May 11, 2021

Soldering Point

technology informations

An image from WarnerMedia’s Dune, due out in 2021. | WarnerMedia You can see all...

An image from WarnerMedia’s Dune, due out in 2021. | WarnerMedia

You can see all of Warner Bros.’ movies on HBO Max next year — on the same day they come to theaters. Here’s a Q&A with Jason Kilar about the logic behind the move.

Last month, WarnerMedia announced that HBO Max subscribers would be able to watch Wonder Woman 1984 at home on Christmas Day — the same day it would debut in movie theaters. That was a very big deal for the movie industry.

So this is a much bigger deal: On Thursday, WarnerMedia said it will use the same “day and date” strategy for all of the 17 movies — including would-be blockbusters like Dune, and a new Matrix sequel — that it plans on releasing in 2021.

Hollywood thrives on hyperbole. But it would have been right to describe this move as unimaginable less than a year ago. While some moviegoers and studios have wanted for a long time to make it easier to see movies at home, the movie theater industry has hated that idea and has been able to prevent it from happening.

The pandemic changed that dynamic. The big movie theater chains have lost their leverage, and now WarnerMedia is taking advantage of it — and, crucially, giving HBO Max, its would-be Netflix competitor, a giant boost.

I talked to to WarnerMedia CEO Jason Kilar about the thinking and timing behind his decision, some of the financial repercussions, and what all this means for movies in a post-pandemic world. What follows is a lightly edited transcript of our conversation.

Peter Kafka: When did you start thinking about doing this? Since you started your job last spring? Or only in the last few weeks?

Jason Kilar: Longer than the last few weeks, but it certainly wasn’t on day one. I would say over the latter half of this year. As the pandemic wore on, as we started thinking about the fans and partners and exhibitors — there were a lot of different concerns that we have. So that’s really when things started — late summer and into the fall. The more and more we spent time thinking about it, the more and more we felt very good about what we first announced with Wonder Woman 1984 and what we’re announcing today.

Kafka: When you announced the Wonder Woman deal, a Warner PR rep told me that you had not struck any special deals with the exhibitors — that you were going to offer them the movie on the same terms you always do. Is that the same for the 2021 slate?

Kilar: On that one I’m going to have to defer, but if I can, we will get back to you. I just want to make sure I get you the proper answer. So I apologize for not answering your question directly. [A WarnerMedia PR rep followed up with this statement: “We are in ongoing conversations with theater owners.”]

Kafka: Let me try it another way: What have the exhibitors told you about your plan?

Kilar: I’ll answer the question I would have preferred you ask.

Putting myself in the shoes of a theatrical distributor: Right now, one of the things I believe could be most helpful to them and their business is a steady stream of new, great movies — and that’s what we’re stepping up to do. Which, by the way, not everybody is stepping up to do.

I think that has weighed very heavily on this decision — what can we do to serve a number of different constituents? First and most importantly, the fans. But also, exhibitors; also talent — directors, actors, storytellers, etc; and a host of other considerations. And we think a lot about exhibition, because really — 10 years from now, 15 years from now, we are going to be in the exhibition business. Because customers want it, and it’s great experience. I do it a lot myself.

With that in mind, where we netted out is that giving a steady stream of big budget, great movies, to movie theaters over the next 12 months, can be very, very helpful to their businesses.

Kafka: It sounds like what you’re saying is that what you’ve told distributors is “This isn’t what you want, but it’s better than nothing.” Is that a fair summary?

Kilar: I would say that if you were choosing between three possible scenarios, of course anyone is going to choose the one that is most favorable to them. The current environment that we’re living in, in the pandemic — there are no choices like that. So I think your assessment is fair, but I think that’s just human nature. Of course, I’d like many things that are just not realistic in the middle of a pandemic. But I’m very grateful for some of the things are available in a pandemic. Like being able to deliver a year’s film slate to theaters, in the middle of what we’re all going through, I think is a really good thing.

