Bill Mechanic: Lack Of Talent Management Skills Atop AT&T & WarnerMedia Caused HBO Max Rancor And Long-Term Damage – Guest Column


Editors Note: As chairman/CEO of Fox Filmed Entertainment in the era of Titanic, X-Men, Independence Day and Braveheart, and producer of the Oscars and Oscar-nominated films like Hacksaw Ridge and Coraline, Bill Mechanic has been part of the fabric of the film industry his whole career. He thought he had seen every iteration and change in a business striving to stay relevant in the digital age. The surprise move by WarnerMedia to drop its entire 2021 film slate on HBO Max was a new one on him, and one he thinks can do lasting damage to the traditions of a billion-dollar industry. Here, he explains why.

We are living in an upside-down world. For decades, WB has been the most talent-friendly studio, catering to the needs of stars, directors, and even producers. But in one fell swoop, after being swallowed by AT&T and inserting a management team of outsiders, WB became the antithesis. Chris Nolan declared that he and others “went to bed thinking they were working for the greatest studio and woke up to find out they were working for the worst streaming service.”

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And Denis Villeneuve wrote that WB went “from being a legacy home for filmmakers to [a] new era of complete disregard… There is absolutely no love for cinema, nor for the audience here.”

When you are running a studio, the job is to make movies you think can make money but you must always keep in mind that it is impossible to reach that goal without the best talent.

Notifying your most important filmmakers — via the press — that you’re dumping their films onto a streaming site day-and-date with theatrical, as opposed to the traditional and promised exclusive theatrical release, is like Trump firing people by tweet. Essentially, it’s pure arrogance, that people don’t matter to you. It is the quickest path to failure.

The arrogance is not surprising. In their primary business, AT&T hasn’t had to manage talent.

Telephones are meant to be spoken into; not to answer back with a voice of their own. You tell Siri what to do, not have her tell you what she wants. She’s an AI servant. Much harder to do that with Chris Nolan, Patty Jenkins or Denis Villeneuve—with good reason. They weren’t hired to take orders.

Jason Kilar claims that they are currently soothing over the ruffled feathers. My guess is he doesn’t even know what that means. Nor does his tech background lead him to really care. He said that they made the decision to dump their entire slate of films to their streaming service because it’s what the fans want. Let’s be clear here: It has nothing to do with the fans. Or the talent. Or the pandemic (which yes, does provide a short-term excuse). It has to do with an unsuccessful launch of HBO Max, which is not a failure, by any means, though compared to the subscription levels of Netflix or Disney, it has to be viewed thus far as an also-ran. With the earlier entry into entertainment with DirecTV also a laggard, all AT&T cares about is the impact on their stock. They need to prove the billions they spent acquiring DirecTV and WB will deliver transformative profits.

Film fans—or maybe called by their real names, film buffs—aren’t clamoring for movies via streaming. Fans go to theatres to see them with other moviegoers to get the fullest impact of both the big screen and their fellow audiences (sometimes good and sometimes bad). Yeah, it doesn’t matter as much when the film isn’t good and many films can play better alone than with a crowd. Those films are certainly great at home, via streaming, cable, or whatever. But for a film buff, seeing a movie with others is simply not replaceable. WarnerMedia and others can argue day-and-date allows people to still go to see movies in theatres. In truth, they are treating anyone who does like they’re an idiot, paying $15 to $20 for the privilege instead of staying home and seeing a month’s worth of whatever for the same price regardless of the number of people who join in. This isn’t to serve filmgoers, it’s to magnify the value of their service. Theatrical release increases perceived value for subsequent markets like streaming, while streaming first destroys the perceived value.

Economically, the big problem for all of us who make movies is that the value they are enhancing—the value of their service not our movie—is exclusionary. We share when we make a successful movie, but there’s not an iota coming back to us if we make their service successful. It’s a lose-lose for talent.

I am not being anti-home screen in any way, but my prejudice is that I love to go to movies. I remember growing up and watching The Wizard of Oz on my television at home every Thanksgiving and being both awed by the majesty of the story, the music, and the performances.

But, when I went to film school and saw the film with a theatre full of kids and their parents, I saw a movie I’d never seen before. Everything came to life in a way with those kids that transported me to my past in my living room and into a fantasy world of dreams and nightmares in a new and, yes, far more heightened way.

