• by Karlene Lukovitz  @KLmarketdaily, July 23, 2021

Next year, Warner Bros. will produce 10 movies exclusively for the HBO Max streaming service, WarnerMedia CEO Jason Kilar told analysts during Thursday’s Q2 earnings call.

At the same time, Kilar — who was the first to break with the traditional exclusive theatrical window during the pandemic, and declared that all of Warner Bros.’ 2021 films would be released simultaneously on HBO Max — said that WarnerMedia will not abandon theaters.

“The motion picture format absolutely matters, in a number of ways,” he said. Noting that “Godzilla vs. Kong” (shown above) pulled in $462 million in ticket sales, he stressed that that title and others have also received strong response in homes via HBO Max.

However, he confirmed that some Warner Bros. films will be exclusively in theaters for just 45 days prior to going to HBO Max and others will debut on the so-called “day and date” model of simultaneous release in theaters and on Max.

The film industry isn’t “going back to the way the world was in 2015, 2016 or 2017, where windows were quite lengthy between theatrical and home exhibition,” Kilar said, adding that WarnerMedia’s distribution strategy will “continue to evolve and continue to innovate in ways that not only work with consumers and fans, but also for our business partners.”

AT&T plans to spin off WarnerMedia, in a merger with Discovery Inc., next year.

WarnerMedia’s success in using new blockbusters to attract HBO Max subscribers has been widely reported.

Last month, Warner Bros. Group Chairman Toby Emmerich confirmed that big movie releases are “punching above their weight” in terms of driving new subscription sign-ups. He also  stated straight-out that next year, Warner Bros. plans to debut about half of the roughly 20 films it makes annually on HBO Max, and release the other half exclusively in theaters for at least 45 days before they go to at-home distribution.

The Q2 earnings report provided the latest evidence of the strategy’s validity.

HBO Max and HBO added 2.8 million new subscribers during the quarter, bringing the U.S. and global totals to 47 million and 67.5 million, respectively, and is projecting between 70 million to 73 million global subscribers by year’s end.

Subscription revenues were up 21%, to $4 billion, primarily driven by 39% growth at HBO Max and HBO, and average rate per subscriber unit (ARPU) for the combined services was $11.90.

Content and other revenues from third-party TV production and theatrical movies sales rose 35%, to $3.1 billion.

But programming and marketing costs also jumped: up 75% to $4.2 billion, and up 80% to $983 million, respectively.

WarnerMedia has apparently determined that having exclusive new movies from its own Warner Bros. studios for HBO Max pans out on a bottom-line basis.

Other major players have also adopted the day-and-date release strategy with success since WarnerMedia broke the ground.

Most recently, Disney raked in $80 million from global ticket sales plus $60 million in pay-per-view through Disney+ Premier Access, during the opening weekend of “Black Widow.”