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In seismic shift, Warner Bros. to stream all 2021 films

Inside Telecom Staff

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Warner Bros

In the most seismic shift by a Hollywood studio yet during the pandemic, Warner Bros. Pictures on Thursday announced that all of its 2021 film slate — including a new “Matrix” movie, “Godzilla vs. Kong” and the Lin-Manuel Miranda adaptation “In the Heights” — will stream on HBO Max at the same time the films play in theaters.

Among the myriad release plan changes wrought by the pandemic, no studio has so fully embraced streaming as a lifeline. But after disappointing domestic ticket sales for “Tenet,” and with the majority of U.S. theaters currently closed, the AT&T-owned Warner Bros. will turn to a hybrid distribution model next year. Films will debut simultaneously in theaters and on HBO Max in the U.S. After one month, they will stop streaming and continue to play only in theaters.

The move follows Warner Bros.’ decision to put “Wonder Woman 1984” on HBO Max in December, along with a concurrent theatrical run. If that pivot sent shockwaves through the industry, Thursday’s announcement rattled Hollywood to the core.

“Given the unprecedented time that we’re in, we needed a creative solution to address our fans, our filmmakers and our exhibitors, said Ann Sarnoff, chief executive of WarnerMedia Studios, in an interview. “Big and bold is a necessity right now.”

Sarnoff called it a “temporary solution” and a “one-year plan.” The studio said other options — releasing big-budget films solely in reduced capacity theaters or delaying films another year — weren’t appealing. Warner Bros.’ move amounts to an acknowledgement that any full rebound for theaters is still a year or more away.

“We’ve got to get people back in theaters at full capacity at some point. If you read the medical experts that’s going to take a while to work its way through the system,” said Sarnoff. “If we saw an end in sight to the pandemic, we might have a different strategy. But we don’t see that at this moment.”

HBO Max is only available in the United States. Internationally, the studio’s 17 films planned for 2021 release will roll out exclusively in theaters.

Warner Bros.’ decision resonates especially because the 117-year-old studio of “The Wizard of Oz” and “Casablanca” has long been a market-leader in Hollywood — and one known as especially supportive of theaters. The studio has generally ranked among the top two studios in market share over the past decade — most recently dwarfed only by Walt Disney. Warner’s films typically account for $1.5-2 billion annual in ticket sales in North America — a lot of money to compensate for in HBO Max subscribers. Warner Bros. confirmed the films will be available to subscribers with no further charge.

“I can’t comment on the economics of how it will all work — I’d need a crystal ball for that,” said Sarnoff. “But I’m very optimistic that this is a win-win-win for our fans, our filmmakers and our exhibitors. We’re getting the movies out. We’re allowing them be seen on the big screen which is what they were made for, but giving an alternative. The hybrid approach also allows us to market them in a fuller way than we would have had we just looked at the less-than-full capacities in theatrical right now.”

Warner Bros.’ 2021 slate includes many of the expected top movies of the year, including “Dune,” “The Suicide Squad,” “Tom & Jerry,” “The Conjuring: The Devil Make Me Do It,” “King Richard” and “Judas and the Black Messiah.”

The move by Warner Bros. only makes the pain being felt by exhibitors all the more acute. Having been shuttered for much of the year, cinemas reopened nationwide in late summer except in some key locations, including Los Angeles and New York. But with most major releases postponed and virus cases surging, about 60% of theaters have since closed again. Regal Cinemas, the country’s second largest chain, has shut all its doors. Following Warner Bros.’ announcement, shares of AMC Entertainment fell 16%; Cinemark was down 22%.

AMC vehemently disagreed with Warner Bros.’ strategy. Adam Aron, chief executive of the world’s largest chain, said AMC had gone along with the “Wonder Woman 1984” plans because of the virus surge. But he said AMC would oppose the same approach into 2021, when a vaccine could accelerate a recovery.

“Clearly WarnerMedia intends to sacrifice a considerable portion of the profitability of its movie studio, and that of its production partners and filmmakers, to subsidize HBO Max,” said Aron in a statement. “As for AMC, we will do all in our power to ensure that Warner does not do so at our expense.”

