WarnerMedia/HBO Max Plan, Will it Kill Theaters & Do We Even Care?

Wayde Robson

Wayde Robson

Audioholics Anchorman
By now we've heard about Warner Bros. plan for same day & date release of its entire 2021 line-up of to its streaming service, HBO Max and movie theaters. It's very likely the movie theater's inclusion is just a formality, Warner knows that the big chains are likely not to bother screening films going directly to streaming unless they get special terms.

I think the Warner plan is focused exclusively on boosting HBO Max, which is not exactly performing to make "Max" the must have streaming service. But Warner execs may have underestimated the fallout, as Warner Bros. didn't even include its own studio partners, creators of some of its big budget films when it hatched this plan. In the end, between COVID-19 and the studio's desire to release films directly to viewers, hard times for theaters have been in the works for a long time.

So, what does the film industry look like without big theater chains exclusively launching movies within a theatrical window? Do splashy, big budget "event" movies even continue to get made? Or does film production give way to the TV Series format when 99% of all viewing takes place online and at home? Last question... does a collapse of movie theaters create greater demand for home theater equipment?

I share some thoughts on the decline of movie theaters in this article.

Warner/HBO Max Takes Shot at Theaters, Hits Foot
HBO-Max-WB.jpg
 
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Hobbit

Full Audioholic
Thanks for the article. No matter who you're with with streaming, it does seem since covid there has been a lack of new content. Particularly with movies. I'm seeing a lot more older titles appearing on my search lists.

As far as theaters go, I've never been a person who went to a lot of movies. I Usually went to only see movies that really work well on the big screen or just to be sociable with friends. Even then, my preference are the theater/brewhouses:) But I thought I was the odd man out in this respect. Perhaps not as much as I thought anymore.
 
lovinthehd

lovinthehd

Audioholic Jedi
Certainly a lot of movie/tv projects have been interrupted as well as the revenue stream by covid. Going to the movies isn't something I've been doing for many years, too far away and the setup of many theaters is simply disappointing, too, let alone the expense involved (just for the cost of gas alone I can buy the bluray and watch as many times as I want, too....and I do watch good movies more than once). OTOH I finally figured out how to get my "free" HBOMax from Amazon (had to change browser to see all the options).
 
J

JengaHit

Audioholic
Since I retired from the movie business (marketing, distribution, and production) I've watched the transformation with a schizophrenic mood--optimism and nostalgia. For producers and creatives two consequential issues stem from the decline of theatrical, which were here before COVID:
- FINANCING. Financing avenues for independent producers are changing and becoming constricted.
A) Independent producers' financing models are under pressure. Since the 90s they (including my old boss, a veteran producer) have financed projects by pre-selling int'l licensing rights to foreign theatrical distributors and using those contracts as collateral to bundle financing packages (bank loans, tax credits, equity financing, etc.) But streaming has affected theatrical everywhere, including these foreign distributors; they are under pressure as much as North American giants like Warner. So there is a domino effect from streaming to foreign theatrical to indie-film financing. Foreign distributors might be more risk averse in this new world and more selective about pre-buying licensing rights. Indie producers will have to scramble for financing options even more, which will probably mean fewer indie-movie projects will ever move to production.
B) On the other hand, streamers like NF, Amazon, and Hulu are financing a lot of projects and giving smaller producers and directors a distribution channel they didn't have a decade ago. But the terms of these financing deals are not the best unless you are a really big, established name. So it's a road open with caveats.
- MARKETING IMPACT. Streaming release for original movies just hasn't had the same marketing impact as theatrical, which is partly why Nolan is so bent up. I honestly can't think of a single streaming-only-release movie that's had the impact of any of Nolan's theatrical movies. There's still nothing like wide-release theatrical to create pop-culture impact, at least in film. (Streaming "TV" series have been more successful at this branding, witness "Stranger Things" or "The Crown"; maybe a long-long narrative form in 10-13 episodes and multiple seasons creates more of a continual water-cooler event for viewers). Crazy Rich Asians illustrates why theatrical is still important to movie producers and creatives. The principal stakeholders, primarily int'l best-selling novelist Kevin Kwan (whose novel the movie is based on) and director John Chu (Now You See Me 2, GI Joe: Retaliation), turned down a huge upfront payday from NF (complete with creative freedom) for a straight-distribution theatrical deal from Warner that was far less lucrative upfront. (Warner didn't front any production costs, but only covered recoupable marketing and distribution costs--low risk for the studio.) Kwan said the big NF payday was retire-to-an-island-and-never-work-another-day-in-his-life. But he and director John Chu, much to the dismay of other stakeholders and agents, went for the Warner deal because they wanted their film to have a pop-cultural impact so big it would change movie economics around Asian casting. They thought only wide-release theatrical could do this, and didn't see NF having that kind of marketing effect. Their gamble paid off. Crazy Rich Asians grossed $238.5M worldwide on a $30M production budget. Quite profitable (even taking into account typical marketing and distribution costs of 30-40%). And it's safe to say this BO success will have more impact on the studio C-Suite in supporting mainstream "Westernized" Asian-cast movies--exactly what Kwan and Chu wanted. Of course, this is more of an issue for blockbuster, tent-pole, or mainstream-commercial movies than indies. But regardless, when theaters are back to normal I still think there will be a role for the theatrical survivors, if a smaller role. On the other hand, creatives like Nolan and Spielberg should use their clout to pressure streamers into being more creative about marketing streaming releases. If NF can turn Stranger Things or The Crown into pop-culture water-cooler fare, why not streaming movies?
 
