The simultaneous release on HBO Max — where it will be available for a month at no extra cost to subscribers — should take a big dent out of box office revenues, which were expected to be around $1 billion globally. The first “Wonder Woman” earned north of $800 million, with $413 million in the United States alone. But with COVID-19 cases spiking all across the country and leading to many states to re-enact stricter policies, a full theatrical release in the U.S. will not be viable for some time.
“I think the studio hoped/believed that it could release domestically for a $30 – 40 million box office and release internationally for another $100 million. Then cases spiked up to new highs,” Wedbush analyst Michael Pachter told TheWrap. “Biden won [the election], so on January 21, the entire country is shutting down for 6 weeks or more. The calculus was whether to hold ‘WW84’ till next year and disrupt the timeline for future installments, or to eat the hit from low theatrical revenue and do something to boost HBO Max.”
AT&T says that HBO Max subscribers are ahead of schedule, pointing to a combined 38 million U.S. subscribers between Max and regular HBO at the end of September, which surpassed its internal expectations of 37 million. But we bet if you tied up WarnerMedia executes with the Lasso of Truth, they’d probably admit to being underwhelmed with the first few months of HBO Max.
HBO Max technically has 28.7 million subscribers, though the heavy majority of those, 25.1 million, are customers who already pay for HBO and get Max for free as part of their subscription. Of those, around 12.7 million have actually signed up (in what AT&T calls “activations”) for Max specifically. An additional 3.6 million have bought HBO Max on its own through WarnerMedia.
To put that in context: Disney+ shot past 28 million subscribers within its first three months and now has more than 70 million globally. WarnerMedia has around 57 million subscribers between HBO and HBO Max around the world. And while getting “Wonder Woman 1984” on HBO Max figures to be a huge boost to HBO Max — especially as WarnerMedia still remains without a deal with Roku, one of the largest streaming device providers — it’s an open question as to how much of a lift Gal Gadot can provide.
For starters, a wide swath of potential new viewers are already in the HBO ecosystem, they’re just not using Max. Some back-of-the-envelope math suggests that HBO Max would need to add somewhere between 2 and 3 million new people (those who are not currently paying for an HBO subscription) to sign up for Max, and keep it for an entire year, to be any kind of comparison to a domestic box office haul. Even then, Warner Bros. is likely faced with taking a financial hit on the film, which will get some kind of international release in theaters.
“Nobody is going to subscribe to HBO Max to watch a two-hour movie. They might join a trial, and might stay because they like the content, and I’m sure that is what AT&T/Warner hopes will happen,” Pachter said. “Realistically, they will add only single-digit millions, and nobody will know why those people joined. They will not make up for lost box office, but there was nothing they could do about that anyway.”
In announcing the move Wednesday, WarnerMedia CEO Jason Kilar said they’ll have a different way of measuring the film’s success, given the atypical nature of the release. “While we will pay attention to theatrical revenues, our expectations are clearly adjusted due to COVID-19,” he said. “In parallel, we will be paying close attention to the numbers of families and fans diving into HBO Max, as we certainly anticipate that a portion of fans will choose to enjoy ‘Wonder Woman 1984’ that way on opening day and beyond.”
Going forward, “Wonder Woman 1984’s” HBO Max release now leads to the question of whether rival studios, namely Disney, will follow suit. Disney already experimented with a streaming release with “Mulan” and is putting Pixar’s “Soul” on Disney+ up against “Wonder Woman” Christmas Day. “Mulan” required people to be Disney+ customers and pay an extra $29.99 to watch the film during a three-month window (it becomes available for all subscribers next month).
Disney CEO Bob Chapek told investors and analysts last week during the company’s quarterly earnings call that he was “pleased” with “Mulan’s” performance and teased that paid streaming releases would have a role going forward. That naturally puts all eyes on Disney’s next film on the release schedule, Marvel Studios “Black Widow.” The film has pushed back a full calendar year to next May, and it’s far from certain that, even if one or two vaccines are rolling out across the country, enough people will have been inoculated by May to make a theatrical release viable. Given the interconnectedness of the Marvel Cinematic Universe, any further delay to one film has a domino effect.
“We’re not getting back to normal till after June, so each film will stand on its own and each streaming service will perform the calculation about whether to release in theaters or direct to OTT services,” Pachter said. “I don’t think Disney takes cues from Warner Bros.”