Kafka: This only applies to theaters and viewers in the US, and HBO Max isn’t available yet outside the US. When will it be available internationally?

Kilar: We’re working really hard on that.

Kafka: How much is this about the pandemic, and a one-time opportunity, and how much is about you jump-starting HBO Max, which has brand confusion, and hasn’t had a compelling pitch to consumers?

Kilar: [Laughs]. That is a leading question, and I take offense to the premise. I hope you and I can talk more about this soon, where we can have a deeper conversation about HBO Max, and how it’s doing. Because I think you’d be quite surprised at the results.

With that said, this very much started from a function of having a pandemic, first and foremost; having a situation where we have 17 amazing films we’re excited about, and thinking about fans, and what could we do. HBO Max is a part of that, and HBO Max will benefit materially from this decision. But that wasn’t the only consideration by any means. It really started with a) the fans, b) the pandemic, and then HBO Max being able to play a central role in what I think is a very innovative solution.

Kafka: Some of the talent involved in your movies can receive payouts based in part on theatrical revenues. Are you going to have to redo those deals, or compensate them in some way because of the reduced theatrical revenue?

Kilar: There’s a material license fee for the period of time that HBO Max is able to exhibit these films. So that absolutely plays into this. And the talent who participate in the films will be able to participate in that way as well. So there’s absolutely economic consideration for what’s going on here. Obviously, none of us can wave a wand and cause non-pandemic box office to suddenly show up in 2021. But the HBO Max exhibition comes at a price. And talent and the behind the scene folks that get participation get to participate in that.

Kafka: To spell that out: HBO Max, a unit of WarnerMedia, will pay Warner Bros., a unit of WarnerMedia, and the talent in these movies will get a slice of that, in the same way that they’d get a slice of theatrical distribution dollars?

Kilar: That’s exactly right.

Kafka: Big picture. This is exciting for consumers, and something many of us have wanted to see for a long time. How do you give it to consumers in 2021, and then put the genie back in the bottle, after we’ve got a widely distributed vaccine?

Kilar: If I could predict the next 30 days, I could probably give you a better answer of what 13 months from now is going to be like. But when it comes to what we think is the right thing to do, right now — you should read my blog post, because it has some extra things that you didn’t see in the press release — we’re really happy with it. In terms of beyond 2021, we don’t know. I think your question is very fair, but I don’t have an answer for you, beyond, we should obviously check in this time next year.

Kafka: But you are a long-term thinker. And you don’t have to think far out to think about 2022. Should I expect, as a consumer, that I’ll be able to do variations on this going forward?

Kilar: I have no grand pronouncements. I appreciate that you’re in search of one.

Kafka: Ok, here’s a more tactical question: When is HBO Max coming to Roku?

Kilar: [Laughs]. Feel free to call Roku. I can give you their number, and you can ask that question. We are talking to them daily, and they are talking to us daily. But other than that tidbit, I think it’s better for those conversations to remain private until there’s something worthy to share.

I will say, something that I said before about Amazon: It’s very clearly in the interest of Roku, and WarnerMedia, to find common ground here. It benefits both companies — and, even more importantly, fans want it. Usually when you have those dynamics at play, things get figured out. We’re investing a lot of time and energy and thoughtfulness in this one.

Kafka: Is it technically possible that this could happen in time for Wonder Woman? I am under the impression is that it would be hard to flip a switch at this point and make that timing work, even if you reached a deal tonight.

Kilar: The technical aspects of this are not difficult. We signed an agreement with Amazon, and days later we were live with our app on all the Fire devices. The technology is not the constraint.

Kafka: OK. What’s the question you wanted me to ask?

Kilar: The question I wanted to ask you is — did you like our video?

Kafka: I haven’t had time to watch the video.

Kilar: You gotta watch it. I hope that when you watch it, that you’ll use it when you write about this. I got a kick out of those 43 seconds and I hope you do too.

Kafka: Duly noted.

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