HBO Max’s 2021 has been defined by same-day streaming releases for Warner Bros.’ biggest films but now 2022 and beyond is coming into clearer focus.
It was already apparent that aggressive strategy wouldn’t carry over past this year. Cineworld, parent company of Regal Cinemas, last month signed a multi-year agreement with Warner Bros. to show its films in Cineworld’s U.S. movie theaters in 2022 with a 45-day window of theatrical exclusivity.
However, the same-day release cat is out of the bag and this week, WarnerMedia CEO Jason Kilar provided some details about how his company is herding it while respecting theatrical windows. He told the Recode Media podcast that starting next year, Warner Bros.’ “big, epic” films will head to the theaters first and that there will also be smaller films that still get the day-and-date treatment, as long as theaters show them.
“…I don’t think you’re going to see the world go back to 2016. I think the world is changing and that’s the way the world supposed to work. And so, we’re going to obviously adapt to that and in many ways lead the charge there,” he said.
Lightshed analyst Rich Greenfield pointed out that Kilar did not say how long before a movie hits HBO Max, but “we know that the recent Regal agreement only gives theaters exclusivity on blockbusters for 45 days – [so the] implication is that on day 46, movies like ‘The Batman’ will be on HBO Max at no extra cost to the consumer.”
Another wrinkle in how HBO Max delivers films to users will be the ad-supported tier, which is still slated to show up this year. AT&T hasn’t provided an exact price point but last month Kilar said the primary difference is the ad-supported tier won’t include same-day streaming access to Warner Bros. 2021 films. It’s unclear how that policy will carry over to 2022 and beyond.
The end of same-day movie releases could potentially result in higher churn for HBO Max as people who signed up for the big releases stop seeing the full value in the service’s $14.99 per month price tag. Alan Wolk, co-founder and lead analyst at TV[R]EV, said HBO Max should price its ad-supported tier very reasonably: “Like $7/month or less reasonably, at which point I suspect many of those people who were going to defect will just switch to the ad-supported version and you’ll have a win.”
Kilar said that WarnerMedia will announce pricing for ad-supported HBO Max in the coming months. He added that he believes his company will be able to cover whatever price break it gives to consumers and that the AVOD HBO Max could end up being slightly accretive to AT&T’s overall economics.
That will hinge on how Warner Bros. films are dispersed within HBO Max’s service tiers and how aggressively WarnerMedia prices an HBO Max with ads. For now, the Warner Bros. films are driving customer acquisition, lower churn and lots of positive PR for HBO Max, and the service will ride that wave at least through December.