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The Streaming Wars: Warner Bros. prioritizes HBO Max over cinemas will change the movie business forever

Warner Bros. Entertainment last week made waves after it announced all its movies slated for 2021, will now be released on subscription streaming service HBO Max at the same time as there are released in a movie theatre. This sent shock waves into the movie industry as traditionally films would first be released in cinemas for almost 5 months (known as the theatrical window), and then be moved to streaming or video on demand.

The move to prioritize streaming platforms is the direct result of the COVID-19 pandemic and the lack of confidence movie studios have in theatrical releases at the moment. The pandemic has made movie studio scared that they won’t get the same returns for their blockbuster movies as they did pre-pandemic. Blockbuster movies are the biggest source of revenue for all movie studios but are costly to produce hence the fear.

Blockbusters allow for smaller budget movies to be made, with both types of movies feeding into theatre chains, they are also the biggest source of revenue for movie theatres seen as the lifeblood which keeps the movie industry turning. Warner Bros. announcement has put cinema chains around the world in a lurch, as the pandemic and lack of blockbuster movie releases this year has pushed many movie theatres to the brink of financial ruin.

Warner Bros. Studio Logo Image by spangle84 from Pixabay 

The change in movie release procedure was always predicted to happen at some point in the future, but the coronavirus pandemic has only served to make the future today. The cinema industry for the past 15 years has fallen from being the cornerstone of the movie business after the internet created avenues for wide-scale piracy, which then led to the current Netflix business model of paid subscription streaming services.

Warner Bros. and HBO Max are both subsidiaries of parent company WarnerMedia, which is owned by telecommunication company AT&T. HBO Max launched 5 months ago (27 May 2020) and has been competing with the likes of Netflix, Disney+, Amazon’s Prime Video and other video streaming platforms for market share. HBO Max is only operating in the United States, while its competitor Netflix and Disney+ have already branched out globally.

Disney+, last month (12 November 2019) announced that they had reached the milestone of 73.7 million paid subscribers after only one year in operation, making them the 5th largest streaming service in the world after Netflix (195 million paid subscribers), Amazon (150 million subscribers), Tencent (120 million subscribers), Baidu (118.9 million subscribers). The battle for paid subscriptions and streaming market share has been dubbed the Streaming Wars by pundits.

Netflix logo on TV Image by Tumisu from Pixabay 

As streaming becomes more prevalent the movie theatres and cinema chains will lose relevancy and become more niche to stay alive. Cinemas will also have to come up with creative ways to lure audiences back to theatres, with the pandemic and the convenience of streaming platforms easily keeping paying customers away. It is widely predicted that other movie studios will follow Warner Bros. footsteps and move their movies to streaming as well.

All the other major movie studios have been gearing up to respond to Netflix dominance in the streaming market. NBCUniversal launched their streaming service Peacock on 15 April 2020 (with content like 30 Rock, Law & Order and Chicago PD). Last year, Viacom merged with CBS forming ViacomCBS, to create their streaming service Paramount+, not yet to be launched, but will house both of their content (MTV, BET, Comedy Central, Mission: Impossible, Transformers, Star Trek etc.).

From a South African standpoint, the Streaming Wars also leaves SA’s cinema chains Ster-Kineko and NuMetro in uncertain times. They too are highly dependent on movie blockbusters to bring in crowds and high revenues for their business to survive, they have also suffered the consequences of COVID-19 restrictions using to drive-in theatres as a temporary fix to bring in some revenue.

Streaming platforms like Netflix and ShowMax have also grown quite popular in South Africa taking market share from local TV networks and movie cinemas. Streaming is definitely the future of entertainment consumption, and movie theatres around the world will have to evolve with the market and technology in order to stay relevant and survive.

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