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War Breaks Out Over Streaming Vs Theatre Release Movies Village Roadshow Sues

Australian entertainment group Village Roadshow are up in arms over the decision to simultaneously release “The Matrix Resurrections” on HBO Max and in theatres claiming it is a breach of contract.

The movie performed poorly in theatres generating only a fraction of the revenue of it’s predecessors.

The Co producers of the movie filed legal action overnight in Los Angeles highlighting tension over the concept of streaming Vs movie theatre releases.

Village Roadshow who own theatres in Australia alleges that Warner Bros. is attempting to cut the company out of future movies and TV shows based on characters or intellectual property that it has ownership stakes in. Village Roadshow said it has invested $4.5 billion in its more-than-two-decade partnership and co-financed many Warner Bros. hits including “Joker,” “American Sniper” and the “Matrix” franchise.

“WB has also been devising various schemes to deprive Village Roadshow of its continuing rights to co-own and co-invest in the derivative works from the films it co-owns,” the suit alleged.

The move comes as several movie companies priortise direct-to-consumer streaming over traditional distribution platforms such as old fashioned movie theatres.

Warner Bros. parent WarnerMedia, a unit of AT&T put its entire 2021 slate of movies on its sister streaming service HBO Max at the same time as their theatrical release.

The studio also moved the release date of “The Matrix Resurrections” to 2021 from 2022 in an effort to help HBO Max attract more subscribers, the lawsuit alleged.

“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,” documents filed in the court case claims.

Village Roadshow claims that other films released during the pandemic performed well at the box office, including “Spider-Man: No Way Home,” which unlike “The Matrix Resurrections” wasn’t released on a streaming platform when it came out in theatre

The Wall Street Journal claims that moves by major media companies to give priority to their streaming services over other platforms have potentially significant financial implications for actors, producers and financial partners who fear that the push to streaming will come at their expense.

In July, actress Scarlett Johansson filed a lawsuit against Walt Disney Co., alleging her contract to star in the Marvel movie “Black Widow” was breached when the media giant released the movie on its streaming service Disney+ at the same time as its theatrical launch.

Disney settled with Ms. Johansson in September.

In response to the Village Roadshow lawsuit, a spokeswoman for Warner Bros. said: “This is a frivolous attempt by Village Roadshow to avoid their contractual commitment to participate in the arbitration that we commenced against them last week. We have no doubt that this case will be resolved in our favour.”

The WSJ also claims that Village Roadshow has also been exploring strategic options including taking on investments or putting the business up for sale.

Village Roadshow said Warner Bros. tried to force it to give up its rights in a TV series based on the movie “Edge of Tomorrow,” which it co-financed and co-produced.

“When Village Roadshow refused, WB said the quiet part out loud: it will not allow Village Roadshow to benefit from any of its Derivative Rights going forward, despite the over $4.5 billion it has paid WB to make and distribute 91 films. In other words, if Village Roadshow won’t give up its rights, WB will make sure they are worth nothing,” the suit said.

“Warner Bros. has a fiduciary duty to account to Village Roadshow for all earnings from the exploitation of the films’ copyrights, not just those it can’t hide through sweetheart deals to benefit HBO Max,” said Mark Holscher, a Kirkland & Ellis litigation partner who represents Village Roadshow.

Village Roadshow also said under its agreement with Warner Bros. it should have the option to partner in “Wonka,” a prequel to “Charlie and the Chocolate Factory” that it co-produced.