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Releasing ‘Tenet’: Of Many Bad Options, This One Is the Best

There's no solution that can make everyone happy, but it helps to remember that Christopher Nolan didn't make a symbol; he made a movie.

"Tenet"

“Tenet”

Warner Bros.

Film distribution faces the same business challenges as any other industry in 2020. Everyone is confronted with a set of worst-case scenarios that previously existed only in MBA classrooms — the kind of outrageous tests meant to tax candidates’ abilities to think outside the box. The range of solutions often come down to those that are the least bad: Which will lose the least money, and will be consistent with a company’s core business interests and long-term strategies?

That’s where Warner Bros. stands as it grapples with how to release Christopher Nolan’s “Tenet.” The long-anticipated summer release is burdened not only with the challenge of grossing enough to lead to an eventual profit, but also with an outsized role that Nolan eagerly embraced: It’s the film that’s meant to save theaters.

Nolan’s film would need to gross $800 million worldwide in order to break even in theaters. At this writing, of course, that’s impossible as most domestic theaters are closed — and, as COVID-19 outbreaks continue to spike, it seems increasingly likely that they may stay that way for the foreseeable future.

So now what does Warners do? Given the multiplicity of stakeholders, is there even such a thing as a “right” choice? There’s the studios’ need to see revenue against a film that cost $400 million between production and marketing; films are financed by borrowing, and interest piles up the longer a film remains unreleased. There’s the film’s significance to the exhibition ecosystem, which could collapse; there’s the consideration of whether “Tenet” is actually the best movie to lead theatrical reopening; and there’s honoring the preferences of the studio’s most important director. With no single solution likely to satisfy most people, Warners is in an unenviable position.

Here are the options Warner Bros. must consider.

Open in Theaters Worldwide August 12

That’s four weeks from now, with “Tenet” already having been delayed twice from its original July 19 date. Moving again — whether to a set date, or a TBD, would be awkward. More so, now that marketing specifies the new date.

At this point it could preclude China, which has yet to reopen; that’s where Nolan’s “Interstellar” saw about 15% of its worldwide gross of $678 million. In North America, the New York metro area is being very cautious about doing anything that might threaten its low caseload, while Los Angeles theaters are closed with no end date, per the California governor. The rest of the country is a mixed bag of spiking case numbers (Texas, Arizona, Florida, South Carolina) and state governments that take a variety of stances on managing public gatherings. All of this could greatly reduce the number of possible dates.

Where theaters are open, social distancing could reduce capacity. Warners needs large turnouts in order to be profitable, but many would-be audience members could shudder at the idea.

Delay Theatrical Until All Theaters Open

Most tentpole titles open day and date worldwide. “Tenet” is eagerly awaited, and much of its appeal lies in its mystery. If major audience segments can’t see it, their interest might wane as they learn details about the film that decrease its event factor. (Also: Piracy.)

This approach contains multiple downsides. It would mean keeping the production loan on the books for an indefinite period, and would also mean “Tenet” would have to jockey with other major releases. There’s also the psychological element: After all the “Tenet” buildup, how long can audiences maintain that excitement?

Open in Most of the World August 12

Outside China and North America, most countries are good to go or likely will be by mid-August. This is important because suffering exhibitors are a global phenomenon. The three top domestic exhibitors all have major foreign footprints (Regal is owned out of the U.K.). This also would allow Warners to take what it can get in the advantages of being first big film to open.

"Tenet"
“Tenet”

Release on Premium VOD Everywhere

Given Christopher Nolan’s commitment to theatrical, this is likely a nonstarter; it’s also impractical, given lower VOD penetration outside North America. However, “Tenet” might justify a record rental price — say, $30 initially, with perhaps even a higher return to the studio than the standard 80 percent. At 10 million rentals, $30 would generate $300 million and at least $240 million to Warner Bros.

Go For a Hybrid VOD/Theatrical Release

Again, Nolan makes this unlikely. But the longer U.S. conditions prevent openings on a significant scale, the odds against this go from unthinkable to plausible. By going theatrical where possible and VOD everywhere else, it would guarantee same-time availability.

The HBO Max Option

This one also wouldn’t make Nolan happy, but it could be lucrative. To do this, it would demand more than a subscription, which is $14.99 a month and easily canceled. But what if “Tenet” were only available with a longer commitment — would the “Tenet” plan of $90 for six months make sense?

HBO Max seeks 50 million domestic subscribers, 80 million total, over the next five years. At last report, it had 10 million worldwide. It also has unresolved carriage issues with Roku and Amazon Fire.

If 10 million people subscribed to HBO Max for six months, that’s $900 million, nearly all going to Warners. It’s likely that a significant share of that group would continue their subscriptions. Add worldwide interest for the service — including more access to new territories — and this actually might be the easiest way for the film to make back its money.

Even if HBO Max presents the best case for recouping the cost of “Tenet,” two massive problems exist. The first, of course, is Nolan’s say in this. The second is that Warner Bros. has many films that need to play theaters; removing “Tenet” from theaters hurts that cause.

L-r, Regan (Millicent Simmonds), Marcus (Noah Jupe) and Evelyn (Emily Blunt) brave the unknown in "A Quiet Place Part II.”

“A Quiet Place Part II”

Jonny Cournoyer

Finally, here’s an idea: Maybe relying on one potential blockbuster to reopen theaters isn’t the best way to go. It seems unlikely that we’ll have the luxury of seeing all theaters, and audiences, ready and able to return at the same time, so maybe what makes more sense is smaller titles. Looking at the VOD success of Screen Media’s “The Outpost,” there might be enough interest for multiple lower-cost titles like “Unhinged” (Solstice), “Broken Hearts Gallery” (Sony), and “A Quiet Place Part II” (Paramount).

Maybe it would be best for Warner Bros. to let the world know that it’s backing away from early adoption. Stick with “The Conjuring 3” on September 11. Figure out what is best after baby steps.

The media and health experts condemn Donald Trump for his school reopening policy, which emphasizes opening above all else. Warners and Nolan are smarter than him. The issue is far less important, but it’s critical for the business. The end goal shouldn’t be getting “Tenet” to open first; it’s not a symbol. It’s a movie, potentially a very good one, and it’s a business decision. Warners should treat it accordingly.

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