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Strategy to put films on HBO Max had rocky start, exec says

(Image: WarnerMedia/AT&T/Handout, Graphic: The Desk)

AT&T’s decision to put some of its most-anticipated theatrical releases on HBO Max during the coronavirus pandemic had a rocky start that could have been handled differently, an executive in charge of content admitted on a recent podcast.

Speaking with Vox Media’s Recode podcast, AT&T WarnerMedia’s chief executive Jason Kilar said the decision to stream full-length films on HBO Max the same day those movies were released in theaters should have required more deliberation and communication with key stakeholders involved in the production of those films.

“There’s no doubt that it was bumpy back in early December of last year,” Kilar admitted. “If I had the chance to do it over again, I think it’s very fair to say that we would have taken a couple more days to see if we could have had even more conversations than we were able to have.”

With movie theaters closed and no apparent end  to the health crisis in sight, some studios — including the Walt Disney Company and Comcast’s Universal Pictures — began offering a limited amount of content directly to consumers through streaming.

Comcast distributed the next installment of its “Trolls” franchise through online rental marketplaces, including Apple’s iTunes Store and Amazon Prime Video for $20, a high price compared to titles that are offered for rent months after they debut in theaters under normal circumstances.

Disney took a similar approach, offering its live action remake of the film “Mulan” to subscribers of its $7 a month streaming service Disney Plus. The film cost $30 to access, but came with the added benefit of unlimited consumption as long as a person maintained their Disney Plus subscription. (The film is now available to stream as part of a subscription, with no extra cost involved.)

AT&T franchised the idea and took it to another level: Late last year, the company announced it would release its Christmas Day theatrical film on HBO Max without charging subscribers anything beyond the $15 a month they’d normally pay to access the service. But that’s not all — AT&T also announced it would take the same approach with every single one of its new theatrical releases in 2021.

The plans shook up the media industry in that it seemed to confirm what many believed was already the case: The future of television and movies is firmly rooted in direct-to-consumer streaming options, like the kind Disney Plus and HBO Max provide, with few other players (like movie theaters) in the middle.

Naturally, the plans worried movie theater owners. But it also concerned producers, directors and actors, many of whom traditionally rely on big box office numbers for their salaries. AT&T tried to assuage their concerns with promises that all parties would be fairly compensated despite the shift in distribution strategy, but by then the damage was already sort of done.

Earlier this month, AT&T had a bit of a redeeming moment with the release of “Godzilla vs. Kong,” a monster movie that moves away from the trend of virtue-signaling films that has enthralled Hollywood and depressed movie-goers. Godzilla vs. Kong gave people a reason to get out of their homes and back into the theaters: It is the highest-grossing film since the pandemic started and is quickly approaching $100 million in ticket sales at a time when the light at the end of the tunnel is getting brighter with every coronavirus vaccine distributed. All of this, despite the fact that the movie is freely available to watch on HBO Max.

Was that earlier speculation overblown? Maybe, but it might still be too early to tell how things are headed. Kilar, though, is wasting no opportunity to convince investors that AT&T’s strategy is a good thing for the key stakeholders in its business: Despite stumbling at the start, the company is using Godzilla vs. Kong to prove that it struck a balance between streaming and theatrical distribution.

Few things are clear about that long-term strategy, except that it will continue through the end of the year and change when AT&T goes back to releasing movies the old-fashioned way next year — at least that’s their plan, for now.

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About the Author:

Matthew Keys

Matthew Keys is a nationally-recognized, award-winning journalist who has covered the business of media, technology, radio and television for more than 11 years. He is the publisher of The Desk and contributes to Know Techie, Digital Content Next and StreamTV Insider. He previously worked for Thomson Reuters, the Walt Disney Company, McNaughton Newspapers and Tribune Broadcasting.
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