It took a pandemic to change the movie business

On Christmas day you can see Wonder Woman 1984 in theaters – if theaters are open where you live – or you can watch it at home on HBO Max.

It is a remarkable thing. This is the first time that you are able to decide exactly when and where you want to watch a big blockbuster Hollywood movie on opening day.

The distribution plans for a superhero movie aren’t the most important news at the moment – we are, after all, struggling with a pandemic that has killed 250,000 Americans. But it’s also worth noting that this modestly consumer-friendly movement – giving people the chance to see a comic book movie where they want to see it – is only happening because of the pandemic.

This decision also tells you a lot about the state of film business (it has a lot of issues) and streaming business, which is in a desperate race to scale.

Quick Context: Hollywood movie studios and big movie theater chains have been battling for years over “windows”: the length of time between when a movie arrives in the theaters and when you can watch it at home . Most studios have tried to reduce this window. They want you to be able to rent a great movie home weeks, not months, after its theatrical debut. Theaters, for obvious reasons, want to keep this gap as wide as possible.

And since theaters make up a big chunk of the revenue a movie can generate, they’ve been able to more or less hold the line. You could sometimes see an indie movie at home at the same time as it debuted in theaters, but for big movies and big studios, that never happened.

Even attempts to experiment with alternative models – in 2011, Universal Studios offered to let you rental Heist Tower, a terrible Eddie Murphy / Ben Stiller movie, for $ 60 while still in theaters – has gone nowhere.

Enter the pandemic, which has closed theaters and forced studios to try different strategies. Most studios have moved most of the big movies they plan to release this year, like Dune or the last Fast furious continued until 2021. Then they experimented with everything else: Universal allowed people to rent Trolls 2 and other home movies. Other studios have taken movies that are supposed to go to theaters and put them into their own streaming services: Hamilton debuts on Disney +, The witches went to HBO Max. Disney also tried a hybrid option by letting Disney + subscribers watch Mulan at home – if they paid $ 30 more.

But so far no one has let you choose whether you want to watch a real blockbuster in a theater with other people, or at home with friends and family. (The first one Wonder woman The film, released in 2017, grossed more than $ 800 million worldwide, which means WarnerMedia, the AT&T unit that owns both Warner Bros. studio and HBO Max, is expecting that the sequel is also a huge success.)

The fact that this is happening now reveals two things:

  • Movie theaters have completely lost the influence they once had. In the past, WarnerMedia would never have tried this because the big theater chains have made credible threats, including refusing to show the film in their theaters. (That’s why, by the way, you can watch Netflix Irish in theaters last year only in small chains and independent theaters. The big chains, like AMC, simply refused to show the movie because they are angry and threatened by Netflix in general.) But the big chains can no longer threaten the movie studios.

That’s because they’re not open, period, or because people don’t want to see movies in theaters, even when they can. WarnerMedia has tried to bring Principle, a potential blockbuster, in theaters earlier this year, and marked by a pandemic The American public simply refused to go. And if cinemas plan to reopen in 2021, they will do so in a very weakened state. They spent this year bleeding money and try to avoid bankruptcy. There is a good chance that many theater chains will have to close several of their locations in the near future; there is also a good chance that some of them will end up with new owners after the Chapter 11 filing.

An indication of weak theaters: Earlier this year, Universal struck a deal with AMC, the world’s largest movie theater chain, to shorten – but not eliminate – the home theater window. This pact was considered astonishing, and it got Universal to give AMC a cut in its rental sales.

But a WarnerMedia public relations representative says the company is not modifying its existing agreements with theaters in any way to Wonder Woman 1984. Theaters that show it can get the cut in box office revenue they always get, and nothing more. In other words: WarnerMedia is betting that the big chains will show the film, on their terms, which they hate. And that they won’t be able to do anything to retaliate.

  • The mainstream media are desperate to catch up with Netflix. The executives of WarnerMedia are fully aware that giving people the opportunity to watch Wonder Woman 1984 at home means a lot of people will watch Wonder Woman 1984 at home, which means they will sell far fewer tickets. Meaning: This is going to cost WarnerMedia a lot of money.

But the company clearly thinks giving audiences a reason to subscribe to HBO Max is worth it. The streaming service – a mix of old HBO and a bunch of new stuff – got off to a slow start when it launched this spring, and it’s hoping a new family-friendly superhero movie will be a reason for it. people to subscribe while on vacation.

And WarnerMedia needs a lot of people to do it: Its owner, AT&T, has promised on Wall Street that it will become one of the dominant streaming services, along with Netflix and Disney. He will ultimately either be rewarded or punished based on that performance, rather than his studio’s short-term performance. So cutting some movie revenue now – and turning theaters upside down along the way – will be worth it for WarnerMedia if it can turn HBO Max into a true competitor to Netflix. And if he can’t, the money he loses Wonder Woman 1984 it doesn’t matter anyway.

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