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Warner Bros. sued over ‘Matrix Resurrections’ release on HBO Max

The suit marks a bitter end to a creative and financial relationship that's stood for roughly 25 years and brought in billions in box office.

(CN) — Warner Brothers' controversial decision to release its entire slate of 2021 movies on its HBO Max streaming service has drawn a lawsuit from Hollywood production juggernaut Village Roadshow.

Warner Bros. announced its plan to release its films on HBO Max concurrently with movie theaters in 2020, during the height of the pandemic. Dubbed "Project Popcorn," it was a daring break with precedent, which typically gives movie theaters an exclusive window of at least 45 days before the films are released on home platforms.

The initiative was a boon for HBO Max, which added about 12 million paying subscribers. But it angered some filmmakers like Denis Villeneuve, director of the recent "Dune" incarnation. And it may have decimated box-office receipts.

According to the civil suit, filed Monday in Los Angeles Superior Court, Project Popcorn "ensured that The Matrix Resurrections would be a bust at the box office," and "inflicted serious harm to the entire Matrix franchise.”

According to Village Roadshow, the movie's HBO release "effectively enticed movie-going audiences away from the theaters by streaming these tent pole films day-and-date on HBO Max for no additional charge, a practice that is completely inconsistent with industry standards and customary commercial practices in the motion picture industry.” 

The suit marks the breakup of a creative and financial relationship that's stood for roughly 25 years, between Warner Bros., one of the original "big five" American movie studios, and Village Roadshow, a co-producer and co-financier of movies. The partnership produced 91 movies, including the "Matrix" series, "The Joker," the "Ocean's 11" remake and subsequent sequels, "Mad Max: Fury Road" and "The Edge of Tomorrow."

The fourth "Matrix" movie grossed $148 million at the box office — a far cry from previous installments in the series, which all took in more than $600 million each (the second film in the series grossed more than $1 billion). According to the suit, this was because its audience had no need to go to the theaters since the film was available to stream in their living rooms.

Of course, the Covid pandemic has meant far fewer trips to the movie theater in general. But, as Village Roadshow points out, some films have still managed to prosper. The latest Spider Man film, for example, has grossed nearly $750 million in the U.S. and more than $1.5 billion worldwide.

"The hit to The Matrix Resurrections’ box office returns was not the result of just the cannibalization from streaming but from the rampant piracy it knew would come by distributing this marquee picture on a streaming platform on the same day as its theatrical release," the company says in its lawsuit.

Village Roadshow gets a percentage of the box-office receipts, but Warner Bros. is under no obligation to share the money it makes from subscribers to HBO Max. The production company says Warner Bros. "reached acceptable accommodations" with Matrix co-stars [Keanu] Reeves and Carrie-Anne Moss, as well as director Lana Wachowski. It similarly reached an agreement with Legendary Entertainment, co-producer of "Dune," which was also released on HBO Max last year. But according to the complaint, it "shut down negotiations with one of its longest-term relationships" — Village Roadshow.

A Warner Bros. spokesperson called the lawsuit "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 favor.”

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