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Sifting Through the Fallout of Warner Bros.’s Paradigm-Shifting Announcement

Are movie theaters dead? Is HBO Max winning the streaming wars? There are plenty of questions to answer after the studio made the decision to release its 2021 slate of films concurrently in theaters and on streaming.

HBO/Warner Bros./Ringer illustration

Most things escalate quickly in 2020, the year in which all of us were forcibly acquainted with the concept of exponential growth. But perhaps nothing has escalated as quickly as WarnerMedia’s decision to change its entire approach to theatrical releases, and possibly the entire industry’s. Just two weeks ago, the conglomerate declared that Wonder Woman 1984, the biggest remaining 2020 film from Warner Bros., would be released concurrently in theaters and on streaming service HBO Max. This news alone was enough to make observers reach for their smelling salts. But on Thursday, WarnerMedia announced it would expand this strategy to its entire slate for 2021, including Denis Villeneuve’s Dune, Matrix 4, and the highly anticipated Space Jam sequel.


WarnerMedia is effectively nuking the once-sacrosanct concept of the exclusivity window, the often monthslong period between a film’s premiere and home release when it plays exclusively in theaters. Instead, the company will cut the middleman out entirely, siloing films directly from Warner Bros. to HBO Max without ceding any controls to establishments it is legally prohibited from owning outright. Right now, the pivot feels like a matter of necessity while U.S. theaters are largely closed, unsafe to attend, or both—but it will likely have far-reaching consequences well beyond the era of social distancing. While we’re processing this massive shake-up, here are five potential takeaways.

The Pandemic Isn’t Going Away, and Neither Is Its Impact on the Movies

Lest we forget, Warner Bros. is the very studio that tied itself into a pretzel trying to make Tenet the First Big Blockbuster of the Post-Lockdown Era. After months of delays and middling domestic box office sales, the strategy of trying to wait the pandemic out and/or overcome it through sheer force of will unsurprisingly didn’t work out. (Tenet made just $57 million in the U.S., representing a paltry 16 percent of its global haul—hardly the kind of returns you want on a nine-figure production budget.) Rather than repeat this debacle all over again, WarnerMedia is going all in on the opposite, more conservative tack: assuming the novel coronavirus will tangibly affect our lives for the foreseeable future and planning accordingly.

This about-face is far more grounded in objective reality—that a vaccine is unlikely to be widely distributed until mid-2021 at the earliest, and theaters will not be able to operate safely or at full capacity until there’s widespread immunity. WarnerMedia is fortunate to have a built-in backup plan, a privilege that restaurants, concert venues, and assorted small businesses conspicuously lack. But it’s resorting to Plan B with the full knowledge that Plan A simply won’t be on the table for months, and maybe even years.

Is This the End of the Movie Theater?

It’s the most obvious takeaway, but it must be said: Theaters have no leverage here, and it’s unlikely they’ll regain any in time to stop the tides from shifting even further. Theater chains have previously fought tooth and nail against any potential decrease in the all-important exclusivity window, particularly in spats with Netflix over Oscar contenders like Roma and The Irishman. Prior to the pandemic, they could threaten to simply not allow a given release on their screens, jeopardizing both earning potential and awards eligibility. Now, their heaviest bargaining chip is off the table entirely. Theaters are unable to operate in many states and under-trafficked in others, and at least one chain, Regal Cinemas, has already ceased U.S. operations. Quarantine has thus put some cracks in that iron resolve: A July pact between AMC and Universal shrunk the exclusivity window to just 17 days from theatrical to home release. But the WarnerMedia announcement eliminates the window altogether, an offer the already weakened theaters can simply take or leave.

And while WarnerMedia’s pivot is massive on its own—making “straight-to-VOD” the default, not an insult—it may be only the beginning. Just as Tenet became a crash-test dummy for other studios debating what to do with their 2020 releases, it’s likely that other companies with their own distribution mechanisms will be watching closely and weighing whether to follow WarnerMedia’s playbook. What better way to launch ViacomCBS’s rebranded Paramount Plus than with brand-new Paramount movies? Disney+ made Mulan available for an initial premium, expiring this week, but what about future tentpoles? Will Black Widow finally see the light of day?

Then there’s the biggest looming question of all: Can any of this be undone, once it’s actually safe to go back to theaters again? Are theaters going extinct? Will pent-up demand restore the landscape to what it once was? Or will theatergoing become a niche, luxury experience for cinephiles while the average fan stays on their couch? Whatever the future holds, the slippery slope toward a digital future just got a lot steeper.

Stock Up: HBO Max

After a confusing start in May, HBO Max has merged leadership with HBO proper, cultivated a solid and coherent set of originals, and let its prodigious back catalog speak for itself. But $15 is still the highest monthly subscription fee of any major streaming service, and an especially tough ask if a potential customer wasn’t already signed up for HBO. Stocking Max with a reliable stream of high-profile new releases makes that ask significantly easier—even if the Marvel-boosted Disney+ is still less than half the price.

In other words, as massive an impact as WarnerMedia’s announcement will have in the theatrical world, it may have a bigger one on the Streaming Wars. Max’s great advantage over Netflix, Apple, and Amazon is that its rivals are mostly tech companies who’ve branched out into entertainment, not entertainment companies that built their own tech product. Disney has already wielded this upper hand with its in-house release of Mulan earlier this year; now, WarnerMedia has upped the ante even further. The more WarnerMedia puts behind a paywall, the more subscribers may be willing to scale it. That’s bad news for fans of communal experiences, whether inside a multiplex or just the abstract concept of monoculture, which thrives on universal access. But the hard math just makes sense: it’s a lot easier to kick-start buzz by importing a blockbuster or three than build it from the ground up with original series. (How easy will it be to trade on blockbusters’ mass appeal when culture becomes fully atomized? That’s a problem for another decade.) Presumably, last week’s announcement of Wonder Woman 1984 yielded enough new sign-ups for Max’s parent company to feel confident about the new approach.

The Ball Is in Roku’s Court

Last month, WarnerMedia finally struck a deal with Amazon, allowing Fire TV users to at long last stream HBO Max directly from their living room sets. That left Roku as the sole remaining holdout—which is tough, because Roku still has the highest market share of any streaming device at around 46 million households, well ahead of competitors like Apple TV. Though there were some reports the two sides could be nearing a deal, Roku and WarnerMedia remain in a stalemate, unlikely to break without some major shift in the status quo.

Well, how’s this for a shift? Making Max the home of a major studio’s entire 2021 release slate may be radical enough to force Roku to cave; at the very least, the company will face renewed pressure from consumers who’d rather not rig up Dune through their Chromecast. (There’s even speculation that the Roku factor was a key motivator in WarnerMedia’s decision to pull the trigger.) While the relationship between studios and movie theaters is understandably the headline, there’s another tug-of-war between a content producer and its distribution network to keep an eye on for future developments.

Guess It’s Time to Invest in a Nicer TV?

Business concerns aside, let’s focus on the bread-and-butter issues: If we’re going to watch Matrix 4 at home, we might as well do it in 4K HD. Best Buy, eat your heart out!

A previous version of this article misstated that Regal Cinemas has declared bankruptcy. The company has not done so but only ceased U.S. operations.