Hollywood is still reeling from WarnerMedia's big announcement last week, with all of the studio's 2021 movies heading to HBO Max on the same day they're released in theaters. There is much to unpack with the unprecedented move but the financial ramifications are of particular importance. Case in point, a new report suggests that the studio is leaving at least $1.2 billion in box office behind by going with the hybrid release strategy.
A new report did a deep-dive into the situation, which started when Wonder Woman 1984 was revealed as the first title that would arrive both in theaters and on HBO Max the same day. But this was much more than a one-off. WarnerMedia soon revealed that an expected 17 movies on the calendar for 2021, including Dune, The Suicide Squad, The Matrix 4 and many more, will be getting a similar release. Several of these titles, under the right conditions, could easily have been $1 billion box office hits on their own.
As a result, it's expected that millions upon millions will be sacrificed in the long run. Granted, movie theaters right now are not doing well and uncertainty still looms in the coming months. But with vaccines on the way, the outlook for the second half of 2021 is far better, per many analysts. As such, MoffettNathanson expects $1.2 billion in box office losses. Though the report notes that rival studios expect that number will be higher. John Fithian, president of the National Association of Theatre Owners, had this to say.
"Most people think exhibition will be doing very well in the latter half of 2021. Maybe they won't be doing record numbers, but they will probably be back to profitable business operations."
It is important to note that these movies will still be getting a theatrical release outside of the U.S. But one huge problem is piracy. With the HBO Max release, it opens the door for excellent quality pirated copies to make the rounds internationally. That could undoubtedly impact overseas grosses. IMAX CEO Rich Gelfond had this to say.
"Warners tried to come up with a plan to make content available for the pandemic, but the way they designed the plan is not optimal because they declared the pandemic wasn't going to end until the end of next year."
Behind the scenes, A-list talent is said to be upset about the money they are losing out on. Most talent deals guarantee a percentage of profit on the back end based on box office. The HBO Max release is going to hamper those earnings greatly. The studio did not renegotiate these deals ahead of the announcement. Filmmakers such as Christopher Nolan, Denis Villeneuve and Judd Apatow have spoken out strongly against WarnerMedia's decision. It is a decision that, when all's said and done, could prove to be costly in more ways than one. This news comes to us via The Hollywood Reporter.