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Movie2099

Audioholic Chief
By now we've heard about Warner Bros. plan for same day & date release of its entire 2021 line-up of to its streaming service, HBO Max and movie theaters. It's very likely the movie theater's inclusion is just a formality, Warner knows that the big chains are likely not to bother screening films going directly to streaming unless they get special terms.

I think the Warner plan is focused exclusively on boosting HBO Max, which is not exactly performing to make "Max" the must have streaming service. But Warner execs may have underestimated the fallout, as Warner Bros. didn't even include its own studio partners, creators of some of its big budget films when it hatched this plan. In the end, between COVID-19 and the studio's desire to release films directly to viewers, hard times for theaters have been in the works for a long time.

So, what does the film industry look like without big theater chains exclusively launching movies within a theatrical window? Do splashy, big budget "event" movies even continue to get made? Or does film production give way to the TV Series format when 99% of all viewing takes place online and at home? Last question... does a collapse of movie theaters create greater demand for home theater equipment?

I share some thoughts on the decline of movie theaters in this article.

Warner/HBO Max Takes Shot at Theaters, Hits Foot
View attachment 42650
I think theaters will bounce back once Covid calms down. WB putting their 2021 lineup on HBOMax is awesome and I think a lot of people will sign up and watch. Theaters have been slowly losing people for a long time. I myself, who used to hit up movies almost weekly growing up and then at least once or twice a month in my twenties. Now in my thirties my wife and I might get to 6 movies and entire year. I still love theaters and love that some theater chains are adding and upgrading to improve the overall experience, but one thing that has really gotten to me are the rude people. I can't say that I run into it a lot, but it's those times that we have those rude people that refuse to keep their phones put away, or talk, or always getting up leaving and coming back. Or heck the noisy children. All of those things just put a damper on the movie watching and really digs hard when you drop $50 or more depending on where you live. I'd rather build my own theater and create the experience at home.

I think streaming has come a long way and will only get better, but I still prefer physical media. Physical media will always dominate until the streaming services finally catch up. But I don't see that happening for quite some time. I think that most of these directors and actors need to take a chill pill for a year while we're all going through this. They are all still getting paid their millions and still able to live their life of luxury. My biggest issues with their complaints is that, If I was an actor or director, wouldn't you want as many people to see your movie as possible? No matter how it gets done I would want my film to be seen by the masses. Well, in our current situation, that can happen. With the movies being put on both streaming and in theaters, your movie will now be seen by more people than it just heading to theaters. Personally, just looking at WB's 2021 lineup, I would probably only see a few of their movies in theaters and forget the rest. But now it's hitting streaming and I can view at home I'll be more inclined to check out the rest of their lineup.
 
AcuDefTechGuy

AcuDefTechGuy

Audioholic Jedi
It think the idea of simultaneously releasing stream + theatrical is awesome.

There may be a shift of budget reduction for movies, so we probably won't see $200 million budgets per movie. But that's fine for most people. I think shooting movies with 4K-8K Digital Cameras and keeping everything digital also save studio money.
 
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Movie2099

Audioholic Chief
It think the idea of simultaneously releasing stream + theatrical is awesome.

There may be a shift of budget reduction for movies, so we probably won't see $200 million budgets per movie. But that's fine for most people. I think shooting movies with 4K-8K Digital Cameras and keeping everything digital also save studio money.
I agree. The stream + theatrical run is a great idea.

