‘It’s very, very, very, very messy’: Why Warner Bros. faces major Hollywood backlash over its plan to release its 2021 movies on HBO Max the same day they hit theaters

Dune Warner Bros

  • Warner Bros. announced last week that it will debut all of its 2021 movies on HBO Max the same day they arrive in theaters.
  • The filmmaker Christopher Nolan, a longtime partner of Warner Bros., called HBO Max “the worst streaming service” in a scathing statement on Monday.
  • The New York Times reported that WarnerMedia did not alert major talent agencies to the plan until 90 minutes before the announcement was made, leaving actors and filmmakers wondering how they will be compensated to make up for backend deals determined by box office.
  • The production company Legendary, which partnered with Warner Bros. on two of the movies (“Godzilla vs Kong” and “Dune”), was not made aware of the plan beforehand and will likely file a legal challenge, according to The Hollywood Reporter.
  • Are you a current or former WarnerMedia employee with more to share? Contact the author at tclark@businessinsider.com or DM him on Twitter @TravClark2. 
  • Visit Business Insider’s homepage for more stories.

Warner Bros. announced last week that it will release all 17 of its 2021 movies on HBO Max the same day as in theaters in the US, in a move that reflects parent company WarnerMedia’s aggressive focus on its streaming business as the pandemic wreaks havoc on the theatrical industry.

The announcement sent shockwaves through Hollywood.

While movie studios have experimented with alternatives to theaters amid the pandemic, like premium video-on-demand and streaming, Warner Bros.’ plan is the most disruptive one yet.

It didn’t take long for the backlash to start.

Christopher Nolan, the director behind “Tenet” – which Warner Bros. released to theaters in September to underwhelming box office in the US – criticized the plan in an interview with Entertainment Tonight on Monday, particularly the way Warner Bros. reportedly went about it, calling the situation “very, very, very, very messy” and a “real bait-and-switch.”

READ MORE: In a major blow to US theaters, Warner Bros. announces that all of its movies in 2021 will debut on HBO Max the same day they arrive in cinemas

The New York Times’ Brooks Barnes and Nicole Sperling reported on Monday that WarnerMedia didn’t consult with talent before making the decision. According to The Times, the company “kept the major agencies and talent management companies in the dark until roughly 90 minutes before issuing a news release. Even some Warner Bros. executives had little warning.”

“Yeah, it’s sort of not how you treat filmmakers and stars and people who, these guys have given a lot for these projects,” Nolan told ET. “They deserved to be consulted and spoken to about what was going to happen to their work.”

Warner Bros. did not immediately respond to a request for comment for this story, but declined to comment for The Times.

Nolan, an outspoken defender of movie theaters, issued an even more scathing statement to The Hollywood Reporter calling Max “the worst streaming service.”

Here’s the statement:

“Some of our industry’s biggest filmmakers and most important movie stars went to bed the night before thinking they were working for the greatest movie studio and woke up to find out they were working for the worst streaming service. Warner Bros. had an incredible machine for getting a filmmaker’s work out everywhere, both in theaters and in the home, and they are dismantling it as we speak. They don’t even understand what they’re losing. Their decision makes no economic sense, and even the most casual Wall Street investor can see the difference between disruption and dysfunction.”

Nolan’s comments are a notable separation from Warner Bros., as the filmmaker has established a longrunning partnership with the studio that includes “Tenet,” the “Dark Knight” trilogy, and “Inception.”

the suicide squad
Idris Elba in “The Suicide Squad”

The talent is angry

The reason some talent in the industry are angry about Warner Bros.’ plan, and its failure to consult with them about it, is because many actors and filmmakers strike “backend” deals that rely on box-office returns.

Some talent will take a smaller upfront payment in exchange for backend pay that would be a percentage of a movie’s box office if they think the movie will be a hit. 

In this instance, Warner Bros. plans on releasing to HBO Max tentpole films that under normal circumstances could have been box-office blockbusters, such as “The Suicide Squad” and “Dune.”

