NOEL KING, HOST:
The movie business changed dramatically this year. The most basic reason - movie theaters are mostly closed. And this month, Warner Brothers announced that all of its movies next year will stream on HBO Max on the same day that they get to theaters. Our co-host, Steve, talked to John Horn, who covers the entertainment industry from member station KPCC in Los Angeles.
JOHN HORN, BYLINE: Movie theaters are about to go out of business. I mean, I think that's the biggest story. If you were to look at the biggest chains right now, they could barely scrape enough money together to buy a big tub of popcorn and a box of Red Vines. I mean, they have gone from a multibillion-dollar business to basically no money overnight.
STEVE INSKEEP, HOST:
Isn't this just a temporary thing, though, because of the pandemic?
HORN: Well, you could argue that, but I would make an alternative argument, and I would say that the pandemic has accelerated what was inevitable. If you look at admissions at movie theaters, it has been flat to declining over the past decade. On top of that, the pandemic exposed, I think, a fundamental weakness in the theatrical model, and that is that they haven't changed their business in a century. And the world has changed that if you want to watch a movie right now, you can dial it up on Netflix and watch it right now. You don't have to wait to go to the multiplex and wait in line and buy a $10 popcorn.
INSKEEP: And you're telling me that the Warner Brothers announcement, which seemed to me like one more temporary expedient, is actually just accelerating where the world is headed?
HORN: Well, yeah. What Warner Brothers said is we have decided that the future for this company is going to be digital. They said it's only going to last a year. But that to me is a a bell that they cannot unring at the end of 2021.
INSKEEP: Is anybody else besides theaters cut out of the business or harmed when theaters cease being the primary way that first-run movies are distributed?
HORN: Yes. A lot of actors and directors make deals that involve a lot of contingent compensation. So you remember Tom Cruise used to get $20 million a movie. The studio said, why are we paying you that much money when the movie may not work? So what a lot of actors and directors have been doing is cutting their upfront compensation for a share of the revenue. And it's almost always tied to box office. So let's say, Steve, you're a $10 million movie star. The studio says, how about we pay you a million, but we're going to give you 10% of the box office proceeds? You go, OK, that actually could bring me more money.
HORN: If there is no box office, that money is gone. And it's not just the Tom Cruises of the world. I was talking to somebody who works on scores for movies, and he said when one of his films goes to a streaming platform, he makes 10 cents on the dollar in terms of his royalty. His work is the same, but because it's debuting on a streaming platform and not at the multiplex, he's taking 90% pay cut in his royalties.
INSKEEP: Money aside, there have got to be a lot of directors, actors, people who care about the craft who hate this trend.
HORN: They hate it. But the argument is a studio is like a restaurant, and they've got a freezer full of food that's going to go bad. This happens to be movies. So they used to do dining inside - show your movie at the theater. Then they said, OK, what do we do? Dining outside, maybe a drive-in model. And now they're doing the takeout delivery model, which is we're going to take our movies to streaming platforms because we can't do what we've done before. So it has left the filmmakers quite unhappy. But if you're a studio, what are you supposed to do? You have these movies. They have got to get seen, and they have no way to do it.
INSKEEP: John Horn, it's a pleasure talking with you.
HORN: Pleasure's all mine.
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KING: John Horn hosts the podcast "Hollywood, The Sequel," and he covers entertainment for KPCC.
(SOUNDBITE OF THE CINEMATIC ORCHESTRA'S "NECROLOGY") Transcript provided by NPR, Copyright NPR.