In 2021, Warner Bros. announced it would release all of its movies simultaneously in theaters and on its streaming platform HBO Max. Now, it's changing course again, and doing away with this strategy in 2022 in favor of a more traditional release schedule.
So, what does this mean for movie releases, and how will it change the streaming landscape?
Warner Bros. Backtracks on Same-Day HBO Max Releases
Before the COVID-19 pandemic, most theater chains required a 90-day exclusivity window before films could be released online. Then, with lockdowns forcing theaters closed, prioritizing streaming releases became the new norm; many movie studios released their films only on streaming, or simultaneously alongside theaters.
However, as lockdowns lift, theaters have reopened, which causes complications for this strategy. In 2020, Warner Bros. was slammed for adopting a same-day release strategy, which entailed releasing movies on HBO Max on the same day they would be released in theaters.
Warner Bros. has now reversed course and will debut some of its films first in theaters, before they arrive later on HBO Max. This might revive theaters, especially as more people get vaccinated and the world gets back to normal.
Besides receiving backlash for its same-day release strategy from theater owners, studios have also received backlash from actors, whose pay is often tied to box office performance, with Scarlett Johansson suing Disney over Black Widow’s release.
With actors, filmmakers, and theaters going against them, it’s not surprising that studios are considering going back to the old way of releasing movies.
Theater Chains Are Understandably Happy About the Change
From 2022, Warner Bros. will give theaters 45-day exclusivity window before releasing new titles on HBO Max (though 10 of its movies will get same-day streaming treatment.) The first theater chains set to benefit are Regal Cinemas, Cinemark, and AMC.
AMC CEO Adam Aron commented on the new strategy during an earnings call:
It’s especially gratifying that Warner Bros. is yet again embracing a theatrical window. For us at AMC, it’s especially pleasing to be working so harmoniously with Warner Bros. once again.
But this doesn't mean streaming will take a back seat at Warner Bros. Speaking during AT&T’s second-quarter earnings call, WarnerMedia CEO Jason Kilar said that theatrical releases will continue to be important to Warner Bros., but it can’t ignore the success it has garnered from at-home viewing.
The motion picture format absolutely matters and it matters in a number of ways. It matters in theaters ... They also matter at home and, absolutely, in terms of the response that we’ve gotten not just from that title but from all of our day-in-day titles. We feel very good about the response that consumers have given it in the home.
Considering the success that Warner Bros. is seeing with streaming, it's no surprise it isn't yet willing to give theaters a larger lead time before releasing new titles online, especially as HBO and HBO Max have topped 47 million U.S. subscribers during the second quarter of 2021, up 2.8 million from the first quarter.
As for movies made just for HBO Max, those will only go to theaters in limited runs at select locations if they are expected to be Oscar contenders.
What Strategies Are Other Studios Following?
Warner Bros. isn’t the only studio negotiating to bring back theater exclusives in some way. Universal has also worked out a deal with AMC, which allows for as little as a 17-day exclusivity window; and Disney, along with Paramount, will also be implementing a 45-day window, too.
Just like Warner Bros., most of those studios have their own respective streaming services, but theaters are evidently still an integral part of the movie business. During its earnings call, AMC said it has an “active dialogue with every major studio” about theater exclusivity windows.
What the Future Looks Like for Movie Releases
Warner Bros.' new release strategy is a sign that the entertainment industry as we know it is slowly getting back to normal—albeit not fully.
Considering how the same-day release strategy has caused some tension and resulted in a lack of trust between movie studios and theater owners, the implementation of a tiered strategy will go a long way towards repairing those relationships.
With more studios adopting a tiered release strategy that gives theaters lead times for movie releases, both streamers and theater owners will benefit, leveling out the playing field. But it may be awhile before theaters enjoy the same exclusivity they did before.
Even though COVID-19 vaccinations will probably open up more theaters as lockdown rules are relaxed, the pandemic is here to stay—at least for now—so the world will not yet go back "normal" as we know it. That means streaming may continue to be prioritized more as more people continue to enjoy consuming content behind closed doors.
As stated by WarnerMedia CEO Jason Kilar in the same earnings call:
In terms of where things go in the future, I think it’s fair to say that, and I’ve said this before publicly, I certainly don’t anticipate us going back to the way the world was in 2015 or 2016 or 2017, where windows were quite lengthy between theatrical and home exhibition whether it was an a la carte transaction or something else.
What Warner Bros.’ New Strategy Means for HBO Max Subscribers
By now, if you're an HBO Max subscriber, you're probably wondering what your best course of action is, especially if you signed up for the perk of watching movies on the same day they start showing in theaters. Well, that depends.
If you prefer watching major titles from the comfort of your home, you may want to consider hopping over to streamers like Disney+, so you can continue to be spoiled through Premier Access.
But if you don't mind when the new releases arrive on HBO Max, and perhaps even prefer to see them first in theaters anyway, this change in strategy likely won't bother you much.
Streaming Is Here to Stay
The pandemic has shifted the way studios like Warner Bros. do business, and may continue to do so; but because the pandemic will be around for the unforeseeable future, streaming will increasingly become a priority, even as theaters bounce back fully.
Therefore, as with everything else, time will tell whether theaters will again enjoy a 90-day exclusivity window. No matter what strategies studios adopt or how they adapt to the new normal, streaming is here to stay.