Monday, December 7, 2020

BUSINESS - Warner Bros. to Release All 2021 Films on HBO Max and in Theaters Simultaneously

On Dec 3, 2020, Warner Bros. studio announced that they will release their whole slate of 2021 movies simultaneously in theaters and on its HBO Max streaming service. Movie theater owners, from the biggest chain to the mom-and-pop single cinema, decried that this strategy will kill their business. Who will go out to the movies if they can watch at home?

Instead of looking at this as an existential threat, movie theater chains should look at this as an opportunity to expand the film industry into a new horizon. Let's call this strategy the Theater Only Release (TOR) / Streaming Only Release (SOR) strategy. Instead of passively waiting for the studios to give them movies, the theater chains will work with the studios to customize movies in production for theater release only. The TOR movies may have extra or different scenes; they may have extra or different secondary characters; they may even have somewhat or totally different creative endings. In other words, for each movie, the studios will release a TOR version exclusively for movie theaters, and a SOR version exclusively for streaming services. The additional cost for versioning is not exorbitant since scenes that used to get cut during editing will now have good use; and dissimilarities can be planned as part of the script to reuse the actors, crews and locations.

Fans who cannot get enough of a movie will see both versions, lessening the cannibalization effect that the chains fear. With the TOR/SOR strategy, the traditional studios will differentiate themselves from streaming-only services such as Netflix. In addition the TOR/SOR strategy will help the DVD business since it is only on DVDs that one can find both versions in the same place.

Streaming is not the death knell of movie chains. The TOR/SOR strategy will be the carillon of a bright future.

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