Warner Bros. Pictures is saving cinema.
In early December of 2020, I first sat down to write this article. That first line was going to be my headline. The same day HBOMax/theater release strategy felt like the best possible decision considering the state of the world. Not every theater in the country was closed. Those that were open had become dependent mostly on limited run and re-release films. Warner Bros. was making the risky decision to keep their film slate moving while offering open cinemas a bone. A very tiny bone, but a bone nonetheless. That was my gut response, but, holy cow, it was not the popular response.
It was easy to understand why many see the strategy as an assault on the traditional box office. Prior to the pandemic same-day theater/VOD was a rarely used tactic. It was mostly practiced by limited run indie flicks that had a difficult time getting on big screens. It was unheard of for a major distributor to ever do same-day theater/VOD. Much less give a film up for free to subscribers on their streaming platform (as far as I know). People would stay home. Theaters would die.
That criticism was flawed because it ignored the reality of the world. However, in fairness to the critics, Warner Bros. made several missteps leading up to and immediately following the announcement.
The COVID Vaccine Problem
It was baffling to realize COVID was an elephant in the room during the Warner Bros. release date discourse. People were approaching the debate like everything was normal and we had a grasp on the pandemic. Even months later we have no idea when cinemas will be back to normal. Many states and areas will likely be able to open sooner than others. Some will need to roll back their openings.
I’m writing this from one of the largest movie-going markets in the country. We’re still tightly shuttered. Current projections suggest the earliest I’ll receive my first vaccine shot is in June. If there are enough to go around, the second could come as early as July. And that assumes the increasing number of variant strains doesn’t become a bigger issue.
As a result of the inconsistent reopening window, the big studios continue to push calendar dates. Cinemas face uncertainty when it comes to programming and staffing. Every studio wants their films to be seen on the big screen by as many people as possible. Warner Bros. seems to have acknowledged there’s no perfect time to get back to the big screen business. The company has made the decision to move its slate forward while boosting subscriptions for its platform.
Based on early box office numbers the plan appears to be working. Exploring 2021’s first two months of “In-Year” releases Warner Bros. has three of the top 10 highest-grossing films. Those three films make up 71 percent of the domestic box office for the top 10 films. Including films released in 2020 still on screens in 2021, the picture is even better for the Warner Bros. Pictures strategy. Wonder Woman 84 continues to put people in the seats grossing nearly $20 million since January 1. It gives the film company four of the top 10 grossing films of the year.
Reality: A Global Cinema Audience
Time Warner is a global company and it isn’t only making content for a U.S. audience. Other parts of the world are opening up faster than the United States. Most significantly is China, the second-largest film market in the world. 2021’s Lunar New Year, typically one of China’s largest box office weekends, set a new all-time record this year. Film fans generated $1.2 billion. That’s an astounding number when one considers many Chinese theaters are still working within COVID restrictions.
US studios were mostly absent from Chinese theaters during the Lunar New Year. This isn’t unusual even in a non-pandemic year. That weekend is traditionally reserved for the release of Chinese-produced blockbusters. It’s the following weeks when US films usually have a chance to shine.
This year that honor goes to Tom and Jerry. The film brought in an estimated $14 million over the premiere weekend. That’s small potatoes compared to previous years, but it still makes up nearly 50 percent of the company’s $40 million global opening weekend haul. The movie’s budget is projected to be $80 million. Considering global circumstances it isn’t a terrible haul toward eventually breaking even. Check out Warner Bros.’s film The Little Things cracking the top ten at $23 million.
The Dune Debacle
Warner Bros. definitely made mistakes with the announcement. Reading that Denis Villeneuve found out about the decision to release Dune same-day theater/VOD through media reports, like some common cinephile, suggests the leadership at AT&T doesn’t view the relationship with the people who make films as a partnership. AT&T sees it as content to sell tickets or create subscriptions. Full stop.
My first assumption was the decision must have been made through partner discussions. Villeneuve’s statement combined with Legendary considering a lawsuit over Dune and Kong vs. Godzilla made it clear that good healthy relationship discussion didn’t happen.
It is unfortunate. Filmmakers and partners should have received an opportunity to join the distribution plan or remove films from the calendar. The director believes “everything should be back to a new normal next fall.” Perhaps Warner Bros. did the math and came to a different conclusion. Regardless, Warner Bros. could have handled it better while respecting the director and partner production company.