Under chief executive Jason Kilar, the former Hulu chief, WarnerMedia recently reorganized to further prioritize its streaming service. He has moved aggressively to boost HBO Max, even if it comes at the expense of the theatrical marketplace. After a rocky rollout, HBO Max said in October that nearly 9 million people were using HBO Max, though 29 million had access to the streaming service as part of their HBO subscriptions. For comparison, Disney+ has about 74 million subscribers, though it’s available worldwide.

“Our content is extremely valuable, unless it’s sitting on a shelf not being seen by anyone,” said Kilar in a statement. “We believe this approach serves our fans, supports exhibitors and filmmakers, and enhances the HBO Max experience, creating value for all.”

It’s the latest in a series of sea changes sweeping through an industry convulsed by the pandemic. The demise of the traditional 90-day theatrical window — something long sought by some in Hollywood — has accelerated, and many think it’s gone for good. Universal Pictures last month made deals with both AMC Theatres and Cinemark to give them the option of shifting movies into home release after just 17 days in theaters. Disney has postponed most of its releases, but redirected “Hamilton,” “Mulan” and the upcoming Pixar release “Soul” to Disney+.


NEW YORK (AP) — By JAKE COYLE AP Film Writer.

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GM looking to build 2nd US battery factory, Tennessee likely

Associated Press

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GM looking to build 2nd US battery factory, Tennessee likely

General Motors says it’s looking for a site to build a second U.S. battery factory with joint venture partner LG Chem of Korea.

The companies hope to have a decision on a site in the first half of the year, spokesman Dan Flores said Thursday.

Flores would not say where the company is looking, but it’s likely to be near GM’s Spring Hill, Tennessee, factory complex, which is one of three sites the company has designated to build electric vehicles.

A joint venture between GM and LG Chem currently is building a $2 billion battery factory in Lordstown, Ohio, near Cleveland, that will employ about 1,000 people. The site is fairly close to GM’s two other designated electric vehicle plants, one in Detroit and the other north of the city in Orion Township, Michigan.

GM is likely to need far more battery capacity if it’s able to deliver on a goal of converting all of its new passenger vehicles from internal combustion engines to electricity by 2035.

LG Chem now has a battery cell plant in Holland, Michigan, that supplies power to the Chevrolet Bolt hatchback and the new Bolt electric SUV.

Industry analysts have said that automakers face a global shortage of batteries as the industry moves away from gasoline powered vehicles. Most of the world’s batteries are built in China and other countries.

The Wall Street Journal first reported that GM and LG Chem are pursuing a site in Tennessee to build a new battery plant.

GM’s venture is risky, at least based on U.S. electric vehicle sales. Last year full battery electric vehicles accounted for only 2% of the U.S. market of 14.6 million in new vehicle sales. But automakers are set to roll out 22 new electric models this year and are baking on wider consumer acceptance.

The consulting firm LMC Automotive predicts that U.S. battery powered vehicle sales will hit over 1 million per year starting in 2023, reaching over 4 million by 2030.


DETROIT (AP) — By TOM KRISHER

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UK competition watchdog investigates Apple’s App Store

Associated Press

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UK competition watchdog investigates Apple's App Store

U.K. authorities have launched an investigation into Apple’s App Store over concerns it has a dominant role that stifles competition and hurts consumers.

The Competition and Markets Authority said Thursday it was looking into “suspected breaches of competition law” by Apple. The announcement adds to regulatory scrutiny of the iPhone maker’s app distribution platform, which is also the subject of three antitrust probes by the European Union’s executive Commission.

Apple said the App Store is “a safe and trusted place for customers” and a “great business opportunity for developers.”

The investigation was triggered in part by complaints from app developers that Apple will only let them distribute their apps to iPhone and iPad users through the App Store. The developers also complained that the company requires any purchases of apps, add-ons or upgrades to be made through its Apple Pay system, which charges up to 30% commission.

“Millions of us use apps every day to check the weather, play a game or order a takeaway,” Andrea Coscelli, the authority’s CEO, said in a statement. “So, complaints that Apple is using its market position to set terms which are unfair or may restrict competition and choice – potentially causing customers to lose out when buying and using apps – warrant careful scrutiny.”

