Village Roadshow sues Warner Bros. over ‘The Matrix Resurrections’ release on HBO Max

With the pandemic potentially nearing its end phase, cinemagoers appear to be returning to movie theatres in their droves, based on stellar box office numbers from tentpole movies like "Spider-man: No Way Home", but the ramifications of changes to major studios theatrical distribution strategies in 2021 are spilling into 2022!

In response to the shuttering of cinemas during the Covid-19 pandemic, many of the major distributors took the decision to release their films either exclusively on premium VOD and streaming platforms (side-stepping cinemas altogether), or simultaneously on streaming services with limited runs in movie theatres (a strategy known as "day and date release"). 

Walt Disney, currently the biggest of Hollywood's major studios, employed a day and date strategy with a host of films (including those from its Marvel franchise) that would typically have had an exclusive initial theatrical release in pre-Covid times, often with some notable commercial success.

Although other major studios also embraced alternative distribution strategies, Warner Bros. took the bold move in 2021 to give all its tentpole movies a day and date release on its own HBO Max streaming service in the USA, including "Wonder Woman 1984" which featured Gal Gadot in the lead role as the popular DC Comics heroine. A significant factor behind this decision was Warner Media's aim of bolstering the take-up of its HBO Max subscription video-on-demand service, which remains locked in a battle for subscribers with rival Disney+. 

The much anticipated 'The Matrix Resurrections' movie was the last of Warner's significant titles to hit HBO Max simultaneously with cinemas in the United States in 2021, before reverting back to the traditional "exclusive theatrical window" in 2022. The fourth in the series of "Matrix" films was co-financed and co-produced with Village Roadshow - a longstanding partner of Warner Bros. 

According to a lawsuit filed in the Los Angeles courts this week, Village Roadshow alleges that Warner's decision to release 'The Matrix Resurrections' on HBO Max at the same time as in cinemas, destroyed the film's box office and "inflicted serious harm" to the Matrix franchise. Potentially the most controversial element of the release of the movie was Warner's decision to bring forward the release date from April 2022 (when an exclusive theatrical release window for the film would have been likely), to December 2021 which, in alignment with Warner's then distribution strategy, meant the film would go out on HBO Max day and date with cinemas. Village Roadshow's claim, in a nutshell, is that an exclusive movie theatre release would have significantly boosted the commercial success of 'The Matrix Resurrections' and enhanced the value of the Matrix franchise more broadly.

Village Roadshow have suggested in their claim that the release date change was a cynical move by Warner to "create a desperately needed wave of year-end HBO Max premium subscriptions”. Furthermore, they noted that Warner Bros. had delayed release until 2022 of some of its wholly owned projects like 'The Batman' and 'Black Adam', therefore giving these films exclusive theatrical releases. The suit also cites the success of the exclusive theatrical release of Sony and Disney’s 'Spider Man: No Way Home', pointing out that Warner’s simultaneous release strategy in late 2021 was not caused by the pandemic. 

To industry observers some of the allegations made by Village Roadshow seem unfair, given that Warner notably followed a day and date release strategy with a range of other major titles which could have been pushed to 2022 and may have benefited from an exclusive theatrical release, including 'King Richard', 'Dune', and 'The Suicide Squad' (the latter being a Warner and DC owned property). Responding to the claim, Warner Bros made a statement that it had brought an arbitration case against Village Roadshow and that their lawsuit was therefore "a frivolous attempt... to avoid [a] contractual commitment to participate in the arbitration” with the studio adding that they had “no doubt that this case will be resolved in [their] favor.”

Whilst the dispute between Warner Bros and Village Roadshow runs its course, it's worth noting that Warner Media recently announced HBO Max ended 2021 with 73.8 million subscribers, exceeding its forecast for the year, a result which analysts attribute in part to a strong slate of content in Q4 of 2021. 

Image: Warner Bros