Warner’s new plan to release all their 2021 films on HBO Max could end up costing them over $1 billion in box-office revenue; CEOs still have hope.
Warner Bros. may be shaking up the entertainment world with their radical new approach to HBO Max, but some executives in the industry fear Warner’s new plan could cost over $1 billion in box-office revenue. This huge impending change is the result of a global pandemic, conflict among CEOs, and one decision about the release of Wonder Woman 1984 that grew into WarnerMedia’s overall strategy for 2021.
The highly anticipated Wonder Woman sequel has faced several delays over the course of its production, both for creative reasons and because of the coronavirus outbreak’s impact on box office turn out. After months of waiting, WarnerMedia CEO Jason Kilar and his fellow executives decided to adopt a new strategy for Wonder Woman 1984: They would release the film both in theaters and on their new streaming service, HBO Max. Warner executives apparently had so much confidence in their plan that they decided to use this release strategy for all of their 2021 films.
But according to an analysis from THR, Kilar’s decision to shift to streaming could cost Warner up to $1.2 billion in revenue. The problem comes from the nature of streaming platforms: They provide audiences with more choice, but they also bring in less money than theatrical releases. Some filmmakers worry that the shift to streaming could cause fewer high-budget movies like Wonder Woman 1984 to be made. Picture Group chairman Toby Emmerich defends Kilar’s strategy, stating, “We’re not saying this is our strategy going forward; this is our strategy for 2021. We’re going to learn a lot as we go along, as the business rebounds and evolves in a post-COVID world.”
Past executives from WarnerMedia have a less rose-colored view of Kilar’s HBO Max plans. They assert that Kilar and AT&T CEO John Stankey suffer from something called “Netflix envy,” a common occurrence among television executives today. These CEOs see the apparent success of Netflix’s streaming platform and incorrectly assume that they too will inherently succeed in a streaming market. Those past WarnerMedia employees suggest that Kilar has far less knowledge of the streaming industry than he lets on.
This is a lot of corporate conflict to take in, but all of this means a few key changes for a regular viewer. The first change is that HBO Max will soon have a lot more options in their library, potentially making it more worth the $14.99 a month. The second change will depend on the U.S.’s response to the coronavirus pandemic. If virus rates go down in 2021, it’s likely that audiences will begin to return to movie theaters, encouraging Warner and other companies to move away from streaming releases. But if infection rates continue to rise in the new year, HBO Max could be the first in a wave of streaming platforms to take over the film industry and change the moviegoing experience for everyone.