Warner Bros. CEO defends the hybrid movie launch mannequin, saying the studio is in talks with prime expertise

Last week, AT & T’s Warner Bros. announced that all films set to release in 2021 will be released on HBO Max as soon as they hit theaters. Ann Sarnoff, chairman and CEO of Warner Bros. Entertainment, defended the decision on Tuesday.

“We have been trying to find the best way forward for the last eight months since we were first suspended,” Sarnoff told CNBC’s Julia Boorstin on Squawk Alley. “We have a lot of movies that are ready and they’re on the shelves, so we thought this was the most creative and win-win situation to get them not only in theaters but also on HBO Max for 31 days at the same time . “

Like many film studios, Warner Bros. has been forced to postpone blockbuster features due to the coronavirus pandemic. Now they are looking for a way to get theatrical releases but also improve the HBO Max streaming service.

However, the company’s decision was not well received by many filmmakers or cinema chains. Warner Bros. has not consulted with the actors, agents, or directors of the 17 films that make up the 2021 film, and has not entered into distribution agreements with cinemas that have traditionally opposed simultaneous theatrical and streaming releases.

Indeed, some media reports suggest that filmmakers and cinema owners were only informed of the announcement less than two hours before it was released.

In addition, the New York Times reported that “Wonder Woman 1984” star Gal Gadot and director Patty Jenkins were each rewarded with a check for $ 10 million when Warner Bros. decided to send that film to HBO Max if it came to Christmas is coming to theaters. This was seen as minor to other talents who had worked with the company.

“It’s a unilateral decision that the studio made,” Christopher Nolan, a notable filmmaker and contributor to Warner Bros., told the Associated Press on Monday. “You didn’t even tell anyone involved. You have these great filmmakers who have worked passionately and diligently for years on projects that are supposed to be feature films with fantastic movie stars. And everyone has now been told it is a loss leader for a boy Streaming service. “

Nolan is known to pressure Warner Bros. to release his movie “Tenet” on the big screen instead of offering it for purchase as a premium video upon request. As of August, Tenet has had domestic sales of $ 57.6 million and $ 302.1 million from international markets.

“We work through the system with our talent and their agents,” said Sarnoff. “I think the more they see how well they’re getting paid, the more we find that people understand the economy. And that’s unprecedented. So it’s always a bit difficult to work something new through for the first time.”

Sarnoff did not disclose details of financial dealings with parties, but said filmmakers and talent “have access to some additional economic aspects of HBO Max.”

“We are in the process of having a lot of conversations with the talent, agents and exhibitors to see how this can work and be good for everyone,” she said.

Currently, that same-day movie release strategy in theaters and on HBO Max only appears to apply for 2021. Sarnoff called it a “workaround” but said the company needs to see how 2022 plays out before making any decisions about future sales models.

Jason Kilar, CEO of WarnerMedia, made similar comments in an interview with CNBC last week.

“Everyone should take a breather,” said Kilar. “Let’s play for the next six, eight, ten months. And then let’s check in again.”

AT&T CEO John Stankey said earlier Tuesday that the streaming service had added subscribers even before the new content hit the service. HBO Max has approximately 12.6 million subscribers, up from 8.6 million activated accounts at the end of the third quarter.

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