Saturday, November 21, 2020

To the (HBO) Max


Wonder Woman 1984 poster.jpg

COVID-19 may have killed the movie theater experience.  And cable TV may not be far behind

There will always be movie theaters.  And I am not as pessimistic as others, but it is clearly possible that a seismic shift in premium movies is coming.

When COVID hit us in March, big tent-pole movies were postponed until the lockdowns ended.  Then few months ago, Warner Bros. released Tenet into the theaters, trying to see if things had returned to normal.

They hadn't.

I remember going to the movie and there were only 4 other people in the theater.  Shortly after, a number of studios, including Warner Bros. postponed even more films, some until next year.

But there were some that decided to forgo the theater entirely and put their premium movies on their streaming services.  Disney put movies originally slated for theatrical release like Hamilton and Artemis Fowl and put them on Disney+.  They even tried to squeeze more money out of their movies by putting Mulan (2020) on their streaming platform, but viewers would have to pay an additional $30.00 to watch.

Why this move to streaming?  I would recommend reading the mighty John Nolte for his much more in depth analysis of these issues.  But keep in mind that billions of dollars have been spent on movies that are sitting on the shelves for months and months without bringing in any revenue.  A movie like Black Widow, being part of the can't-miss Marvel Cinematic Universe could potentially bring in $1 billion all on its own, but instead, it is collecting dust.

This brings me to HBO Max.

Warner Bros. owns HBO Max and they have been struggling.  First of all, they had a disastrous launch a few months ago, because people became incredibly confused between the this and the other streaming service HBO GO.  In addition, Warner Bros had other streaming services with some high-demand content.  For example, DC Universe had a huge number of DC Superhero films as well as original content like Stargirl.  Also, Warner did not reach a deal with Roku, which has a gigantic market share of streaming services.  So even if you wanted a subscription, unless you had something like a PS4, you would be able to stream the content on your TV.

But now Warner Bros is going all in on HBO Max.

The fire shot across the bow is the announcement that Wonder Woman 1984 will now stream on HBO Max on Christmas day.  Unlike Mulan, users will be able to stream WW84 at no additional cost.  Rather than milking their existing customers, Warners is trying to lure people to their subscription service.  As Nolte pointed out:

So during the fiscal quarter when Mulan dropped on Disney Plus, 16.2 million new subscribers signed on for that service. Let’s be conservative and say 13 million were going to sign up anyway, but for the rest, Mulan was the reason they signed up. So 3.2 million signed on for Mulan.

Let’s again be conservative and say only two million will subscribe to HBO Max so they can see Wonder Woman 1984. If those two million stick for just six months, that’s $180 million in revenue for Warner Bros. It’s $360 million over the course of the year.

I'll tell you that I was already planning on at least getting a trial subscription because of the Snyder Cut of Justice League.  This is honestly making it more likely for me to pick up the service permanently, particularly if more premium content is release here.  In addition, most of the premium content on DC Universe has been migrated over to HBO Max.  They are also moving entertainers like Conan O'Brien over to their platform.  And there are rumors that they are close to a deal with Roku

This could also affect cable providers.  HBO is an expensive channel to have.  If I am paying for it streaming on demand, why would I pay for the cable subscription.  This could cause a significant drop in cable TV revenue.  Cord-cutting has been hurting the cable industry for years, and this could push them even closer to the a-la-carte model that many people have been hoping for, where you only pay for channels that you want.

There are two things that are three things that are keeping me from being too enthusiastic about this:

1. Content - One of the reasons I don't have HBO on my cable is that there is a great deal of content that I do not want in my home.  I know that this is a problem with any streaming service, but as someone who grew up with HBO as a kid, I'm not keen on it.

2. Price - Right now, it is priced at $14.99 a month, which makes it one of the most expensive services around.  This would be $180.00 a year.  Unless they provide a theatrical quality film at least once a month, it wouldn't provide the value for the cost.

3. Theaters - I may be in the minority, but I love the theatrical experience.  I love going out, because it makes the movie feel like an event.  I love that it is often a point of social contact, where friends and family gather together for the shared experience.  I love being in a crowd of people and have that wave of collective emotion wash over us, whether it involves laughs or screams or tears.  I love that the lights go down and the movie demands your full attention.  No matter how good a movie is at home, there are too many distractions.  In a theater, a movie can cast a spell on you.  At home, the magic doesn't really take hold.  Anything that jeopardizes that theatrical experience makes me sad.

What are your thoughts?

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