Does same-day release increase piracy?
One of Villeneuve’s biggest concerns with the TimeWarner method is same-day release at home and in theaters will increase piracy. He might be right. TorrentFreak’s 2021 most pirated lists show same-day release films consistently in the top five. Warner Bros. Pictures take four of the top six spots for the week ending March 1. More on that in a moment.
It’s hard to say pirating wouldn’t happen anyway. Last year, Warner Bros. dropped Tenet into US theaters the weekend of September 3. It wasn’t available for streaming until December. The Christopher Nolan film ended up the fourth most pirated film in the weeks ending September 7 and 14. The fact that Tenet never topped Disney’s Mulan or Bill and Ted Face the Music. appears to support Villeneuve’s worry. Both films were released in theaters and on VOD (for a price). Both of those films stayed in the top 10 for six to eight weeks while Tenet dropped out after two. Likely it came down to torrent quality. Tenet was likely a pan and scan. The other two films possibly pulled from high-quality streaming platforms.
Tenet wouldn’t come back to the pirated top ten until the week ending November 30. That week it would land at number two and then spend the next three weeks at number one. Wonder Woman 84 knocks it off Christmas week. Why did Tenet make a comeback? The film didn’t arrive on DVD or streaming until December 15. It’s likely someone managed to get the DVD before the official release and converted it into a torrent. Higher quality torrent = increased piracy.
It seems worth noting Tom and Jerry, The Little Things, Wonder Woman 84, and Judas and the Black Messiah are among the top six most pirated films of the week ending March 1. Those same films are in the top six at the box office. The big unanswered question is are people continuing to subscribe to HBOMax, go to the movies, and pirate? We know WW84 provided a surge in subscriptions, but has that held? We likely won’t know until AT&T’s Q1 earnings report.
Piracy versus the Theater Attendee Problem
Does same-day release hurt cinemas? This is a tough question to answer. One study (and I stress ONE STUDY), found piracy is a bigger issue when a film leaks pre-release. Leaked films can impact the box office by a revenue decline of up to 11 percent. On the flipside, when films end up on pirate sites post-release it might help increase the box office take.
The increase could be due to more people having an opportunity to join in the overall discussion. Cinema attendance frequency has been well studied. We know only a small portion of the population goes to the cinema on a regular basis. According to one survey, only 14 percent of participants said they went to the cinema more than once per month. Forty percent of participants said they went to the cinema less than once a month. A whopping 46 percent said once a year or less. If those 46 percenters can now access a film same-day release it could add to the social media hype. It could push those 40 percenters to make that their film of choice.
All of that said, the school’s still out. We’ve never had a steady flow of big-budget films doing same-day releases. We won’t have accurate numbers on the impact of same-day release until that happens. It’s completely understandable why a filmmaker like Villeneuve wouldn’t want to be part of that experiment.
The Business as Usual Problem
Even before anyone was experimenting with same-day release theater attendance was on the decline. Pointing a finger at piracy is overly simplistic. There are more entertainment options than ever before. Yet Hollywood and cinemas have done very little to change an outdated film-going experience. The multiplex model has been around for nearly 60 years (thanks, AMC Parkway). Sixty. Years. Most of the innovation that is happening is simply wedging small ideas into the old model. Sure your theater now has reclining massage chairs, but you’re going to pay for it through increased ticket prices. Is the issue really that seats aren’t comfortable? Or is it that one night at the cinema for a family of four costs the same as a six-month Netflix subscription?
Okay, thanks for the rant, but will the Warner Bros. Pictures model save cinema?
We need more data. We need data not skewed by fluctuating pandemic calendars. What it does look like is the Warner Bros. Pictures’ decision has given reopening cinemas a longer runway to use for lift-off. Cinemas can be confident knowing Warner Bros. is committed to the calendar. In many cases, the other distributors have left big question marks and uncertainty. Black Widow has moved so many times few theaters can confidently plan for a release on May 7, 2021. Warner Bros. seems to have reflected on the Tenet kerfuffle and decided it was healthier to stop, uh, messing with time.
My worry is even when the surviving theaters reopen at maximum capacity it’ll be back to business as usual. I don’t want to see any cinemas shutter. However, I’m not sure every chain deserves to have all of their cinemas reopen. If we want to save cinemas there needs to be a drastic change and the courage to take risks. Not band-aids. It shouldn’t take a pandemic to make that happen.