AT&T CEO John Stankey has defended his company’s decision to release the 2021 Warner Bros. film slate on HBO Max on the same day they hit theaters, calling the plan “a win-win-win” for the company, creative talent and consumers.
“One of the unfortunate effects of the pandemic is there basically has been no theatrical exhibition business,” Stankey said during his Tuesday morning keynote conversation at the UBS Global TMT Virtual Conference. “That’s painful for a lot of people and yet, in our case, we still have a fair amount of content that was in the pipeline and being developed.”
He noted that while other media giants have sold off films to streaming services, “giving those people that are some of your most significant competitors additional arms is probably not the most intelligent way to deal with that content.”
In addition, Stankey acknowledged the desire to ramp up WarnerMedia’s seven-month-old HBO Max streaming service with high-profile content that could drive new subscriptions so it could better compete with category leaders like Netflix and Disney+.
The decision — which involves rolling out up to 17 new movies, including big-budget tentpoles like “Godzilla vs. Superman,” “Dune” and “Matrix 4,” in theaters and on HBO Max on the same day — was driven in part about the uncertainty of releasing movies in theaters as the pandemic has dragged on.
“Our feeling was, in the theatrical business, based on our best discussion with experts, we were going to be in a situation where the psyche of the population, people’s willingness to go back into large venues, go to concerts, do big group things, that’s going to be a little bit of a prolonged recovery, even though we’re going to see progressive improvement in the dynamics of the United States over the next series of quarters,” he said.
“Any time you’re going to change a model, I know it creates a degree of noise and this is certainly no exception but I think ultimately, rational parties will step back and look at this and say, giving theater owners a predictable release of content over the next several months that they can plan around and start to work their business around is a good thing for them,” he said. “We think getting the product on the market in a staged way is important because snowplowing all theatrical content into late ’21 or early ’22 probably isn’t going to help anybody because the market isn’t going to dramatically increase in size of the number of people that want to see that kind of content in the theater if everything starts showing up at the frontend of the funnel there. So we think smoothing that out is frankly in the best interest of not only our product, but those who create it so that we get exposure.”
Stankey also noted how consumer behavior has changed during the pandemic. “Even before WarnerMedia made this decision, customers could go watch great two-hour content on a variety of competitive services to HBO Max or any other streaming service that was out there — some of them, very significant releases,” he said. “So customers are going to drive what occurs in the market, ultimately.”
WarnerMedia also learned some lessons with the September release of Christopher Nolan’s “Tenet,” a $200 million-budgeted sci-fi film that grossed less than $58 million domestically due in large part to the limited number of movie theaters open this fall as well as consumer reluctance to congregate even in venues with limited capacity.
“Our approach to this has been to lean in and make sure that we’re leaning into where things are going, not try to stay overly connected to what worked out for several decades as a model that was in place for a period of time,” Stankey said. “And I think there’s a balancing act here. We’re going to continue to talk with all of our partners. And I think we’re going to end up finding that having choice and having multiple platforms of which to move content through is a good thing.”
He also emphasized that streaming was not a replacement for theaters — which may see a boost as vaccination efforts expand next year. “We’re not putting one over the other, we’re doing both theatrical and streaming at the same time and, ultimately, moving that content back through other traditional windows that exist,” he said. “And this to me seems like a very friendly and innovative approach. And we’re at a rare time right now in this year with this pandemic, and what happens as we get through the backend of it and people are willing to congregate and do things again, we’ll adjust and work the model differently.”
On Thursday, WarnerMedia CEO Jason Kilar announced the decision to put all ’21 WB movies on HBO Max on their theatrical release date. It has not proven to be an entirely popular choice among some top producers and film directors.
Christopher Nolan has called the move a “bait and switch” and “Dune” producer Legendary is considering a lawsuit.
Warner Bros.’ 2021 slate includes “Godzilla vs. Kong,” LeBron James’ “Space Jam” reboot, DC Films’ “The Suicide Squad,” the sci-fi epic “Dune” and Lana Wachowski’s “Matrix 4.”