I still think big budget movies will be around no matter what. This generation has come to expect movies like that. I mean, you really can't do a big budget movie under $100 million anymore. Not with cost of CGI effects. Heck, a Pixar movie avgs $150+ million. I think the Stream/PVOD first approach could be the sweet spot for non-blockbuster movies. The Irishman on Netflix cost over $200 million to make. I think places like Netflix are perfect for directors. Netflix gives those directors freedoms that big studios won't. I think Amazon will start to open their pocket books too for bigger Prime movies. Amazon has invested $500 million into the Lord of the Rings show. That's insane! And we all know Apple will shell out to make content and get movies as well.

I think the movie market it safe. Everybody still is going to get paid no matter how or where it ends up. Netflix was almost willing to shell out $600 million for the next James Bond movie. After budget and marketing, that would roughly give MGM about $300 million in profit. Then MGM could release the movie in theaters once all theaters open, earn more and then PVOD and physical release they'd earn millions there. I mean, all these different avenues are gold mines for these big time movies.
 
AcuDefTechGuy

AcuDefTechGuy

Audioholic Jedi
I agree. The stream + theatrical run is a great idea.

I still think big budget movies will be around no matter what. This generation has come to expect movies like that. I mean, you really can't do a big budget movie under $100 million anymore. Not with cost of CGI effects. Heck, a Pixar movie avgs $150+ million. I think the Stream/PVOD first approach could be the sweet spot for non-blockbuster movies. The Irishman on Netflix cost over $200 million to make. I think places like Netflix are perfect for directors. Netflix gives those directors freedoms that big studios won't. I think Amazon will start to open their pocket books too for bigger Prime movies. Amazon has invested $500 million into the Lord of the Rings show. That's insane! And we all know Apple will shell out to make content and get movies as well.

I think the movie market it safe. Everybody still is going to get paid no matter how or where it ends up. Netflix was almost willing to shell out $600 million for the next James Bond movie. After budget and marketing, that would roughly give MGM about $300 million in profit. Then MGM could release the movie in theaters once all theaters open, earn more and then PVOD and physical release they'd earn millions there. I mean, all these different avenues are gold mines for these big time movies.
I almost feel like Dr. Evil in Austin Powers asking for "One M-I-L-L-I-O-N dollars". :D

Yeah, I guess $200 million budget was huge back then and it's still pretty big, but really isn't that huge of a budget anymore. :D

I cannot believe The Irishman cost $200. That's crazy. It's not like Star Wars or Star Trek or Terminator movies.
 
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Movie2099

Audioholic Chief
I almost feel like Dr. Evil in Austin Powers asking for "One M-I-L-L-I-O-N dollars". :D

Yeah, I guess $200 million budget was huge back then and it's still pretty big, but really isn't that huge of a budget anymore. :D

I cannot believe The Irishman cost $200. That's crazy. It's not like Star Wars or Star Trek or Terminator movies.
Most of the cost went to the de-aging effects. Then you look at Avengers movies that cost between $200-$250 million and how much CGI was used in that.

Peter Jackson made the original LOTR movies for $90 million each. Each one turned a billion at the box office. Now that's the kind of ROI I'm looking for!
 
J

jeffca

Junior Audioholic
Home theaters, streaming and COVID turned into the perfect storm to close a lot of movie theaters.

While the movie theater business is not going to totally collapse, I doubt it will come anywhere close to fully recovering.

As to Warner and HBO Max, I think a blind man could see what Warner's motivation is. You nailed that.

As to guys like Christopher Nolan bitching about making a few million dollars less on each film, my heart pumps piss for you. Tens of millions of people unemployed or underemployed... sorry, I really don't care about your career where $2M is poor man's wages for making a film.
 
J

JengaHit

Audioholic
Home theaters, streaming and COVID turned into the perfect storm to close a lot of movie theaters.

While the movie theater business is not going to totally collapse, I doubt it will come anywhere close to fully recovering.

As to Warner and HBO Max, I think a blind man could see what Warner's motivation is. You nailed that.

As to guys like Christopher Nolan bitching about making a few million dollars less on each film, my heart pumps piss for you. Tens of millions of people unemployed or underemployed... sorry, I really don't care about your career where $2M is poor man's wages for making a film.
I think Nolan's complaining is partly rooted in lower returns on his gross points. But as I posted earlier a lot of it is simply that streaming movies haven't had the same marketing or pop-cultural "event" impact. Any director or producer wants the widest possible viewership and release. It's like a writer not wanting his book to be one nobody reads. NF and Amazon are so focused on flooding the market with as much content as possible that it's easy for a movie to get lost in the streaming fray. These NF movies with big stars like Chris Hemsworth, Ryan Reynolds, and Charlize Theron don't have the initial theatrical marketing impact and then fade. That said, I think streaming has been a creative boon for long-form series like Stranger Things, The Crown, The Boys, and The Expanse. The budgets and production values for these series rival movie quality. I'm hoping the streamers can market streaming-release movies as effectively as they've marketed successful streaming series into water-cooler fare (so far they haven't). That could sway a lot of directors and producers.

