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Will HBO Max use Christopher Nolan’s ‘Tenet’ as a ‘Battering Ram’ Against Amazon and Roku?

(Image credit: WarnerMedia)

Launching into a competitive pandemic market for video streaming services, and locked out of the top connected TV device platforms, HBO Max needs to do something bold, LightShed Partners said. 

The LightShed media-tech brain trust wonders in its latest blog post, are HBO Max and its corporate backers, AT&T and its WarnerMedia subsidiary, bold enough to take a $200 million Christopher Nolan summer blockbuster straight to SVOD?

Doing so, the equity analysis firm said, would provide an unbeatable hedge in HBO Max’s “affiliate fee 2.0” carriage battles with Roku and Amazon, not to mention vastly improve the new streaming service’s signup numbers. In fact, LightShed describes Tenet as a potential “battering ram” that could be used by HBO Max against Roku and Amazon.

Same with Wonder Woman 1984, another delayed WarnerMedia summer theatrical release. 

“Releasing Tenet and Wonder Woman 1984 on HBO Max would bring that high profile content that is exclusive to HBO Max and cannot be found on legacy HBO and finally create a buzz around the service. If content is really still king, it would also give AT&T significant negotiating leverage with Roku and Amazon,” LightShed writes. 

Nolan’s highly anticipated espionage thriller was originally slated to hit North American theaters on July 17. Several pandemic-related delays pushed the movie to the edge of summer. Now, with the national new case count spiraling out of control and theaters shuttered indefinitely, distributor WarnerMedia must decide whether to delay the film until summer 2021 … or figure out some other means of exhibition.

Certainly, straight to SVOD would fall on the radical/extreme side of the decision-making spectrum. 

While Comcast and NBCUniversal could probably afford to experiment with straight-to-DTC-streaming for a lower budget film like Trolls World Tour, bypassing lucrative theatrical--and home entertainment--and going straight to subscription streaming with an expensive picture like Tenet would involve a major corporate write-down,” LightShed concedes. 

WarnerMedia would also face the daunting task of trying to convince noted auteur Nolan not to show his movie in theaters. It would have to re-negotiate all the film’s talent deals, replacing safer theatrical performance benchmarks with riskier SVOD guarantees. 

And since we’re only talking about the domestic theatrical market here—HBO Max being a domestic streaming service—putting 4K versions of the film on a big SVOD service would enable the kind of digital piracy that would wreak havoc on foreign box office revenue. 

“Yes, shifting these made for the big screen films to direct-to-SVOD (no PVOD window at all) would lead to dramatically lower profits than if they had been released in theaters and would likely require painful write-downs. However, if the goal is to force the HBO Max app onto Roku and Fire TV devices, the highest profile content WarnerMedia has are new, big budget Warner Bros. films,” Lightshed adds.