January 27, 2021
AT&T CEO John Stankey again defended WarnerMedia’s controversial decision to release Warner Bros.’ entire 2021 theatrical release slate concurrently on HBO Max for the first 30 days of the title’s release. The strategy, which started with the Christmas Day release of Wonder Woman 1984, has helped drive Max subscriptions, but at the same time upended industry norms, including upsetting backend players such as movie directors, agents and producers.
Speaking Jan. 27 on the company’s fiscal call, Stankey said the decision came down to weighing the best distribution strategies for tentpole and non-tentpole movie releases. He said the distribution economics of a movie like Wonder Woman 1984 is different than the economics of a movie catering to a less broad audience.
“That’s the power in what we did bringing out the entire [theatrical] slate to our end-user base [on HBO Max],” he said. “We’re going to see a little [Max subscriber growth] spikiness in what occurs.
Stankey cautioned that he does not expect to see the same Max sub growth that happened with WW84 occurring on other Warner tentpole movies.
“That is not really the design and intent of the [concurrent release] plan,” he said. “We do have the opportunity to build marketing and promotion opportunities around the bigger releases that have broader buzz and broad application across the customer base. We’re going to take every advantage of doing that.”
Stankey reiterated that 2021 is a unique year for theatrical movies due to the pandemic, and WarnerMedia management acted accordingly — backed by the availability of new streaming video business and what the studio thought the moviegoing consumer was going to look like in 2021. Stankey said initial data points around the hybrid release strategy have proven correct thus far.
“The team made the call, and I think it was a bold and aggressive swing. It was done with a lot of thought and what needed to be done,” he said, despite contending the issue has been “oversold and intense” by the media on both ends.
The CEO said the decision has been further validated as other studios continue to “snowplow” their theatrical releases into the second half of the year and beyond.
“We’re going to see a very crowded theatrical field as we get into late 2021 and early 2022,” Stankey said. “We don’t believe that magically because there’s more content showing up in theaters at the same time, that’s going to dramatically increase the size of the moviegoing population.
“Making lemonade out of lemons was the right call in this case,” he said. “We have to step back and [realize] that nobody went to theaters in 2020 for the most part. There was a pandemic. Nobody got on an airplane. Nobody went to hotels. And nobody goes to restaurants.”
Stankey said the crisis has been disruptive to myriad businesses in a marketplace already undergoing major changes, including ongoing consumer migration away from pay-TV to over-the-top video and the desire for a “simpler model around that.”
“I applaud the team for the move they made in trying to make thebest of this circumstance, and our circumstance having a really strong theatrical slate that can really help our streaming product,” he said.
Stankey acknowledged relaying the decision within Hollywood was going to produce controversy when you’re a “trailblazer,” and “there’s nothing perfect to read.” He said Warner has been good to Hollywood and to theaters — the latter with a concrete release strategy.
“There are things on the margin we’d do a little bit differently, but at the end of the day we will make sure people are being fairly compensated and treated well,” he said. “In the end, this will ultimately shape up to be a good thing across the board.”