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Warner Media and HBO Max Shake Up the Film Industry

December 17, 2020

Greg Sigel

VP – Partnerships

The news that Warner Media will make all 17 of its movies planned for 2021 available on its HBO Max video streaming platform at the same time as their cinema release underscores how the pandemic has upended cinema. But it also reflects changes in video content consumption habits which may persist post-pandemic, as more people get used to watching their favourite films and TV shows whenever and wherever they want on a range of different devices, including smartphones.

Film studios have been rethinking their distribution strategies to cope with Coronavirus lockdown restrictions since the beginning of 2020, albeit on a much smaller, more fragmented scale than Warner Media and HBO Max. The global cinema industry is set to lose US$32 billion in 2020 due to the COVID-19 pandemic a 71.5% reduction in box office revenue compared to 2019, according to Omdia’s latest ‘Movie Windows: Adapting for the future’ report. Since the pandemic first took hold across the globe in February, rival subscription video on demand (SVoD) providers have been busy snapping up new movies. Studios needed to offload these films to recoup at least part of their investment, after cinemas across the world either closed or reduced their capacity to meet social distancing rules.

Netflix brought distribution rights for Paramount Pictures’ “The Trial of the Chicago Seven” too in the autumn for example, after having already picked up “Enola Holmes” from Legendary Entertainment and “The Lovebirds” in the spring. It also finalised a deal to purchase rights to Disney’s “The Woman in the Window” in August, a deal that is all the more interesting given that Disney has now a rapidly growing Disney+. At the time, the thriller was perhaps not considered a good fit for Disney+, a service characterised by more family-friendly content, especially for young children. 

Sony Pictures also sold two movies, including Seth Rogen’s “An American Pickle”, to HBO Max back in April. After selling the Tom Hanks film “Greyhound” to Apple for US$70m in May, the title subsequently ended up breaking viewership records for the AppleTV+ video streaming service.

Universal too released titles including “The Hunt”, “The Invisible Man”, “Emma and Trolls World Tour” straight to multiple VoD services either ahead of or in tandem with their cinema releases in numerous markets. Those include Amazon Prime Video, Comcast Xfinity, Apple TV+ and Google Play, with a proportion of the revenue derived from rental sales going straight to Universal. Amazon Prime Video also acquired exclusive distribution rights for STXfilms’ “My Spy” for the US and certain European countries, even though the title had already begun rolling out to cinemas in others.

Coronavirus stopgap or long term trend?

Movie studios are sitting on a backlog of other new films to release in 2021 due to postponements in shootings, combined with ongoing ambiguity about box office takings. And the question now is whether the changes in the way that new films are released and distributed represent temporary measures designed to offset the fall in income from depressed cinema ticket sales or signal a longer-term, or even permanent trend as the pandemic lingers on.

Investors appear to think it could be the latter, with the share value of cinema chains including iMax and Cinemark falling sharply on the Warner Media/HBO Max announcement. But Netflix co-CEO Ted Sarandos has indicated it at least sees the opportunity as a short term while studios work out how best to bring their new content to audiences post-pandemic.

Should video streaming platforms ultimately become the first destination for new film releases (or at least those the studios are not confident will do well in cinemas)?  SVoD providers are likely to see further growth in subscriber bases already swelled by the newly housebound workers and students across the globe.

Netflix added 26m subscribers in the first six months of 2020 to total almost 200m customers for example, while Disney+ grew its subscriber base to 74m by early October, less than a year since launch. Making all of Warner Media’s 2021 movies available via streaming is also expected to help HBO Max entice new subscribers (read more detail in my recent blog HBO Max Paves The Way for SVOD Market Shake-Up here).

The recent original from Netflix, “The Queen’s Gambit” has interestingly driven an unprecedented surge in the interest in chess with some of the 62m who have watched it flocking chess.com to play the game online. 

Lower costs and simple billing

The convenience of SVoD content which can be accessed and viewed anywhere, at any time, is a major draw for consumers in any situation, irrespective of ongoing lockdown restrictions. People like being able to watch films and TV shows on big-screens at home, with smart televisions and home audio becoming affordable. 

Compared to the cost of visiting cinemas and paying for tickets streaming video services also look like good consumer value, with subscription fees for unlimited content consumption ranging from US$8-US$13 a month, and one-off movie downloads or time-limited access offers typically priced around US$3-5.

Flexible billing arrangements, which enable fast registration and access, are an additional draw for many, and this ad-hoc buying of single movies rather than subscriptions may also become a good use case for direct carrier billing, especially among the younger demographic. 

That is exactly the demographic that Warner Media and HBO Max are hoping to target with their new movie releases in 2021. The service is part of AT&T, which allows subscribers to fund streaming video purchases and subscriptions through their phone bills. A partnership with another US telco, Verizon, which sees HBO Max distribute access to its content through Verizon’s Fios TV and Fios Internet packages, also offers DCB as a payment option.

The true extent of consumers’ appetite for viewing new films via their video streaming subscriptions, rather than in cinemas, won’t be evident until after pandemic-related restrictions are behind us. But there is no doubt that OTT platforms will attract millions of new subscribers in the meantime, and many of those, having cut the cord from linear television will remain.


[i] Theater Stocks Plunge After Warner Bros. Will Release All 2021 Films on HBO Max, Cinemas Simultaneously, Variety, 3rd December 2020/

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