December 6th 2020 - Warner Bros. and the Wreck of Cinema Industry

For today's post I chose the subject which is close to topic of my original blog. This is partly because it illustrates the point of COVID-19 having long term (and usually negative) consequences to the way today's world conducted its business. Three days ago it was announced that Warner Bros., one of Hollywood's top studios, will take an unprecented move of having its entire 2021 slate of feature films first distributed on HBO Max streaming service instead in cinema theatres. The move is unprecedented, but hardly unexpected in light of lockdowns and increasingly oppresive restrictions made distribution through cinema theatres impractical or entirely impossible. Warner Bros., like all major Hollywood studios, was at first trying to solve that problem by postponing its premieres, but new wave of pandemic, as well as new wave of lockdowns, made unlikely that those films, some of them having production and promotion budgets in hudreds of millions of dollars, would find commercially viable audience any time soon.

Warner Bros. decision, on the other hand, doesn't seem as revolutionary as it was advertised at first sight. 2021 films will be available to HBO Max subscribers only in first 30 days since the premiere, and the films will be distributed theatrically in non-US markets and afterwards in US cinemas. However, the decision has created uproar among US cinema theatre operators who are, just like the rest of entertainment industry, experiencing financial and business Armageddon. For Warner Bros. HBO Max option represents the only way to extract money from the people who are locked in their homes, afraid of virus or, after losing their jobs, simply can't afford to spend hundred or so dollars to bring their families to nearest multiplex.

What makes this decision even more interesting is that it represents the very first time Hollywood was actually harmed by major economic calamity. Even the Great Depression actually benefited American film studios, because impoverished masses often saw few hours with fairytale worlds presented on silver screen as the only escape from harsh realities outside. Hollywood actually had its worst business results three decades later, in period between 1968 and 1971, when USA had one of the most properous periods in history; crisis had more to do with mismanagement at the top of the studios and the old moguls being unwilling or unable to adapt to social mores and tastes of new Baby Boomer generation.

What we are witnessing now is another paradigm shift. Cinema theatres, which actually began its decline in late 1940s and 1950s with arrival of television, will finally capitulate to streaming services and survive only as a niche activity for elite cinephile audience, not unlike those who like to watch stage plays and musicals on Broadway or West End.

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