As others say, I still think there's still a market for big-event theatrical movies. When COVID subsides I hope the larger chains will have survived. When I lived in LA the theaters that were always full and thriving were those situated in bustling outdoor mall/dining complexes or arcades like The Grove, where it was a popular social destination for people to meet friends, go out and see a movie, then have a nice meal. That place was always packed (as opposed to a lot of dying old-style indoor malls). I wonder if developers in colder climates can replicate that with covered-arcade shopping centers with theaters as the anchor.
 
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snakeeyes

Audioholic Ninja
As long as I can still buy on Blu-ray or UHD like with 6 Underground by Micheal Bay starring Ryan Reynolds. That one came out on Netflix 12/10/2019 the same day it came out in theaters. It’s not a perfect movie but I like action movies a lot in my home theater. :)

This one never made it to Blu-ray release so that’s an issue. Maybe it wasn’t everyone’s favorite though. :)

My main issue with streaming only is more to do with DD+ vs Dolby TrueHD but that can’t happen in streaming until our Internet is a lot faster everywhere. :)
 
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lovinthehd

lovinthehd

Audioholic Jedi
As long as I can still buy on Blu-ray or UHD like with 6 Underground by Micheal Bay starring Ryan Reynolds. That one came out on Netflix 12/10/2019 the same day it came out in theaters. It’s not a perfect movie but I like action movies a lot in my home theater. :)

This one never made it to Blu-ray release so that’s an issue. Maybe it wasn’t everyone’s favorite though. :)

My main issue with streaming only is more to do with DD+ vs Dolby TrueHD but that can’t happen in streaming until our Internet is a lot faster everywhere. :)
Then again fewer movies are making it to bluray now....but actually would have thought they'd make 6 Underground available altho personally it didn't make me go look....
 
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Movie2099

Audioholic Chief
Then again fewer movies are making it to bluray now....but actually would have thought they'd make 6 Underground available altho personally it didn't make me go look....
I wish Netflix would release all their movies on 4K physical copy. They just released the Irishman on Criterion Collection which is just a blu ray. That movie would be awesome on a 4K physical disc. It’s not like they wouldn’t make any money....
 
lovinthehd

lovinthehd

Audioholic Jedi
I wish Netflix would release all their movies on 4K physical copy. They just released the Irishman on Criterion Collection which is just a blu ray. That movie would be awesome on a 4K physical disc. It’s not like they wouldn’t make any money....
Don't do 4k yet myself but was it streamed as 4k? Criterion is good stuff tho :)
 
M

Movie2099

Audioholic Chief
Don't do 4k yet myself but was it streamed as 4k? Criterion is good stuff tho :)
I’ve heard the Criterion collections are nice. Yeah, it was streamed in 4K. I’m being greedy. I’m a physical disc nerd. I just keep building my 4K collection. Never know when the word wide web will go down and I won’t have to rely on streaming to survive. Haha!
 
Kingnoob

Kingnoob

Audioholic Field Marshall
Don't do 4k yet myself but was it streamed as 4k? Criterion is good stuff tho :)
I personally don’t see any improvements of 4k over 1080 but I don’t have a tv that can run hdr Maybe the added brightness helps ?
I got no plans on buying a better 4k TV

I quit going to movie theater due to ear pain that won’t go away from seeing movies there .
8k is even further away from having any real content so I see them as pointless .

Covid may kill theaters but not hbo max but $15 a month is not bad if it gets all these movies earlier now during theater release!!
Is it worth the price tho ??
Sent from my iPhone using Tapatalk
 
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brianapp

Audiophyte
What everyone keeps forgetting is people like to get out of the house once in a while. While a person may not be thinking about going to a theater to see a specific movie they will probably be thinking about getting out of the house and a movie is a good activity to get out for. Whether it be going out on a date, going out with a group of friends or getting the kids out of the house for a while just about everyone wants to get out eventually. Once the infection rates start to drop and a vaccine is available to the average person I think there will be a huge bounce back. Concerts, bars, and movies will be in high demand when the media no longer has an excuse to scare the average heathly person back into their homes.
 
Darenwh

Darenwh

Audioholic
I believe that Big movies will go back to the theater release after life gets back to semi normal. The time from theater to streaming platform may change to only a few weeks or a month though. There is just to much value in releasing the newest content to theaters first for that release window to go away.
 

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