WarnerMedia is “Rethinking” Its Theatrical Model Because of the Coronavirus

Since being forced to shut down last month, the American movie theater industry has suffered untold losses and remains on shaky ground. So when an executive for AT&T, which owns one of the biggest movie studios in Hollywood in Warner Bros., says that WarnerMedia is “rethinking” its theatrical model, it will likely be a cause for even more concern for those in the already-struggling exhibition community.

Warner Bros. owner AT&T held a quarterly earnings call this morning, and according to The Hollywood Reporter, chief operating officer John Stankey explained that the company is “rethinking our theatrical model and looking for ways to accelerate efforts that are consistent with the rapid changes in consumer behavior.” WB is already implementing changes that would have been unthinkable just a few months ago, making Birds of Prey available on digital platforms far sooner than it would have been under traditional circumstances and just yesterday announcing that the animated feature Scoob!, which was designed for a theatrical release, will instead skip theaters entirely and head straight to digital.

I wish Stankey would have elaborated more about exactly what that “rethinking” entails. We know the studio was, at one point, reportedly considering digitally releasing one of its biggest movies of this year, Wonder Woman 1984, before the decision was made to bump its release to August 14, 2020. How close were they to actually going forward with that digital strategy? Could the studio once again be thinking about pulling the trigger on that if global audiences aren’t ready to return to theaters in full force this August? Will Warner Bros. use Christopher Nolan’s Tenet, which is still scheduled to arrive in July, as a guinea pig to get a sense of whether people are willing to risk going to theaters again so soon? Are these movies truly too big and too costly to shift to digital? If Warner Bros., one of the oldest and most prestigious studios left in Hollywood, rethinks the theatrical model in the long term, what exactly does that mean? Will it simply translate to them releasing fewer theatrical films per year (and more straight to VOD or the soon-to-launch HBO Max)? Or are there other options being flung around in WB’s virtual meetings as we speak?

As you can see, Stankey’s statement raises lots of questions. What the theatrical exhibition business looks like when this is all over is anyone’s guess, but as the ground continues to shift under our feet (literally – there was an earthquake in Los Angeles last night), we’ll be here to keep you updated along the way.

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