Warner Bros. Sued Over 'The Matrix' Sequel’s Streaming Release

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Warners Bros. Studio Water Tower.​
Image by spangle84/Pixabay

The pandemic-era trend of Hollywood studios releasing new blockbusters on streaming apps has sparked yet another lawsuit—this time against Warner Bros. and its rollout of the new “Matrix” sequel.

Village Roadshow Entertainment Group, co-producer of “The Matrix Resurrections,” sued Warner Bros. in Los Angeles Superior Court on Monday, claiming breach of contract over the studio’s move to release the film simultaneously on HBO Max and in movie theaters.

The suit, first reported by the Wall Street Journal, alleges that Warner Bros. released the “Matrix” sequel on HBO Max in order to prop up the streaming service—despite knowing that “doing so would cannibalize box office sales and pave the way for massive piracy,” Village Roadshow said in a statement. Warner Bros. and HBO Max are both owned by parent company WarnerMedia.

According to the complaint, Warner Bros. is required to "distribute each film in a manner 'consistent with industry standards' and 'consistent with customary commercial practices in the motion picture industry.’” Instead of doing that via an exclusive theatrical release window, the studio released “The Matrix Resurrections” on HBO Max in December on the same day of the film's theatrical release, Village Roadshow claims.

In a statement, Warner Bros. described the lawsuit as “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,” the studio added.

Village Roadshow’s lawsuit is the latest entertainment industry dispute stemming from a major studio prioritizing its direct-to-consumer streaming services. In July, actress Scarlett Johansson sued Disney after the media giant released the Johansson-starring Marvel movie “Black Widow'' on its Disney+ streaming service on the same day that it hit theaters. Johansson argued that her box office-based bonuses were negatively impacted by the studio’s decision; Disney, which denied the claims, settled with the actress in September.

Last year, Warner Bros. parent WarnerMedia released its entire film slate on HBO Max and in theaters simultaneously, citing the coronavirus pandemic. The decision outraged factions within the industry, including director Christopher Nolan, who at the time said the move “makes no economic sense.”

Village Roadshow also argued that Warner Bros. has used some of its other films—including “Joker,” the highest-grossing R-rated movie ever—to boost HBO Max’s subscriber base and raise WarnerMedia’s market value. Its complaint “alleges that [Warner Bros.] shared none of this value with Village Roadshow,” according to the production house.

"Warner Brothers 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,” Mark Holscher, a Kirkland & Ellis litigation partner who is representing Village Roadshow, said in a statement.

Other media giants have made similar moves to Warner Bros. in response to the pandemic, in some instances also drawing harsh criticism. In April 2020, AMC Theaters threatened to never show Universal Pictures’ movies again, after NBCUniversal CEO Jeff Shell suggested that the studio would continue to release its films on both streaming and in theaters following the successful streaming release of “Trolls World Tour.” A few months later, the two sides struck a deal to allow the studio’s movies to be made available on premium video-on-demand after just 17 days in cinemas.

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