Warner Bros. is adjusting its movie production and distribution plans in light of the prolonged shutdown of theaters driven by the coronavirus pandemic, AT&T CEO John Stankey told investors Thursday.
Stankey emphasized that the studio still “believes in the theatrical experience” but said it is inevitable that some titles planned for a traditional theatrical will have to shift to streaming platforms including WarnerMedia’s newly launched HBO Max.
“There’s no question the longer this goes on there’s going to be some content on the margin that we look at and say that it may be better served to be distributed in a different construct,” Stankey said, speaking on AT&T’s second quarter earnings call. He was quick to add that big-budget event movies like Christopher Nolan’s “Tenet” and the upcoming “Wonder Woman” sequel “Wonder Woman 1984” would still be destined for the big screen.
On Monday, Warner Bros. delayed the release of “Tenet” for the third time, moving it indefinitely from its Aug. 12 target date.
“Some content is going to be more enjoyable and better to see in theaters than in the living room,” Stankey said. “We want to work with our theatrical partners and exhibitors and try to get through this very difficult period.”
Warner Bros. has also moved some of its future production slate around and “retooled” some properties to make them more suited to an SVOD release.
“There are going to be some shifts as we move forward here,” Stankey said. In some cases the studio is “choosing to executive the movie as a direct-to-streaming construct.”
Stankey also emphasized that with the HBO Max platform, WarnerMedia and its parent company now have much more flexibility to find homes for its content. “I love that we have that option now,” he said of HBO Max.
The migration of feature films to streaming platforms has been a source of tension between studios and exhibitors at a time when the coronavirus lockdown and social distancing measures have walloped the economy and forced the closure of movie theaters around the world.
During the conference call, Stankey and AT&T chief financial officer John Stephens also made references to a downsizing effort that is under way that is expected to result in significant layoffs. It’s unclear how hard WarnerMedia divisions will be hit, but it’s understood a review of operations across Warner Bros., HBO and other company divisions is in progress.
Stankey, who took the reins as CEO on July 1 from his longtime mentor Randall Stephenson, called it part of a “transformation” initiative to refocus one of the nation’s oldest corporate brands to deploy resources to those areas “directly serving customers.”
“A workforce realignment and reduction of labor costs is under way,” Stankey said.
One place where AT&T will likely find labor savings is in its retail store operations. After the long shutdown forced by the coronavirus crisis, Stankey said that some of the company’s “least productive” retail outlets will not reopen.
More to come
Source: Read Full Article