should be noted that HBO Max is scheduled to launch next year in Latin America and some parts of Europe, opening the door to this strategy in other regions as well.