The growth of Warner Bros. Discovery’s post-merger and impressive cost-savings target of $3 billion is affecting its programming strategy in Europe, Variety revealed.
As the media conglomerate seeks 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 your platform to release licensing deals elsewhere.
In a statement shared with Variety, a spokesperson for Warner Bros. Discovery said:
“As we continue to work to combine HBO Max and Discovery+ into one global streaming service, showcasing the breadth of content at Warner Bros. Discovery, we are reviewing our current content offering for existing services. As part of this process, we have decided to remove a limited amount of original programming from HBO Max, as well as to end our initial HBO Max programming efforts in the Nordics and Central Europe. We also discontinued our nascent development activities in the newer territories of the Netherlands and Turkey, which had begun in the past year.
“Our commitment to these markets has not changed,” the statement continued. “We will continue to commission local content for Warner Bros. linear networks. Discovery in these regions, and we remain significant buyers of local third-party content for use in our streaming services.”
The news, which was shared with staff and production partners on Monday morning, will come as a blow to the local drama community, as well as the respected HBO Max Europe team, which only months ago formulated its wish list for Europe’s scripted producers as part of the high-demand session at the Series Mania drama festival at the end of March. Some of the streaming service’s most acclaimed international shows to date, such as Swedish sex comedy Lust and Danish family drama Kamikaze, come from the Nordic countries.
While initial development will be halted immediately in the aforementioned territories, programs already in production will continue, and it is understood that a number of yet-to-be-announced greenlights will also move forward. However, some of those shows may be sold to other platforms, a move that gives WBD more licensing opportunities elsewhere.
As part of the restructuring, some European originals and some American shows are also leaving HBO Max globally. Hungarian drama The Informant, as well as Lust and Kamikaze, will be removed from the service.
Two territories spared from the overhaul are Spain and France, where the originals will not be affected. This is likely due to the fact that Spanish language content distributes well for HBO Max, which has a large footprint in Latin America and also serves the Spanish-speaking market in the US. Meanwhile, while HBO Max hasn’t even launched in France yet, strict French content quotas for streamers under Europe’s rule-changing Audiovisual Media Services Directive mean a strong French slate is unlikely to be something Warner Bros. Discovery can afford to lose.
Following the originals’ shock restructuring on Monday, there are likely to be layoffs across the European business, although specific details are not yet known.
The news will no doubt have huge repercussions across Europe, where the production sector — despite its occasional gripes about rights — has embraced the new commissioning opportunities announced 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 vice president and head of original production for WarnerMedia EMEA. His team includes Jonathan Young, vice president and managing editor of original production for Central Europe; Miguel Salvat, who has the same role in Spain; Christian Vikander for The Nordic Countries; and Vera Peltekian for France.
Priya Dogra, who is based in London and recently established 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 Seiler is President of International.
Variety understands that similar decision-making for HBO Max is currently taking place in all territories where the streamer operates, which includes the US, Latin America and parts of Europe.
The rationale behind programming is both strategic and financial. Overall, the company wants to create a smarter window for Discovery+ and HBO Max content before the services are integrated into one offering. It’s also likely that WBD will seek to use its IP across many different global platforms and company divisions, not just through its streaming operation. Additionally, the move comes as Wall Street takes a closer look at the streaming landscape following Netflix’s subscriber decline last quarter and its stunning share price decline.
As Variety reported last month, WBD’s share price has steadily declined since the combined company began trading on April 11 following the close of Discovery’s deal for WarnerMedia. WBD’s current market capitalization stands at about $34.29 billion, but the company has debts of about $55 billion.
Analysts in June cited the need for more “clarity” around the media conglomerate’s direct-to-consumer strategy, with JP 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 we are growing collectively on the other side of the synergy.”
WBD announced earlier this year a plan to save $3 billion in costs in the first 24 months after the deal closes. Much of that, CEO David Zaslav warned, will come from “disinvestment” reflected in the restructuring of European originals.
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