After the recent merger, Warner Bros. Discovery is targeting two key things, profitable streaming subscriber growth and $3 billion in cost savings. To achieve the latter, the company is adjusting its programming strategy for the streaming service HBO Max in several parts of Europe.
The company has confirmed that it won’t
produce originals for HBO Max in the Netherlands, the Nordics, Turkey, and
Central Europe. Among the originals that won’t be produced in these regions are
the likes of the Danish family drama Kamikaze.
The streamer will also remove “a limited
amount of original programming” so that it can free up licensing deals.
In a statement, the company 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.”
The statement continues, “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. 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.”
Despite these changes, the original
programming efforts of the streamer in France and Spain are not affected. The
changes won’t likely affect the legacy Discovery business or even the
free-to-air networks of the company.
Projects that are already in production or
have been approved already will likely continue. However, they might be sold to
other platforms while Warner acts as producer only. Some European originals and
US shows will also come off HBO Max globally. Hungarian drama, The Informant,
Lust, and Kamikaze will be
removed from the service. Streaming content production has been a bright spot
in Europe, but that is also likely to change shortly.
Wall Street Matters
The move from the streaming company comes
at a time when Wall Street is taking a harder look at the streaming landscape
following Netflix’s loss of subscribers in the last quarter, which led to a
huge plummet in stock price.
Things have not been well for WBD also, as
WBD’s share price has dropped continually since the combined outfit started
trading on April 11. The current market cap of WBD stands at about $34.29
billion. However, it must be noted that the company has a debt load of around
$55 billion.
In June, analysts cited the need for more
“clarity” around the media conglomerate’s direct-to-consumer strategy. Analysts
from J.P. Morgan noted, “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.”
Sources:
https://www.hollywoodreporter.com/business/business-news/hbo-max-halts-originals-production-europe-1235175293/
https://www.engadget.com/hbo-max-halts-original-productions-across-large-parts-of-europe-130226456.html
https://variety.com/2022/tv/global/hbo-max-europe-originals-development-1235308730/