The watchdog said it would consider whether Apple has a “dominant position” in app distribution for Apple devices in the U.K., and, if it does, whether the company “imposes unfair or anti-competitive terms on developers” that results in less choice or higher prices for consumers buying apps and extra.

Apple said it looked forward to explaining its App Store guidelines to the U.K. watchdog.

“We believe in thriving and competitive markets where any great idea can flourish,” the company said by email. “The App Store has been an engine of success for app developers, in part because of the rigorous standards we have in place — applied fairly and equally to all developers — to protect customers from malware and to prevent rampant data collection without their consent.”

By The Associated Press

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UK extends job support, tax breaks for pandemic-hit economy

Associated Press

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UK extends job support, tax breaks for pandemic-hit economy

Britain’s treasury chief on Wednesday announced an additional 65 billion pounds ($91 billion) of support for an economy ravaged by the coronavirus pandemic, extending job support programs and temporary tax cuts to help workers and businesses in his annual budget.

Chancellor of the Exchequer Rishi Sunak told the House of Commons that it is too soon for the government to rein in spending, saying that his plans would “protect the jobs and livelihoods of the British people” through September as the government slowly lifts lockdown restrictions that have shut businesses across the U.K.

At the same time, he said Britain must be prepared to cut the deficit, announcing plans to increase the tax on corporate profits and boost revenue from personal income taxes in 2023.

“An important moment is upon us,” Sunak told the House of Commons. “A moment of challenge and of change. Of difficulties, yes, but of possibilities, too. This is a budget that meets that moment.”

U.K. public borrowing has risen to levels not seen since World War II as the government seeks to cushion the fallout from COVID-19, which has reduced gross domestic product by 10% and cost more than 700,000 people their jobs. Projections released Wednesday by the Office for Budget Responsibility show that the economy will still be 3% smaller five years from now than it would have been without the pandemic.

Sunak said government support programs have succeeded in mitigating the impact. The unemployment rate is now expected to peak at about 6.5%, rather than the 11.9% forecast last July, he said, citing estimates from the Office for Budget Responsibility. The economy is forecast to grow 4% this year and 7.3% in 2022.

On Wednesday, Sunak announced plans to extend those support programs for six months. They include a furlough program, under which the government pays 80% of the wages for private employees unable to work during the pandemic, as well as grants for self-employed workers, a temporary increase in welfare payments and tax relief for businesses.

Sunak cheered business leaders by offering a tax credit of up to 130% of the money companies invest in expanding and improving their operations. Sunak said the credit is expected to increase investment by 10% or 25 billion pounds over the next two years, creating jobs and boosting economic growth.

Stephen Phipson, chief executive of Make UK, described the policy as bold.

“Manufacturers have strong intentions to invest in capital equipment as well as digital and green technologies which are crucial for our long-term recovery,” he said. “Today’s announcement should help turbocharge investment to ensure that those plans turn into reality in the short-term.”

Looking to the future, Sunak said the government will in 2023 increase corporation tax to 25%, from the current rate of 19%, and freeze personal income tax thresholds, which will increase revenue as inflation boosts incomes.

But opposition leader Keir Starmer accused Sunak of failing to address deep-seated economic problems and banking on a “consumer spending blitz” to bail out the economy.

Starmer said the budget fails millions of key workers who are having their pay frozen, businesses swamped by debt, and families paying higher local property taxes.

“The central problem in our economy is a deep-rooted insecurity and inequality, and this budget isn’t the answer to that,” Starmer said. “So rather than the big, transformative budget that we needed, this budget simply papers over the cracks.”

Ian Blackford, the Scottish National Party’s leader in Parliament, criticized Sunak for continuing a strategy of temporary support that leaves businesses and consumers unsure of the future.

The budget leaves Scottish voters with a clear choice as the SNP campaigns to hold a second referendum on independence from the U.K., Blackford said.

“For the people of Scotland, this budget comes at a critical moment of choice,” he said, echoing Sunak’s language. “Post-Brexit and post-pandemic, Scotland now has a choice of two futures: The long-term damage of Brexit and more Tory austerity cuts, or the opportunity to protect her place in Europe and to build a strong, fair and green recovery with independence.”

LONDON (AP) — By DANICA KIRKA

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