AT&T CEO: ‘Tenet’ Theatrical Release No Fiscal Home Run

Warner Bros.’ return to theatrical distribution remains a work in progress due to the ongoing coronavirus pandemic keeping theaters in key markets closed.

Speaking on the company’s Oct. 22 fiscal call, AT&T CEO John Stankey said he’s “breathing a lot easier now” about the restart of movie and TV productions at Warner, which he said totaled about 130 through the previous week from the pre-pandemic tally of 180 in February.

“We’re well back up [into production],” Stankey said, adding that he didn’t think production needed to return to the previous 180 count based on renewed “rationalizations” regarding market realities.

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“The confidence of employees [working on sets] is growing day by day, so feel good about where that’s at,” he said. “Think we’re out of the woods from the dead cold of the pandemic. That’s going to help our products, most importantly HBO Max.”

The theatrical business, however, is a different reality.

“That’s still one of the things we don’t have great visibility on,” Stankey said.

Prodded by director Christopher Nolan’s penchant for theatrical releases, Warner Sept. 4 launched espionage thriller Tenet in theaters worldwide. While ticket sales were respectable overseas, domestic revenue was not, generating just $50.6 million, or about 15% of the movie’s $334 million global take. The movie reportedly had a $200 million production budget.

“I can’t tell you that we walked away from the Tenet experience saying it was a home run,” Stankey said. “[But] I’m happy we did it.”

The CEO said the studio has had “some experimentation” on distribution, which included forays into early transactional VOD and premium VOD access in the home — the latter around animated movie Scoob!.

“We tried a few things,” Stankey said, without elaborating. “We learned things we can do. I believe if theaters were open nationwide, [if] California and New York were open, we would have some latitude to be able to do some of these geographical releases.”

He said the winter holiday period would be the next “checkpoint” as to whether Warner could move content back into theaters, which Stankey said remains the most ideal distribution channel for major tentpole titles.

“At the same time, we’re expecting this be incredible choppy moving into next year,” he said. “We’re not optimistic … expecting a big recovery in theatrical movement in the early part of next year.”

Stankey expects the theatrical waters to remain “choppy” well into 2021, which he said translates into evaluating all “of our [distribution] options,” including studio teams working the Plan A, Plan B and Plan C plans.

“As we get through the next month or two, we’ll pull the cards on the [plans],” he said.

AT&T CFO John Stephens estimates COVID-19 has had a $1.6 billion negative impact on WarnerMedia, the organizational umbrella that includes Warner Bros., HBO and Turner.

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