In a stunning move, the bright folks down at the Warner Brothers lot have decided to release their entire 2021 catalogue into their new streaming home, HBO Max. A move that shocked the entire industry down to its core, spelling doom to the theatrical cinema…
As expected, some of the industry’s most prominent figures (Christopher Nolan, Denis Villeanuve) have expressed their disdain towards the massive decision, but not for the reason you might think.
The Incompetence of AT&T & Warner Media.
Apparently WB & AT&T thought it was an excellent idea to make this tectonic shift of a decision WITHOUT letting their filmmakers, stakeholders, and production companies know about it first. Which has resulted in a plethora of chaos ranging from a lawsuit from Legendary Entertainment (the production company behind upcoming tentpoles; Godzilla v Kong & Dune), to full-blown boycott by the Director’s Guild of America.
Yes, obviously Nolan, Villeneuve, and so on are disdained by the fact that Warner Brothers are completely disregarding the theatrical experience, but it’s so much more than that – this evidently shows that the higher-ups in AT&T and Warner Bros don’t know what they’re doing – that they don’t comprehend the ripple effect that this has towards the entire industry…
It is abundantly clear that AT&T is financially desperate. After a few bad investments, (such as dropping a whopping $49 billion to buy DirecTV which is currently hemorrhaging subscribers by the minute), and not to mention another $85 billion for the purchase of Time Warner.
The shift to put all of Warner Brother’s entire 2021 catalogue into HBO Max is not an ‘investment of the future’ or ‘a decision for our customer’s safety’ – it is a desperate move to boost HBO Max’s performance, which is currently performing much like AT&T/Warner Media’s other ventures – a flop.
Streaming isn’t Financially Viable.
For years, streaming services has been touted as the replacement for the theatrical model, removing the middle man and restoring full vertical control to the film studios. But evidently, that hasn’t been the case. Netflix for example, arguably the biggest player in the streaming world is currently $20 billion in debt – adding an additional $2 billion every year.
While those numbers might surprise you upon first glance, the more you look into it – the more obvious it becomes. Streaming services solely rely on subscription income, when Netflix releases a big tentpole (i.e Birdbox, Bandersnatch) they hope that the film generates enough buzz to court new subscribers, the views don’t necessarily matter – as long as people subscribe and stay subscribed to the service.
This is why streaming isn’t a financially viable option, and why Netflix is more than $20 billion in debt. If movie theaters were disappear, film studios would have to scale back on their production and shift to creating more serialized content – essentially ending the age of the big summer blockbuster. Which has been the most common fallacy when it comes to the proposal of streaming ending the theatrical model – when people cheer for the death of movie theaters, they think they’re going to get the next Avengers, Star Wars, in their living room. But what you’re probably going to get is the next Trolls sequel, and some low-budget action flicks because no studio in their right mind is going to spend $250 million for a movie to put it in streaming, that’s financial suicide.
There’s a reason why Disney had to change $30, in-addition to a Disney+ membership. They needed to recoup their losses in some way, and even that business model seems to have failed considering there was barely any mention of it during the Disney investors showcase earlier this month.
A New Age of Piracy.
Piracy has been a thing for ages, but what a lot of people are glossing over is the fact that pirated movies for the most part have been very low quality, and they haven’t been much of a financial threat to the theatrical window due to that lack of quality. How many times have you bought a pirated movie, only to realize that you can only tolerate the silhouette of a guy getting up to the bathroom so many times.
This time however, with movies going directly to streaming – pirates are going to have day-one access to the HD versions of these films, and unfortunately consumers are going to have an even bigger incentive to pirate these films as well, especially with subscription prices getting higher by the minute.
Movie theaters will take a massive hit, and it seems that things are going to get a lot worse before they start getting better for them. But they’ll get through it, with deep wounds but they’ll survive nevertheless, most people don’t realize how much they need the theatrical experience, and when the time comes, we will be back – and in greater numbers.
To quote the great Denis Villeanuve… “Long live the theatrical cinema!”