WarnerMedia CEO Jason Kilar addressed the media conglom’s controversial move to release Warner Bros.’s full 2021 movie slate on HBO Max day-and-date with theaters — saying that theatrical releases are still a key part of the studio’s strategy, but also acknowledging that the industry’s windowing strategy has likely permanently changed.
“I think we’re still in the experimentation mode” on theatrical/streaming movie release windows, said Kilar, speaking Thursday at the 2021 Morgan Stanley Technology, Media & Telecom Conference 2021.
The WarnerMedia chief also talked up plans for HBO Max’s release of a price-reduced, ad-supported tier, currently set to launch in the second quarter of 2020.
“I get so excited about it,” he said about the ad-supported HBO Max plans, noting he has experience in the ad-supported VOD business as the first CEO of Hulu. “It turns out most people on this planet are not wealthy,” he added, and said the advertising experience in HBO Max will be implemented “elegantly”
“I think once they see it, people are going to be so excited about how thoughtful we’ve been about advertising,” Kilar said.
Kilar noted that WarnerMedia made the day-and-date film release decision for 2021 largely because of the pandemic. After COVID-19 restrictions lift, “Is theatrical going to see a crazy resurgence?” he asked rhetorically. I could easily see that happening” and if and when that happens, “we will be there to serve them.”
“We absolutely are developing and producing movies for theatrical distribution,” Kilar said, nodding to Warner Bros.’ stable of “event-worthy” franchises, including DC Entertainment, Harry Potter and the Matrix.
Regarding the Harry Potter franchise, Kilar hinted more Wizarding World movies are in the pipeline: “we are incredibly thankful to be partnering with J.K. Rowling on that” saying there is lots of potential in that property.
The decision to put films simultaneously in theaters and on HBO Max was about giving consumers choice, according to Kilar. He noted that “Tom and Jerry” topped the box office this weekend.
As for when theatrical releases might return in a big way, Kilar said “it’s too early to say — it’s so dynamic. People are absolutely experimenting.” In the second half of 2021, “you’re going to see more visibility into 2022.”
That said, at a high level, Kilar said he agreed with comments made earlier this week at the conference by Disney CEO Bob Chapek, who said he’s “not sure if there’s going back” to pre-pandemic theatrical windows.
“It sure feels like it’s not going to go back to 2015,” Kilar said, adding, “I can only speak for ourselves.”
As of the end of 2020, HBO Max had 17.2 million active accounts, more than double 8.6 million in the third quarter. WarnerMedia reported 41.5 million combined HBO Max and HBO U.S. subscribers, up 20% from 34.6 million a year prior.
Asked about the $14.99 price point of HBO Max, Kilar said, “The short answer is, the customers have spoken,” citing subscriber gains for HBO Max and HBO. But, there’s also a big opportunity for HBO Max’s lower-price AVOD version to attract customers unwilling or unable to pay full freight.
Kilar is now 10 months into the job, having joined WarnerMedia just a few weeks ahead of the May 2020 launch of HBO Max. The former Hulu CEO has made a number of significant changes to WarnerMedia. That included at least two waves of layoffs and a management shakeup under which HBO Max content bosses Robert Greenblatt and Kevin Reilly were let go and Warner Bros. CEO Ann Sarnoff assumed expanded oversight over content operations.
Separately, AT&T last week announced that it reached a deal to spin off DirecTV and other U.S. video operations in a deal with TPG Capital. The “New DirecTV” company will not include HBO Max.