Warner Bros.: Christopher Nolan's poor Tenet box office led to HBO Max shift

"What we learned through Tenet is that the US is not quite ready yet to fully reopen," WarnerMedia Studios CEO Ann Sarnoff said.

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Jennifer Bisset
Jennifer Bisset Former Senior Editor / Culture
Jennifer Bisset was a senior editor for CNET. She covered film and TV news and reviews. The movie that inspired her to want a career in film is Lost in Translation. She won Best New Journalist in 2019 at the Australian IT Journalism Awards.
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Christopher Nolan at AFI Fest 2017 in Hollywood, California.

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Christopher Nolan didn't hold back after WarnerMedia announced its polarizing decision to release its 2021 films on HBO Max the same day as theaters. The Tenet director called HBO Max "the worst streaming service." But according to WarnerMedia Studios CEO Ann Sarnoff, it was Tenet's US theatrical release that led to the decision.

"We learned a lot about the inclination of people to go to theaters when they're open, obviously," Sarnoff told CNBC on Tenet's release (via IndieWire on Wednesday). Tenet earned less than $60 million at the US box office; Nolan's 2010 film Inception, by comparison, hauled in more than $290 million domestically. Sarnoff noted that Tenet's international box office, in places with more open theaters, performed far better.

"What we learned through Tenet is that the US is not quite ready yet to fully reopen and have full engagement of fans back into theaters, hence this new strategy."

Nolan has kept a long-running relationship with Warner Bros., starting in 2002 with his film Insomnia and continuing to his latest film, Tenet. But that sci-fi action thriller, the first Hollywood tentpole film to open in theaters in September after the pandemic shutdown, was a flop in the US.

"We have movies which are ready to go and they've been sitting on shelves," Sarnoff continued. "We thought this was the most creative and win-win situation to bring them out not only in theaters, but simultaneously for 31 days on HBO Max so that people who don't have access to theaters in the US are able to see the movies and we're able to market them more fully."

Tenet's theaters-first release plan was hamstrung by shuttered theaters, capacity limits in cinemas that actually were open and moviegoers' underlying misgivings about the risks of going to watch a movie on the big screen at all. Tenet reportedly lost Warner Bros. as much as $100 million.

Nolan, who's known for being especially protective of the theatrical experience for films, said in a statement to The Hollywood Reporter that Warner Bros.' strategy is dysfunctional and that it'll batter the studio's relationship with filmmakers and talent. 

"Some of our industry's biggest filmmakers and most important movie stars went to bed the night before thinking they were working for the greatest movie studio and woke up to find out they were working for the worst streaming service," he said. 

"Warner Bros. had an incredible machine for getting a filmmaker's work out everywhere, both in theaters and in the home, and they are dismantling it as we speak. They don't even understand what they're losing. Their decision makes no economic sense and even the most casual Wall Street investor can see the difference between disruption and dysfunction."

But Tuesday, AT&T Chief Executive John Stankey appeared unruffled by criticism like Nolan's and defended the plan as being the best strategy in extraordinary circumstances. Both HBO Max and Warner Bros. are owned by the telecom giant through its WarnerMedia entertainment unit.

"I know there's a lot of noise out there in the market that different people have different points of view," Stankey said Tuesday, speaking at the UBS Global TMT Virtual conference.

"Fundamentally, one of the unfortunate effects of the pandemic is there basically has been no theatrical exhibition business. And that's painful for a lot of people," Stankey said. "Our feeling is there's a win-win-win type of solution. There's a win for us. There's a win for our customers, and there's a win for our partners. And anytime you're going to change a model, it creates a degree of noise -- and this is certainly no exception."

WarnerMedia's decision last week marked the latest in a series of titanic changes in movie releases caused by the coronavirus pandemic. Studios and cinemas have been experimenting with new release strategies that would've been inconceivable a year ago, especially for expensive films like Wonder WomanDune and The Matrix. But Warner Bros.' decision to release an entire year of its film slate online at the same time as in theaters is the most seismic shift yet.

HBO Max, AT&T and WarnerMedia's streaming service that launched in May, stumbled a bit out of the gate, as it struggled to get customers to understand the proposition of HBO Max and was hampered by failing to get its app on major streaming devices like Roku and Amazon Fire TV gadgets.

Nolan has been vocal with his reaction to Warner Bros.' decision, giving his indictment in an interview with ET.

"Oh, I mean, disbelief," he said, describing his response. "Especially the way in which they did. There's such controversy around it, because they didn't tell anyone."

"In 2021, they've got some of the top filmmakers in the world, they've got some of the biggest stars in the world who worked for years in some cases on these projects very close to their hearts that are meant to be big-screen experiences. They're meant to be out there for the widest possible audiences ... And now they're being used as a loss-leader for the streaming service -- for the fledgling streaming service -- without any consultation."

Nolan didn't respond to a request for comment.

Correction, Dec. 19: An earlier version of this story misidentified Ann Sarnoff's title. She's the head of WarnerMedia Studios, the unit where Warner Bros. resides. 

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