Warner Bros. to release movies on HBO Max for the next year

“Wonder Woman 1984” studio Warner Bros. is throwing a golden lasso around a new and controversial way of releasing movies in a sign of how dramatically the COVID-19 pandemic has changed the film distribution business.

Warner Bros. announced Thursday it will release its entire slate of 2021 films — including potential blockbusters such as the upcoming “Dune,” “Godzilla vs. Kong” and a fourth “Matrix” — in U.S. theaters and on its sister streaming service HBO Max at the same time — a stunning departure from how Hollywood usually does business.

Executives at AT&T Inc.-owned Warner Bros. said the plan is a short-term fix to an extraordinary situation, however, and does not represent a new business model for the studio.

Warner Bros. and other studios have chosen to delay big-budget films rather than release them in a uncertain environment in which the virus is surging and half of U.S. theaters are dark, putting the studios in a tough financial position. Warner Bros. will still release its movies in theaters in other countries, which don’t have access to HBO Max.

The studio already disclosed that on Christmas Day it would release “Wonder Woman 1984” simultaneously for streaming and in theaters, a tactic known as “day-and-date” in industry jargon. So far, 8.6 million households have signed up for HBO Max, which costs $15 a month. The strategy will continue in 2021.

“It’s a temporary solution to COVID,” Carolyn Blackwood, chief operating officer of Warner Bros. Pictures Group, said in an interview. “We know the U.S. marketplace is the most challenged. Knowing that, and knowing we’re fully committed to theatrical, our question was, How are we going to handle this and create a dynamic that can benefit all of the stakeholders?”

However, it’s no secret that studios have long wanted to experiment with new ways to distribute movies as consumers’ moviegoing habits were evolving, even before COVID-19 restrictions shuttered theaters. Simultaneous releases have long been a source of bitter dispute between studios and theaters.

Under the longstanding model, studios waited at least 74 days after movies hit theaters before making them available for home viewing. But the pandemic has given movie distributors far more leeway to experiment.

The new release method follows major moves by rival Universal Pictures to shorten the theatrical release window to as few as 17 days through deals with AMC Theatres, Cinemark and Cineplex. Walt Disney Co., the most successful studio in terms of theatrical movies, has delayed films such as “Black Widow” into next year but has moved others, such as “Hamilton” and Pixar’s “Soul,” straight to the Disney+ streaming service.

Warner Bros.’ movie distribution plan, however, is the most aggressive to date. The Burbank studio said Thursday it will make its movies available on HBO Max for 31 days for no extra charge starting when they’re released in U.S. cinemas. After that period, the movies will disappear from the platform and continue to run in multiplexes.

The strategy could give a much-needed boost to HBO Max, which Warner Bros.’ parent company launched in May in hopes of competing with Netflix and Disney+ in the digital arena.

HBO Max will pay Warner Bros. a licensing fee for the movies.

“We see an opportunity to do something firmly focused on the fans, which is to provide choice,” Jason Kilar, chief executive of WarnerMedia, the AT&T division that encompasses Warner Bros. and HBO Max, said in a statement. “Whether that choice is to enjoy a great new movie out at the cinema, to open up HBO Max, or to do both.”

Shares of theater owners, including AMC Entertainment, Cinemark Holdings and Marcus Corp., plunged on Wall Street. Cinemark fell $3.74, or 22%, to $13.30. AMC plummeted 69 cents, or 16%, to $3.63.

The complicated new release plan comes as theaters face a surging pandemic that has forced exhibitors to close again or cut hours and days of operation.

AMC Theatres, facing a cash crunch, said Thursday it is seeking to raise $800 million in additional capital to withstand the effects of the virus. The Leawood, Kan.-based company, the world’s largest cinema circuit, had praised Warner Bros.’ release strategy for “Wonder Woman 1984” but sharply criticized the studio’s updated plans.

“Clearly, WarnerMedia intends to sacrifice a considerable portion of the profitability of its movie studio division, and that of its production partners and filmmakers, to subsidize its HBO Max start-up,” AMC Chief Executive Adam Aron said in a statement. “As for AMC, we will do all in our power to ensure that Warner does not do so at our expense. We will aggressively pursue economic terms that preserve our business. We have already commenced an immediate and urgent dialogue with the leadership of Warner on this subject.”

Cinemark, the No. 3 U.S. circuit, was muted in its initial response. The Plano, Texas, chain said it was not given details of Warner Bros. model before it was announced.

“In light of the current operating environment, we are making near-term booking decisions on a film-by-film basis,” the company said in a statement. “At this time, Warner Bros. has not provided any details for the hybrid distribution model of their 2021 films.”

The decision follows the disappointing domestic launch of Christopher Nolan’s “Tenet,” which launched in September in hopes of reviving beleaguered cinemas. Weak domestic box office for the time-bending action thriller led studios to further postpone their releases, although the movie performed well internationally.

Warner Bros.’ 2021 release schedule consists of 17 movies: “The Little Things,” “Judas and the Black Messiah,” “Tom & Jerry,” “Godzilla vs. Kong,” “Mortal Kombat,” “Those Who Wish Me Dead,” “The Conjuring: The Devil Made Me Do It,” “In The Heights,” “Space Jam: A New Legacy,” “The Suicide Squad,” “Reminiscence,” “Malignant,” “Dune,” “The Many Saints of Newark,” “King Richard,” “Cry Macho” and “Matrix 4.”