But this really isn’t about what the best film experience is. Everyone can do as they like, and neither is mutually exclusive. I used to say we were making films for the choir, the rabid fans, and it was only when we stumbled on to something like Titanic that people who never went to movies came out to see what everyone was talking about. The box office on that film was often mistakenly attributed to repeaters, but the truth was it broke through because it not only got repeaters, but attracted people who hadn’t been to a theatre in years.

Left to its natural evolution, the industry will find a happy medium of serving the “fans” in theatres and the more casual or older and perhaps busier film lovers at home. Theatres don’t have to go away to allow streaming to continue on its growth spirals.

That’s why this is about pure economics, not fandom. It’s also not about how to make the most money since, as you can hear from the Wall Street analysts, there is no way that bypassing or undercutting theatrical produces the best results. I believe there are 47 movies to gross at least $1 billion. Titanic may have broken a barrier but it’s been exceeded every year since repeatedly by other films. A simple truth: releasing movies first in theatrical establishes value; releasing movies first in streaming destroys value. There is a reason that Disney, right now leading the way both in theatrical box office share and in propelling its streaming service, isn’t turning their back on Marvel, or Pixar or Lucasfilm movies in theatres. Doing so would cost Disney billions of dollars of profit from those labels, and I would imagine would lose them filmmakers like Kevin Feige, and all the other fantastic directors and animators on their other labels.

When David Fincher decides to make Mank at Netflix, that’s a conscious decision on his part, in full cooperation with Netflix in how and where it’s distributed. There are no surprises sprung on him. He has said it was not only the best way to make that film but probably the only way. I can tell you from experience that the middle-level-budget movies are the ones that are the most difficult to find financing for theatrical release, not because the audiences have gone away but because financiers have shied away.

My argument is not about where something plays but which financier you choose to work with and whether their word matters. Whether your contract matters. AT&T/WarnerMedia’s decision to bypass theatrical without even discussing/explaining their intent with the filmmakers who have devoted not only years of their lives but pieces of themselves creatively is the bottom of the slippery slope we’ve been on for decades. After the studios, originally funded by owner-operators, were sold to conglomerates, who sold to end users (hardware companies, cable companies, etc.), the feel and the concern for movies evaporated along with those sales. AT&T thinks that filling the “pipes” with “content” is the same as dealing with cell towers or phone manufactures. They deal in commodities, not art (even call it commercial art if you want).

Rupert Murdoch blew up the legacy of Fox without so much as a thought. He got his Fox News.

Movies were an unpredictable and risky nuisance. Besides, movie people were spoiled, particularly the artists and the executives.

The difference between Fincher choosing to make his picture at Netflix and the WB filmmakers finding out via the Internet that the films they made for theatrical release were being tossed aside to help promote a streaming service is all the difference in the world. Legal, cultural, economic, collaborative.

In all of this mess, WarnerMedia’s decision has made one thing clear. There is a void in leadership within the motion picture industry. The studios are the most constant financiers of movies, the only ones who make films as their sole reason to exist. So where is not just the cry of outrage but also the rational gameplan for how the business could and should run?

I like that Richard Lovett and Patrick Whitesell have stood up and taken a position for the talent they represent. I love that Chris Nolan, Denis Villeneuve, Patty Jenkins, Judd Apatow and others are even more forceful in taking up a leadership role in opposing WarnerMedia’s decision. Patty Jenkins said it best when she asked why some studio doesn’t step forward and provide all this great talent a home they can trust. She shouldn’t have to ask and yet not a single studio has stood up to protest this attack on their very existence.

It’s strange to hear only silence from those who should be fighting for the business they run. The pandemic has all but destroyed so many businesses, and movie theatres are among the hardest hit. They should be nurtured, not destroyed. Casting them aside like they did something to earn their demise is close to criminal, especially when the vaccines should at least let us start returning to some sense of normal by mid-year. It’s one thing to let things play out, let consumers decide they don’t want to go to see the Lakers or see Dune , and would rather watch at home. Deciding for them is a self-fulfilling prophecy.

The people who made this decision undoubtedly don’t care about movies or the talent behind them, so it’s not a surprise they acted like no one would care. This wasn’t about the fans, it was about them.

All the king’s horses and all the king’s men aren’t going to put our world back together again.

There are so many pieces that are broken, and maybe the ones we’re discussing in Hollywood don’t rise to the level of those in Washington, though I’d argue they affect many of us on a deep level. The theatrical window proven functionality has been overturned and the best we can hope for is that a smarter evolution occurs with all voices heard.

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