WarnerMedia’s CEO explains why he’s blowing up the movie business

Last month, WarnerMedia announced that HBO Max subscribers could watch Wonder Woman 1984 at home on Christmas Day – the same day he would make his theatrical debut. It was a really big deal for the movie industry.

So it’s a much bigger deal: Thursday, WarnerMedia said it would use the same “date and date” strategy for all 17 films – including potential blockbusters like Dune, and a new Matrix suite – which it plans to release in 2021.

Hollywood thrives on hyperbole. But it would have been fair to describe this movement as unimaginable less than a year ago. While some moviegoers and studios have long wanted to make it easier to watch movies at home, the movie industry hated the idea and was able to prevent it from happening.

The pandemic has changed this dynamic. The big movie chains have lost their influence, and now WarnerMedia is taking advantage – and, most importantly, giving HBO Max, its future competitor Netflix, a huge boost.

I spoke to WarnerMedia CEO Jason Kilar about the thinking and timeline behind his decision, some financial implications, and what that all means for films in a post-pandemic world. The following is a slightly edited transcript of our conversation.

Peter Kafka

When did you first start thinking about doing this? Since you started your job last spring? Or just the last few weeks?

Jason kilar

Longer than the past few weeks, but it certainly wasn’t the first day. I would say during the second half of this year. As the pandemic progressed, as we started to think about the fans, partners and exhibitors, we had a lot of different concerns. So that’s really where it started – late summer and fall. The more time we spent thinking about it, the better we felt with what we first announced. Wonder Woman 1984 and what we are announcing today.

Peter Kafka

When you announced the Wonder Woman deal, a Warner PR rep told me you didn’t have a special deal with the exhibitors – that you were going to offer the movie to them on the same terms as you do. always. Is the same for the 2021 slate?

Jason kilar

On that one, I’ll have to postpone, but if I can, we’ll get back to you. I just want to make sure I give you the correct answer. So I apologize for not having answered your question directly. [A WarnerMedia PR rep followed up with this statement: “We are in ongoing conversations with theater owners.”]

Peter Kafka

Let me try another way: what did the exhibitors tell you about your plan?

Jason kilar

I’ll answer the question I would have preferred you to ask.

Put myself in the shoes of a theater distributor: at the moment, one of the things that I think could be of most use to them and their business is a constant stream of new and great movies – and this is what we are trying to do. By the way, not everyone intervenes.

I think that weighed heavily on that decision – what can we do to serve a number of different voters? First and foremost, the fans. But also, exhibitors; also talent – directors, actors, storytellers, etc. and a host of other considerations. And we think a lot about the exhibition, because in reality, in 10 years, in 15 years, we are going to be in the exhibition business. Because the customers want it and it’s a great experience. I do it a lot myself.

With that in mind, what we took away is that giving a steady stream of big, big budget movies to theaters over the next 12 months can be very, very useful for their businesses.

Peter Kafka

It sounds like what you are saying is what you said to distributors is, “It’s not what you want, but it’s better than nothing.” Is this a fair summary?

Jason kilar

I would say that if you choose between three possible scenarios, of course, anyone will choose the one that is most favorable to them. The current environment we live in, in the pandemic – there is no choice like that. So I think your assessment is fair, but I think it is only human nature. Of course, I would love a lot of things that just aren’t realistic in the midst of a pandemic. But I’m very thankful for some of the things that are available during a pandemic. Like being able to deliver a slate of yearlong movies to theaters, in the midst of what we’re all going through, I think that’s a really good thing.

Peter Kafka

This only applies to theaters and viewers in the United States, and HBO Max is not yet available outside of the United States. When will it be available internationally?

Jason kilar

We are working really hard on this.

Peter Kafka

How much of this is about the pandemic and a once in a lifetime opportunity, and how much does it mean for you to relaunch HBO Max, which has confused the brand and hasn’t had a convincing pitch to consumers. consumers?

Jason kilar

[Laughs] This is a leading question, and I am offended by the premise. Hope you and I can talk more about this soon, where we can have a more in-depth conversation about HBO Max and how it works. Because I think you would be quite surprised at the results.

That said, it all started with a pandemic function, first and foremost; to have a situation where we have 17 amazing movies that we get excited about, and that thinks about the fans, and what can we do. HBO Max is one of them and HBO Max will materially benefit from this decision. But that was by no means the only consideration. It really started with a) the fans, b) the pandemic, and then HBO Max was able to play a central role in what I think was a very innovative solution.

Peter Kafka

Some of the talent involved in your films may receive payments based in part on movie theater revenues. Are you going to have to redo these deals or somehow offset them because of the drop in movie revenues?

Jason kilar

There is a hardware license fee for the period that HBO Max is able to exhibit these movies. So, that absolutely plays into it. And the talents who will participate in the films will also be able to participate in this way. So there is an absolutely economic consideration for what’s going on here. Obviously, neither of us can wave a wand and cause the non-pandemic box office to suddenly appear in 2021. But the HBO Max exhibition comes at a price. And the talents and people behind the scenes who get the participation can participate.

Peter Kafka

To make this clear: HBO Max, a unit of WarnerMedia, will pay Warner Bros., a unit of WarnerMedia, and the talent in those films will get a share, in the same way they would get a theatrical share. distribution dollars?

Jason kilar

It’s exactly that.

Peter Kafka

Overview: This is exciting for consumers, and it’s something that many of us have long wanted to see. How do we give it to consumers in 2021 and then put the genius back in the bottle after we have a vaccine widely distributed?

Jason kilar

If I could predict the next 30 days, I could probably give you a better answer on what will look like in 13 months. But when it comes to what we think is the right thing to do, now – you should read my blog post, because it contains additional material that you did not see in the press release – we are very happy with it. Beyond 2021, we don’t know. I think your question is very fair, but I have no answer for you, beyond: “We should obviously register this time next year”.

Peter Kafka

But you are a long-time thinker. And you don’t have to think far to think about 2022. Should I as a consumer expect to be able to make variations on this in the future?

Jason kilar

I don’t have big statements. I appreciate you looking for one.

Peter Kafka

Okay, here’s a more tactical question: When is HBO Max coming to Roku?

Jason kilar

[Laughs] Don’t hesitate to call Roku. I can give you their number and you can ask that question. We talk to them daily, and they talk to us daily. But other than that tidbit, I think it’s best to keep these conversations private until there’s something worthy of sharing.

I would say, something i already said about amazon: It’s very clearly in the best interests of Roku and WarnerMedia to find common ground here. It benefits both companies – and, more importantly, the fans want it. Usually when you have these dynamics in play, things are understood. We invest a lot of time, energy and thought into this one.

Peter Kafka

Is it technically possible for this to happen in time for Wonder woman? I feel like it would be hard to flip a switch at this point and get the timing to work, even if you hit a deal tonight.

Jason kilar

The technical aspects of this are not difficult. We signed a deal with Amazon and a few days later we were online with our app on all Fire devices. Technology is not the constraint.

Peter Kafka

Okay. What is the question you wanted me to ask?

Jason kilar

The question I wanted to ask you is: did you like our video?

Peter Kafka

I didn’t have time to watch the video.

Jason kilar

You have to watch it. Hope when you watch it you will use it when you write about it. I got a kick out of those 43 seconds and hope you do too.

Peter Kafka

Duly noted.

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