Production company Village Roadshow is filing a lawsuit against Warner Brothers. This follows earlier renegotiations of contracts over the company’s decision to move their content onto streaming. This decision is already costing them $200 million.

Village Roadshow is alleging that the film’s distributor breached the terms of their contract. The breach is due to the film’s release on HBO Max and in theatres simultaneously. Per gadget360, the suit states, “WB’s sole purpose in moving the release date of The Matrix Resurrections forward was to create a desperately needed wave of year-end HBO Max premium subscriptions from what it knew would be a blockbuster film, despite knowing full well that it would decimate the film’s box office revenue and deprive Village Roadshow of any economic upside that WB and its affiliates would enjoy.”

Another part of the claim is the notion that The Matrix Resurrections is subject to rampant piracy. Delivering The Matrix Resurrections to streaming services on the same day as the film’s theatrical release gave pirates a full HD version instantly. This contributes to the loss of revenue suffered by Village Roadshow, as they don’t have access to the revenue gained by Warner Brothers for signing people up to HBO Max.

“Project Popcorn”

Primarily this suit takes aim at what has been dubbed “project popcorn”. It’s a decision by Warner Brothers to release their theatrical films simultaneously on the HBO Max platform in the hope of gaining more subscribers during the pandemic. The suit describes Project Popcorn as a

“clandestine plan to materially reduce box office and correlated ancillary revenue generated from tent pole films that Village Roadshow and others would be entitled to receive in exchange for driving subscription revenue for the new HBO Max service, for which only [Warner Bros parent] WarnerMedia would be the sole beneficiary.”

Citing the box office takings of the rest of the franchise, Village Roadshow uses these numbers to demonstrate just how much revenue was lost. From the first film grossing $783 million (adjusted inflation) to the sequels enjoying further success at $1.1 billion and $643 million respectively. Compared to these numbers, the box office takings for The Matrix Resurrections stand at a paltry $143 million. “There can be no doubt that the abysmal theatrical box office sales figures from The Matrix Resurrections dilute the value of this tent pole franchise as a film’s lack of profitability generally prevents studios from investing in additional sequels and derivative films in the near term,” the suit further elaborated.

Warner Brothers have countered Village Roadshow’s position, alleging that it is a tactic to avoid their own contractual commitment to participate in arbitration. The company began this against them last week.

Tip of the Iceberg

This lawsuit forms part of a broader, ongoing discussion in the film industry. While “the death of the cinema” has been looming over the industry for a number of years, the exceptional circumstances of the pandemic has, in some ways, accelerated this process. While some studios have continued to use traditional release models (for example Sony/MGM with No Time to Die) others have elected to go down the “project popcorn” route.

This has caused a fair amount of backlash. Scarlett Johansson famously filed a suit against Disney for their handling of Black Widow’s release. She settled with the studio out of court. Film-making luminaries like Christopher Nolan and Denis Villeneuve have come out against the strategy. They argue that their films should as enjoyable as intended; in a theatre setting.

While there are arguments for both sides of the debate, I think it ultimately comes down to preference. A lot of the magic of the theatre experience has diminished over the years as access to technology has increased. Personally, I think that while home theatres are impressive there is no substitute for the experience of seeing a film at the cinema. Especially a bombastic, visually arresting epic from the likes of Villeneuve or Nolan.

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