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Hollywood moment “ We’re no longer in Kansas ”

LOS ANGELES – In explaining why WarnerMedia decided to release the highly anticipated big budget “Wonder Woman 1984” simultaneously in theaters and on the HBO Max streaming service on Christmas Day, the CEO of the company, Jason kilar, relied on the classic Hollywood movie “The Wizard of Oz”.

“We are no longer in Kansas” Mr. Kilar said in a report.

The success of a film would no longer, he said, be judged solely by the box office revenue it generates in theaters. Instead, it would be measured in part by how many HBO Max subscribers it is able to attract. And just as Dorothy enters the Technicolor world of Oz, Hollywood feels like it’s entering a new era – one with streaming at the center.

The holiday season usually means theaters are teeming with blockbusters, hopes and moviegoers. Not this year. With many theaters closed due to the coronavirus and those that are open struggling to attract the public, many studios have either pushed back the release dates of major films to 2021 or created a hybrid model in which still-operating theaters can show new releases while also being made available via streaming or on-demand services. .

“Wonder Woman 1984” is the most prominent example to date to be released using the hybrid model. But when it appears on HBO Max on Christmas Day, it will join Pixar’s “Soul” and DreamWorks Animation’s “The Croods: A New Age” as flagship films of the holiday season that are set to be box office favorites. but which are now likely to be seen primarily in people’s living rooms.

For companies that have their own streaming platforms, like WarnerMedia and Disney, releasing films in this way is now seen as an opportunity to generate subscriptions. Both companies said the measures would only last during the pandemic, but they also recently reorganized their executive responsibilities to make it clear that streaming is the new priority. (Disney, for example, now has a central division that decides how its content is distributed, a shift in strategy that puts Disney + at the top of the studio’s priorities.) And audiences may not want the studios to come back to the old way of posting. films that gave cinemas 90 days of exclusive rights.

“There will be a new normal,” said Jason Squire, editor of “The Movie Business Book” and professor at the School of Cinematic Arts at the University of Southern California. “Over the years there has been a lot of tension between theatrical exhibition and studio distribution but not a lot of change. The pandemic has reignited change. “

Not long ago, Hollywood saw streaming as an unwanted insurgency. Several years ago, when Netflix started competing in earnest for the Oscars, traditionalists scoffed at the idea of ​​awarding prestigious awards to films that had only nominated theatrically. (This year, bowing to the reality of the pandemic, the cinema academy announced that the films could skip a theatrical release and be eligible for an Oscar.)

However, studios have long wanted to shorten the exclusive window given to theaters. Theater chains have been lobbying aggressively against this, fearing that people will be reluctant to buy tickets to a movie they may soon see at home.

The sanctity of the theatrical release was zealously guarded even after the pandemic lockdowns began. In April, Universal Pictures had a successful output of video on demand for “Trolls World Tour” and said he would make more movies available this way without an exclusive theatrical run. Adam Aron, chief executive of AMC, the world’s largest theater operator, called the move “categorically unacceptable” and said his company would no longer book Universal films.

In July, however, the two companies signed a multi-year agreement whereby Universal films would air in AMC theaters for at least 17 days before becoming available in homes via premium video on demand, or PVOD in the. language of industry. Last week Universal signed similar deals with Cinemark, the third-largest theater chain in North America, and Cineplex, Canada’s largest exhibitor, adding the provision that for films opening at $ 50 million in ticket sales, the exclusive cinematic window will extend to 31 days.

The shortened window means the studio can theoretically spend less on marketing than is typically required when theatrical and home video debuts are three months apart. And studios typically keep 80% of premium on-demand revenue, while ticket sales for theatrical releases are split roughly 50-50 between studios and theater companies.

“Our hope is that by bringing PVOD to market, we improve the profitability of the studio and as a result there will be more films hitting theaters,” said Peter Levinsohn, vice president and director of distribution. for Universal. . “The goal here is to be more efficient in our marketing, to keep movies more profitable and to prevent movies from being sold” to subscription services like Netflix or Amazon.

