Warner Bros.’ Streaming Plan May Invite Piracy "Bonanza"

Warner Bros.’ Streaming Plan May Invite Piracy ‘Bonanza’
Godzilla: Courtesy of LEGENDARY AND WARNER BROS. ENTERTAINMENT INC. Matrix: Warner Brothers/Courtesy Everett Collection.

The studio’s decision to smash its theatrical windows for 2021 films could result in "high-quality" counterfeit versions of the titles "available on every pirate service in the world" the same day the features hit HBO Max.

The industry remains up in arms about Warner Bros.’ decision to send its biggest 2021 movies directly to HBO Max on the same day the titles hit U.S. theaters. But one group is probably pleased with the plan: Film pirates. “For sure, pirates are celebrating WarnerMedia’s decision,” says Abigail De Kosnik, director of the Berkeley Center for New Media and an associate professor at UC Berkeley.

Traditionally, the theatrical window has provided some buffer against piracy’s erosion of a film’s earnings. Usually, during the early days of a theatrical release the only pirate copies that become available are low-quality “cam” versions, surreptitiously recorded via phone or tablet by someone in a cinema. Law-breaking consumers in some territories have demonstrated a willingness to watch these copies — especially in places like Russia and Turkey, according to experts — but pirates throughout the West and among the more developed major markets of East Asia, such as Japan, South Korea and China’s major urban centers, tend to prefer to wait for the film to hit streaming services, whereupon a high-definition copy can be “ripped” and disseminated.

Warner Bros.’ hybrid plan of dropping next year’s film slate on HBO Max in the U.S. — the only territory where the service has fully launched so far — while simultaneously marketing and releasing the movies in cinemas overseas will likely erode international box office earnings of titles like DuneThe Matrix 4 and Godzilla vs. Kong. “If a film is made available in the U.S. on HBO Max, a high-quality pirate copy is going to be available on every pirate service in the world that same day,” notes Andy Chatterley, CEO of U.K.-based piracy data and analytics company Muso.

Those dynamics were on display when Disney opted to release its big-budget, live-action remake of Mulan over Disney+ in select territories this fall, while also opening it theatrically in the countries where the streaming service hasn’t yet launched (such as the enormous China market, crucially). The film attracted 21.4 million illegal downloads in the 12 weeks after it released, according to De Kosnik’s research, one of the highest totals she has observed since she began measuring pirate consumption in 2017. “Pirates will enjoy a real bonanza next year because of the WarnerMedia decision,” she adds.

Because piracy is such a complicated consumer decision, involving sensitivity to price, content availability, personal ethics and government efforts at deterrence, projecting its impact on box office earnings is difficult to do, explains Neil Gane, general manager of the Asia Video Industry Association’s Coalition Against Piracy. But thanks to the COVID-19 pandemic, he says, pirates in many places are better poised to strike than at most moments in recent memory.

Gane says lockdowns and stay-at-home orders have boosted the fortunes of piracy syndicates in the same way that they have driven subscription gains on legitimate streaming platforms. "For example, during the peak lockdown period in Southeast Asia from the end of March to mid-May," he explains, "we saw a proportionate spike there in usage of both pirate streaming and legal streaming platforms." (Indonesia and Malaysia were rare exceptions in the region, thanks to recent government efforts to block access to piracy sites.)

Adds Muso’s Chatterley: “We’ve never seen so many big-budget movies hit pirate networks so quickly. The piracy rates are going to be staggering — that’s just inevitable.”

This story first appeared in the Dec. 16 issue of The Hollywood Reporter magazine. Click here to subscribe.