READ MORE: HBO Max’s chief breaks down the seismic decision to stream all 2021 Warner Bros. movies as they hit theaters and responds to speculation about 2022 and beyond

According to THR, “The Suicide Squad” director James Gunn was “not pleased” when Warner Bros. offered a “lackluster formula” for compensating him and other talent, and that was only after it made the announcement.

Warner Bros. has tried to sweeten the deal for some. “Wonder Woman 1984” star Gal Gadot and director Patty Jenkins are both getting more than $10 million, according to The Times. The movie will arrive on Max and in theaters on December 25.

But this payday seems to have led to tensions with other stars. Representatives for actors like Margot Robbie (“The Sucide Squad”), Keanu Reeves (“The Matrix 4”), and Will Smith (“King Richard”) felt their clients weren’t being treated fairly by comparison, according to The Times.

One thing to keep in mind, however, is that the movies will stream on HBO Max for one month before leaving and playing exclusively in US theaters. They will also play as intended in international theaters outside the US, where Max isn’t available. (While “Tenet” struggled domestically, it earned $350 million worldwide, suggesting some international markets are recovering from the pandemic as it continues to rage in the US.)

Max will pay Warner Bros. a 31-day licensing fee for the movies equal to what the studio’s portion of ticket sales would be in the US. WarnerMedia CEO Jason Kilar told Vox’s Peter Kafka that that will play a part in compensating talent.

But actors and filmmakers aren’t the only ones upset with Warner Bros.’ plan.

WarnerMedia reportedly blocked an offer from Netflix for a major tentpole

Warner Bros. has also caught the ire of the production company Legendary, which financed 75% of “Godzilla vs Kong,” according to THR and The Times.

Both outlets reported that Netflix had made a sizable offer to Legendary for the streaming rights to the monster crossover movie, but WarnerMedia blocked it (THR reported that the offer was “something north of $225 million” while The Times reported it was “at least $250 million”).

Now the production company, which also partnered with Warner Bros. on “Dune,” is likely to file a legal challenge, according to THR.

Both “Godzilla vs Kong” and “Dune” cost more than $150 million to produce.

godzilla king of the monsters
Last year’s “Godzilla: King of the Monsters”

Exhibitors aren’t happy, either

Movie-theater chains are also upset.

AMC, the largest theater chain in the world, issued a rebuke of Warner Bros.’ plan on Thursday, saying: “Clearly, WarnerMedia intends to sacrifice a considerable portion of the profitability of its movie studio, and that of its partners and filmmakers, to subsidize its HBO Max startup. As for AMC, we will do all in our power to ensure that Warner does not do so at our expense.”

AMC’s stock was down 16% following the announcement.

Cineworld, the owner of Regal, was less scathing, saying in a statement that it expects Warner Bros. to “reach an agreement about the proper window and terms that will work for both sides.”

READ MORE: WarnerMedia’s Jason Kilar provokes wrath of Hollywood and cinema owners with move to shift movies to streaming

A senior exhibition source told Business Insider’s Claire Atkinson that WarnerMedia’s plan is “a lousy move in an ecosystem where everybody needs each other.”

WarnerMedia’s EVP of direct-to-consumer, Andy Forssell, feels differently. In an interview with Business Insider on Thursday following the news, he said that the plan “supports the ecosystem.”

“It’s a very stable thing and there’s a lot of value in that,” he said. “Predictability is at a premium right now.”

WarnerMedia clearly expects to capitalize on that “stability” to boost Max, which has struggled to convert customers who already subscribe to HBO amid brand confusion and a lack of support on Roku, one of the biggest streaming distributors.

John Stankey, the CEO of WarnerMedia’s corporate parent AT&T, said on Tuesday that Max had 12.6 million activated users, up from 8.6 million in September.

For comparison, Disney Plus has more than 73 million subscribers since launching in November. NBCUniversal’s Peacock had 22 million sign-ups by October after fully launching in July, though it’s unknown how many are paid subscribers.

A potential preview of how Max’s 2021 plan could fare will be the debut of “Wonder Woman 1984” on December 25, when it will be available on Max and in theaters.

Are you a current or former WarnerMedia employee with more to share? Contact the author at tclark@businessinsider.com or DM him on Twitter @TravClark2. 

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