AT&T initiated a media offensive on Tuesday (December 8), one day after Christopher Nolan blasted WarnerMedia’s controversial 2021 HBO Max-theatrical release plan, echoing the sentiments of disgruntled exhibition and Hollywood talent agents.
John Stankey, AT&T CEO, told the UBS Global TMT Virtual Conference that the strategy was necessary to monetise the Warner Bros feature slate, adding, “Any time you are going to change a model, I know it creates a degree of noise and this is certainly no exception.
”But I think ultimately, rational parties will step back and look at this and say, giving theatre owners a predictable release of content over the next several months that they can plan around and start to work their business around is a good thing for them.”
Stankey said the number of HBO Max subscribers had gone up by four million from the end of the third quarter to 12.6m. He added that in the last 30 days series The Undoing and The Flight Attendant have driven up the amount of time members spend on the service by 36%.
Meanwhile WarnerMedia Studios and Networks chair and CEO Ann Sarnoff told CNBC’s financial news show Squawk Alley that the strategy to release Warner Bros’ entire 17-strong 2021 feature slate simultaneously on HBO Max (for one month) and in US theatres was a one-year response to the pandemic that established a “creative, win-win situation”.
“We are big, big fans of the exhibitors,” said Sarnoff. “We have been great partners with them including in releasing Chris Nolan’s movie Tenet in the summer. We had a great partnership with the theatres and are very happy with the release.”
Sarnoff noted, “We are really trying to work with the cinemas to give them ready supply, and we thought that by announcing that we’ll have all 17 movies in theatres in 2021 that they would know that their business could operate because they will have a full stream of movies.
“Many other studios have been kicking the can down the road, so to speak, and moving the movies either later in 2021 and 2022 and in fact about 35 movies have been pushed to digital, either sold to streamers or to PVoD. We didn’t want to do that – we wanted to see the movies on the big screen, the way they were meant to be.”
After WarnerMedia decided to send Wonder Woman 1984 to HBO Max the same day as its US theatrical release on December 25, The New York Times reported that the studio agreed to pay star Gal Gadot and director Patty Jenkins $10m each in lieu of back-end profit participation.
It is understood the calculation was based on the assumption that a global theatrical release of the superhero sequel would have grossed $1bn in the absence of a pandemic.
Asked about talent relations, Sarnoff said, “We have negotiated fully vetted, market-based rates for the window that HBO Max is buying, if you will – the 31-day availability on HBO Max – and they’re paying for that and it’s going into the pot, so that the economics are balanced out for any potential theatrical cannibalisation by being on HBO Max.
“We’re working through this system with our talent, with their agents. I think the more they see the visibility of how they will be paid, people are understanding the economics.
When pressed on whether the strategy would continue beyond 2021, the executive replied, “This is a 2021 strategy. We do not know what’s ahead beyond 2021. We are very hopeful that we’re beyond the pandemic [after 2021].
“This was really a makeshift solution to be able to afford to market the movies and put them in theatres. We really wanted them to be able to be seen on the big screen… As the year goes on we’ll revisit and work with the theatres and work with our talent and agents to see how 2022 is shaping up.”
Warner Bros’ 2021 slate includes Dune (pictured), Matrix 4, Reminiscence, Tom & Jerry, Judas And The Black Messiah, and The Suicide Squad.