Warner Bros. has chosen to defend the proven theatrical model, hoping that “Tenet” by Christopher Nolan would bring people back to theaters this summer following the passage of the first wave of the virus and 68% of American theaters were able to reopen. But with theaters still closed in the two biggest markets, New York and Los Angeles, the film only grossed $ 56 million over its entire U.S. tour. It was a far from the previous theatrical achievements of Mr. Nolan, like “Interstellar,” which grossed $ 188 million domestically, and a stern warning to other distributors that the traditional way of releasing movies was not going to work in 2020.

Today, the theatrical climate is darker. Half of theaters in the United States are closed, and cases of the virus are on the rise across the country. Regal Cinemas, the second largest chain in the United States, has closed all of its theaters citing a lack of films and audiences. While there is no federal grant program available for theaters soon, John Fithian, chief executive of the national professional association of theaters, said he expects 70% of them either closed permanently or declared bankruptcy early next year.

Big budget shows have seen audiences flock to theaters, even through waves of home entertainment competition, from VCRs to streaming. This has benefited both theater channels and studios, and that’s why few people expect movies the size of “Wonder Woman 1984” to be streamed directly after the pandemic.

Moving away from cinemas would affect the types of films made. In short, if there is less money to be raised at the box office – due to a reduction in the number of theaters or a permanent change in consumer behavior – studios would be forced to make less. big budget movies. For those who think Hollywood has become too dependent on superhero movies, this may actually be good news. The thousands of people employed by each of these films would undoubtedly have a different perspective.

But others aren’t sure the change will be so drastic, underscoring the power of the theatrical experience.

Charles Roven, a producer of “Wonder Woman 1984,” said in an interview that he was convinced its release was not a sign of a new long-term strategy. “There is no question that they want to make HBO Max a success and they should,” he said of Warner Bros. “But to say that this particular thing is what’s going to happen in the future, that would be a leap.”

Disney chose to bypass US theaters altogether and release the $ 200million ‘Mulan’ on Disney + in September, charging subscribers $ 30 on top of their monthly subscription to watch the live-action adaptation of the animated film. . Sales were affected by an outcry on a filming location in China, but Bob Chapek, chief executive of Disney, told analysts earlier this month that he had seen “enough very positive results before the controversy began to know that we have something thing here in terms of a top-notch access strategy ”. Disney plans to send several more big budget movies to Disney +.

For studios without their own streaming services, the math is a little different. While many have chosen to postpone their theatrical releases until 2021, others have sold films to collect money. Paramount has unloaded “The Trial of the Chicago 7” on Netflix and “Coming to America 2” on Amazon, for example. In a sense, Netflix is ​​currently one of the few studios still shipping product to struggling channels. By the end of the year, Netflix will be releasing eight of its films in limited series theaters ahead of their appearance on the service, including potential Oscar contenders like “My Rainey’s Black Bottom” and David Fincher. “Faded away.”

Universal is the other big studio that still supplies movies to theaters, supported by its new PVOD agreements with theaters that allow it to distribute the two big movies as the sequel to “Croods” and small films of its independent subsidiary, Focus Features.

That’s good news for Bobbie Bagby Ford, executive vice president of B&B Theaters, the nation’s sixth-largest theater chain based in Liberty, Missouri.

Ms Bagby Ford said that before the pandemic, her company would not have agreed to Warner’s plan to release “Wonder Woman 1984” in theaters and on HBO Max at the same time. Now, however, any opportunity to show a movie that could do real business would be a relief for a company avoiding bankruptcy.

“Our Midwestern moviegoers are very happy to return, and they’ve been wondering about ‘Wonder Woman’ for months, months and months,” said Ms. Bagby Ford.

Mr Kilar, the head of WarnerMedia, said in his statement that the pandemic was the main reason for the release of “Wonder Woman 1984” in theaters and streaming. But he also noted how the move put control of how the film is viewed firmly in the hands of audiences.

“Just over four million fans in the United States enjoyed the first ‘Wonder Woman’ movie the day it opened in 2017,” Mr. Kilar wrote. “Is there a way that could happen again this Christmas with ‘Wonder Woman 1984’ between theaters and HBO Max?” We’re excited to find out and are doing everything in our power to bring the power of choice to fans.

If it works, things are unlikely to be the same.

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