Chris Nolan Saving Movie Theaters

[James0b57]

Neil laButte has a play opening in New York now. No live actors, just recordings and eight audience members, 45 minutes.

Isn't that cinema? lol

[DLD]

Well, this is news.

https://www.yahoo.com/entertainment/...011403739.html

Warner Bros. made the stunning announcement Wednesday that Wonder Woman 1984, perhaps its biggest tentpole, will open this year on Christmas Day simultaneously in both theaters and on the new streaming service HBO Max.

More on HBO Max.

AT&T, which owns CNN parent company WarnerMedia and the fledgling streaming platform, said Thursday that the "growth and scale of HBO Max continues to show strong momentum," after adding nearly 4.5 million new customers over the past three months to reach a total of 8.6 million activations since it launched in May.

Still, most of HBO Max customers aren't completely new. The number of total HBO and HBO Max subscribers in the United States grew by fewer than 2 million in the past quarter. That means the bulk of its new customers are HBO customers changing to HBO Max -- which was already available to them. Between HBO and HBO Max, the two services combined have a total 57 million subscribers globally.

With its reach limited to the United States, the five-month old platform trails its competitors in terms of subscription numbers.

https://www.cnn.com/2020/10/22/media...ers/index.html

This looks like a transition type of a deal. Trading off box office in exchange for more subscribers. Except the subscribers may not stay for too long. A risky move.

[Paul F]

It's pretty easy to make deals like that when all the revenue is going to the same kitty. Depending upon how sales and marketing of each division is incentivized, there was likely some interesting conversations as each wanted their cut of the commissions they would normally receive on an outside deal.

In related news, Warner is taking a 10-15% smaller piece of the box office in a new revenue share deal with AMC for Wonder Woman 1984.

[DLD]

Side note - the Yahoo article happened to skip the fact that WW84 cost about $200M to shoot.

Rough math - HBO Max runs $15/mo. The current churn rate is about 40%, meaning that an average subscriber stays with a streaming service for 2 1/2 months. For argument sake, let's give it a $50 total. HBO Max will need about two million additional subscribers to cover half of the budget. Realistically, with Europe, Asia, Africa and South America also in a pandemic crisis mode, the theatrical rentals are going to be negligible. So, it's all up to the subscribers, many of whom will first wait for the film reviews.

[DLD]

It's pretty easy to make deals like that when all the revenue is going to the same kitty. Depending upon how sales and marketing of each division is incentivized, there was likely some interesting conversations as each wanted their cut of the commissions they would normally receive on an outside deal ...

Forget the in-house personnel. The above the line talent has a bunch of the incentive clauses tied into the BO. Now, they get zilch. And they're unlikely to have any offsets. On paper, this will be a "theatrical release".

Lawyers at Dewey, Cheatham and Howe are going to be working overtime.

[Paul F]

The best job in Hollywood; good times or bad, it's always a good to be a lawyer in Hollywood.

[James0b57]

The best job in Hollywood; good times or bad, it's always a good to be a lawyer in Hollywood.

Sho nuff

[Paul F]

... The above the line talent has a bunch of the incentive clauses tied into the BO. Now, they get zilch. And they're unlikely to have any offsets. ...

That is a really interesting thought. But I have to guess that profit participants also have a percentage of all 'post-theatrical' screenings. But still, if Warner had shared gross or profit points of say 20-50% of the theatrical revenue, and a much lesser participation in all other outlets, they could be saving a bundle on costs.

[DLD]

On tentpoles, the profit participation generally kicks in after a certain box office gross number is reached. It won't be reached here. The talent lawyers will argue that they never had a chance due to an insufficient number of screens. WB might argue force mejeure in response.

The best line of argument from the talent lawyers would be to count the subscription totals as hidden box office receipts but that is likely to be covered negatively - i.e., limited to a fairly small amount as the best case scenario - in the talent contracts.

Once productions switch to the hundred percent streamer ownership, the contracts will be changed to the upfront compensation only/mostly (I recall JB saying that), with a possible exception of those services that reveal their streaming hours per project. Netflix doesn't officially. Others may challenge that practice.