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Wednesday, July 6, 2022

HBO Max Halts Original Programming In Parts Of Europe In Major Restructure

Warner Bros. Discovery’s post-merger growing pains and an eye-watering $3 billion cost-savings target are hitting its programming strategy in Europe.

As the media conglomerate looks to recalibrate its streaming priorities, it will no longer produce originals for HBO Max in the Nordics (Denmark, Sweden, Norway, Finland), Central Europe, the Netherlands and Turkey, and will also remove some content from its platform in order to free up licensing deals elsewhere.

In a statement, a spokesperson for Warner Bros. Discovery said:

“As we continue to work on combining HBO Max and discovery+ into one global streaming service showcasing the breadth of content across Warner Bros. Discovery, we are reviewing our current content proposition on the existing services. As part of this process, we have decided to remove a limited amount of original programming from HBO Max, as well as ceasing our original programming efforts for HBO Max in the Nordics and Central Europe. We have also ceased our nascent development activities in the newer territories of Netherlands and Turkey, which had commenced over the past year.

 

“Our commitment to these markets has not changed,” the statement continues. “We will continue to commission local content for Warner Bros. Discovery’s linear networks in these regions and we remain substantial acquirers of local third-party content for use on our streaming services.”

The news, which was shared with staff and producing partners on Monday morning, will come as a heavy blow to the local drama community as well as the well-respected HBO Max team in Europe, which just months ago articulated its wish list for Europe’s scripted producers as part of a high-demand session at drama festival Series Mania in late March. Some of the streaming service’s most lauded international shows to date, such as Swedish sex comedy “Lust” and Danish family drama “Kamikaze,” come from the Nordics.

While original development will be halted immediately in the aforementioned territories, programs that are already in production will continue, and it’s understood a number of green lights that haven’t yet been announced will move ahead, too. However, some of these shows may be sold to other platforms — a move that provides WBD with more licensing opportunities elsewhere.

As part of the restructure, certain European originals and some U.S. shows are also coming off HBO Max globally. Hungarian drama “The Informant” as well as “Lust” and “Kamikaze” will all be removed from the service.

Two territories that are being spared the overhaul are Spain and France, where originals won’t be affected. This is likely due to the fact that Spanish-language content travels well for HBO Max, which has a big footprint in Latin America, and also serves the U.S. Hispanic market. Meanwhile, though HBO Max hasn’t yet even launched in France, strict French content quotas for streamers under Europe’s game-changing Audiovisual Media Services Directive mean that a strong French slate is unlikely to be something Warner Bros. Discovery can afford to lose.

Following Monday’s shock restructure of originals, redundancies are likely across the European business, though specific details are still unknown.

The news will undoubtedly have vast reverberations across Europe where the production sector has — despite its occasional grumblings about rights — embraced the new commissioning opportunities heralded by new streaming entrants. The HBO team, in particular, has earned the respect of local producers given its long tenure expanding European originals for the legacy brand.

HBO Max in EMEA is led by Antony Root, executive VP and head of original production for WarnerMedia EMEA. His team includes Johnathan Young, VP and commissioning editor of original production for Central Europe; Miguel Salvat, who has the same role in Spain; Christian Wikander for the Nordics; and Véra Peltekian for France.

Priya Dogra, who is based in London and recently set out her leadership team, is president and managing director for EMEA, excluding Poland. JB Perrette is CEO and president of global streaming and interactive, while Gerhard Zeiler is president of international.

The media understands that similar decision-making for HBO Max is currently taking place in all territories where the streamer operates, which spans the U.S., Latin America and parts of Europe.

 

The rationale behind the programming pivot is both strategic and financial. Overall, the company wants to hammer out a more intelligent window for Discovery+ and HBO Max content ahead of the services being integrated into one offering. It’s also likely that WBD will look to leverage its IP across many different global platforms and divisions of the company rather than solely via its streaming operation. Further, the move comes as Wall Street takes a harder look at the streaming landscape following Netflix’s subscriber tumble last quarter and stunning plummet in stock price.

WBD’s share price has steadily dropped since the combined outfit began trading April 11 following the close of Discovery’s deal for WarnerMedia. WBD’s current market cap stands at around $34.29 billion, but the company has a debt load of around $55 billion.

Analysts in June cited the need for more “clarity” around the media conglomerate’s direct-to-consumer strategy, with J.P. Morgan analysts noting: “WBD has the assets and potential cost savings to reinvest in DTC, but we are skeptical of the company’s ability to grow in aggregate on the other side of synergies.”

WBD announced earlier this year a cost-savings plan of $3 billion within the first 24 months of the deal closing. Much of that, CEO David Zaslav warned, would come from “investment avoidance,” which is reflective in the European originals restructure.

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