Warner Bros.’ Recommitment To Theatres Hints At Return To Normalcy

David Zaslav made a bunch of news yesterday during the press rounds for Warner Bros. Discovery’s annual television upfront presentation. He got a profile n the Wall Street Journal where he frankly came off as a “money > relationships” executive. He openly criticized the decision to spend $33 million on Clint Eastwood’s relatively non-commercial Cry Macho and his actions over the first month, almost immediately pulling the plug on CNN+ and canceling an in-development HBO Max movie based on DC’s The Wonder Twins, seems to at the very least paint him as someone not willing to give in to sunk cost fallacy thinking. However, he also committed to the notion of Warner Bros. releasing 20-25 movies in theaters per year while downplaying HBO Max originals.

Zaslav seems to understand what I’ve frankly been saying for two years, namely that streaming is not an “all eggs in one basket” business and that putting a film in theaters increases its eventual streaming viewership. With Sony’s Tom Rothman singing the praises of old-school theatrical windows (the copious films sent to streamers over the last two years notwithstanding) and Paramount having their best theatrical year in a generation (concurrently with Paramount+ rising in terms of pop culture awareness), even Netflix is on the verge of committing to conventional pre-streaming theatrical engagements. I’ve been saying since last May that theaters can be an asset to those with a vested interest in the streaming marketplace, a way to separate the metaphorical wheat from the chaff.

When Zack Snyder’s damn good Army of the Dead gets a week in theaters, with all the free publicity that entails, while Joe Wright’s bought-from-Fox Woman in the Window gets quietly tossed onto the platform, that’s a qualitative judgment. Ten years ago, putting your theatrical movie in IMAX was a way of saying you meant business. Today, putting your streaming-centric title in wide theatrical release even for a month could arguably do likewise. Bob Chapek’s Walt Disney seems to be among the holdouts (along with Amazon, which to be fair got burned in summer 2019 with a few high-profile theatricals like Late Night that bombed), with their theatrical slate comprised almost entirely of MCU movies and animated titles (presuming Turning Red is the last Pixar flick to go straight-to-streaming).

To be fair, many of Hulu’s seven summer releases, from The Valet (a Samara Weaving/Eugenio Derbez rom-com) tomorrow to Prey (Dan Trachtenberg and Patrick Aison’s Comanches versus Predator prequel) on August 5, were intended for Hulu and/or the kind of “nobody sees this in theaters” flick (like Emma Thompson’s Good Luck to You, Leo Grande) that has faltered commercially specifically because of streaming competition. Still, Encanto, which got a theatrical release, is pulling higher Disney+ viewership than Turning Red which did not. We’ll see if Lightyear follows suit. The industry at large may be understanding, at least in the long run, that at least some of the increases in streaming subscriptions and streaming viewership were due to 1.5 years during which nobody could safely leave the house.

Theatrical and streaming can supplement and complement each other rather than act as zero-sum enemies. The Batman earned $369 million domestic and then nabbed allegedly huge HBO Max viewership, while Spider-Man: No Way Home got a conventional 88-day window and then still set records on its electronic-sell-through (“priced to buy” VOD) debut. Sing 2 (from Comcast which is the only biggie with a normal-sized summer movie slate) was on PVOD for most of its theatrical lifespan and still legged to $163 million domestic (more than The Secret Life of Pets 2 in summer 2019) and $407 million worldwide (not far off from Pets 2’s $430 million cume). Even Free Guy pulled solid HBO Max/Disney+ viewership after a shockingly successful $122 million domestic/$332 million global theatrical run.

Again, this isn’t “theaters good and streaming bad,” although I do believe that now even streaming comedies and niche flicks risk being buried by IP-specific franchises. If you subscribe to every major service and every major service has their big IPs (Marvel for Disney+, DC for HBO Max, Star Trek and Halo for Paramount+, etc.), then you once again can subsist entirely on a diet of prepackaged, nostalgia-tinged IP shows. However, as we’ve seen via momentary popularity for older third-party titles on Netflix (the latest forgotten biggie being U.S. Marshals) and momentary interest in The Last Duel and Death on the Nile on HBO Max and Hulu, the potential for streaming viewership creates a fail-safe for less surefire theatrical releases, hence Sony’s big-bucks first-pay window deal with Netflix.

Studios should remember both the sheer revenue generated by a successful theatrical release and how a successful run can help rather than hinder their streaming-specific goals. This brings us back to Warner Bros. Discovery. We don’t know if Zaslov is genuine in his reported intent to insist/gently prod WBD to offer up 20-25 theatrical movies each year, and we don’t know to what extent his alleged preference for data over gut instinct is A) overblown and B) likely to have a detrimental effect on what gets green-lit. However, Denzel Washington’s The Little Things was a strong performer on HBO Max, and Mortal Kombat pulled year-high viewership for the streamer to the extent that it got a sequel despite grossing $85 million worldwide on a $55 million budget.

Would those titles have performed as well if they were streaming-only titles? I’d argue, and the data implies that the answer is no, just as more folks watched Mulan than Lady and the Tramp on Disney+. There may be value in some “just a movie” releases as glorified theatrical loss leaders for the sake of eventual streaming “rediscovery.” Or, at the very least, a well-liked theatrical won’t pull less streaming viewership by virtue of being in theaters first. This may just mean that the new boss noticed that big theatrical flicks like The Batman play better on streaming than Kimi. However, Warner Bros. cannot make enough DC flicks, Conjuring spin-offs, Wizarding World movies, MonsterVerse films and Looney Tunes flicks to fill up a 20-25-movie slate.

By default, we’re going to have some “just a movie” biggies (Ready Player One) or one-and-done tentpoles that may or may not spawn franchises (The Meg, Ocean’s Eight) that may or may not win Oscars (A Star Is Born). One reason I’ve defended WB over the years is that A) they shouldn’t be defined entirely by the DC Comics movies (canceling Wonder Twins means they aren’t just randomly producing DC flicks for the sake of DC) and B) they did release/will release a slew of varied theatrical movies on an annual basis. A 25-movie slate means, by default, the Dream Factory cannot go 100% tentpole. Hopefully, their rivals, including Netflix (currently considering a 45-day pre-streaming theatrical run for Rian Johnson’s Knives Out 2) follow suit.