Hollywood is raging over Warner Bros.' HBO Max plan. But one producer whose movie was impacted gave us the counter argument.
- Warner Bros.' decision to debut its 2021 movies on HBO Max the same day they arrive in cinemas has sparked backlash from all corners of the movie industry, from the director Christopher Nolan to AMC Theatres.
- But a producer Business Insider spoke with, whose movie was impacted and wished to remain anonymous since negotiations with Warner Bros. have yet to begin, isn't fearing for the future of Hollywood.
- "The box office will already be muted in the pandemic," he said. "They're offering another way to make money. Maybe talent doesn't agree with that number, but that's what negotiations are for."
- The producer opened up about Warner Bros.' decision to not consult talent before the announcement and about WarnerMedia CEO Jason Kilar, who has reshaped the company this year.
- Are you a current or former WarnerMedia employee with more to share? Contact the author at [email protected] or DM him on Twitter @TravClark2.
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Hollywood was stunned last week when Warner Bros. announced that all 17 of its 2021 movies would debut on HBO Max simultaneously with theaters in the US as the coronavirus continues to devastate the theatrical industry.
The nearly 100-year-old studio and its parent company, WarnerMedia, have since come under fire from all corners of the movie industry, from the director Christopher Nolan, whose movie "Tenet" Warner Bros. released in September, to AMC, the largest theater chain in the world, which released a scathing statement following the announcement.
News outlets like The New York Times and The Hollywood Reporter (and Business Insider) have reported that talent is fuming about not being consulted ahead of time, since many filmmakers and actors agree to "backend" payments based on a portion of the movie's box office.
But not everyone in Hollywood is upset with the unprecedented plan.
Business Insider spoke with a producer whose movie is impacted and who wished to remain anonymous since negotiations with Warner Bros. have yet to begin. He said he understood why WarnerMedia was taking such a drastic step.
"I understand the uncertainty of whether theaters will be open [in 2021]," the producer said. "Everyone is reevaluating their business plans. They have to release their product. They have to get these movies out."
It's a unique perspective compared to some of the high-profile public condemnation toward the plan, such as from Nolan, who called Max "the worst streaming service" and said the decision "makes no economic sense."
The producer wasn't offended by Warner Bros.' hasty announcement. HBO Max will pay Warner Bros. a licensing fee for the 31 days that the movies will be available on Max before playing exclusively in theaters, which WarnerMedia CEO Jason Kilar told Vox will play a part in compensating talent.
"The only thing left to do is negotiate what that means," the producer said. "I don't think that would have been done quickly and every deal is different. I can understand them wanting to make this announcement and then [negotiate]."
He added: "The box office will already be muted in the pandemic. They're offering another way to make money. Maybe talent doesn't agree with that number, but that's what negotiations are for. Warner Bros. could have just as easily said, 'We're releasing your movie when there's nine theaters open and that's it.'"
Warner Bros. did not respond to a request for comment on negotiations with talent.
The plan is bound to have major ramifications for Hollywood, though, even after the pandemic.
Studios were already shattering the traditional theatrical window before Warner Bros.' announcement. Universal Pictures, for instance, struck deals with major theater chains, including AMC, to shorten the window from the typical 75 days to in most cases just 17, at which point a movie can premiere on digital-rental platforms.
The Warner Bros./HBO Max deal is the most radical step yet. But the producer said that Hollywood has made "doom-and-gloom proclamations" about the movie industry before that never happened. It has just evolved, and he said this was a long time coming, thanks in large part to Netflix and the rise of streaming.
"There's been so many instances where tech has made a seismic shift in our business and we predicted the end but it actually got better," he said. "The movie business is more robust than ever. Think about how much content there is."
He said that if a company like Apple, which launched its streaming service Apple TV Plus in November, announced that it was spending billions to boost its streamer, "nobody would be saying the theater business is over."
"But because Warner Bros. is a traditional studio, everyone is saying 'uh-oh,'" the producer said. "But they didn't really have much choice."
He added that some of the movies don't have release dates yet and now the studio can date them without worrying about whether local governments will shut down theaters. Warner Bros. can plan marketing spending now without it potentially being wasted, he said.
Warner Bros.' plan is another step in WarnerMedia's major shakeup this year under Kilar, the new CEO, who has streamlined the company to focus on its streaming business, namely the flagship product Max. It's resulted in hundreds of layoffs.
The producer said that Kilar's Hollywood "outsider" status and reputation as a "tech guy" (he is a founding CEO of Hulu) has likely added to the harsh rhetoric about Warner Bros.' announcement throughout the industry. But the producer thinks Kilar might be the right person to shake things up during this transformative period for the industry.
"Maybe Kilar is the guy for this transition," the producer said. "They couldn't bring in an old-school guy for this."
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