Warner Bros. Discovery’s post-merger growing pains and a staggering $3 billion cost savings target hit its programming strategy in Europe. diversity can reveal.
As the media conglomerate seeks to recalibrate its streaming priorities, it will stop producing originals for HBO Max in Scandinavia (Denmark, Sweden, Norway, Finland), Central Europe, the Netherlands and Turkey, and will also be removing some content from its platform release licensing deals elsewhere.
In a statement shared with diversitya spokesman for Warner Bros. Discovery said:
“As we continue to work to combine HBO Max and Discovery+ into a global streaming service showcasing the breadth of content from Warner Bros. Discovery, we are reviewing our current content offerings for the existing services. As part of this process, we have decided to remove a limited amount of original programming from HBO Max and to end our original programming efforts for HBO Max in Scandinavia and Central Europe. We have also stopped our development activities in the newer territories of the Netherlands and Turkey, which we started last year.
“Our commitment to these markets has not changed,” the statement continued. “We will continue to commission local content for Warner Bros. Discovery’s linear networks in these regions and remain significant buyers of third-party local content for use on our streaming services.”
The news, which was shared with staff and production partners on Monday morning, will come as a huge blow to both the local drama community and the respected HBO Max team in Europe, which only months ago formulated its wish list for European scripts Producers as part of a popular session at the Series Mania drama festival in late March. Some of the streaming service’s most critically acclaimed international shows to date, like Swedish sex comedy Lust and Danish family drama Kamikaze, hail from Scandinavia.
While initial development in the above areas will halt immediately, programs already in production will continue and a number of green lights that have not yet been announced are also expected to move forward. However, some of those shows can be sold to other platforms — a move that gives WBD more licensing opportunities elsewhere.
As part of the reorganization, certain European originals and some US shows will also be published worldwide by HBO Max. The Hungarian drama “The Informant” as well as “Lust” and “Kamikaze” will all be withdrawn from service.
Two areas spared from the overhaul are Spain and France, where the originals are unaffected. This is likely because Spanish-language content is doing well for HBO Max, which has a strong presence in Latin America and also serves the US market. Though HBO Max hasn’t even launched in France yet, strict French content quotas for streamers under Europe’s Audiovisual Media Services Directive mean Warner Bros. Discovery probably can’t afford to lose a strong French list.
Layoffs are likely across the European business following Monday’s shock restructuring of Originals, although specific details remain unknown.
The news will no doubt have a major reverberation across Europe, where the production sector – despite its occasional grumbling about rights – has embraced the new contracting opportunities heralded by new streaming entrants. The HBO team in particular has earned the respect of local producers for their long history of expanding European originals for the legacy brand.
HBO Max in EMEA will be led by Antony Root, executive vice president and head of original production for WarnerMedia EMEA. His team includes Johnathan Young, VP and Editor-in-Chief of Original Production for Central Europe; Miguel Salvat, who has the same role in Spain; Christian Wikander for the Nordic countries; and Vera Peltekian for France.
Priya Dogra, who is based in London and recently set up her leadership team, is President and Chief Executive Officer for EMEA, excluding Poland. JB Perrette is CEO and President of Global Streaming and Interactive while Gerhard Zeiler is President of International.
diversity expects similar decisions for HBO Max to be taking place in all territories where the streamer operates, which includes the US, Latin America and parts of Europe.
The basic idea behind the program pivot is both strategic and financial in nature. Overall, the company wants to carve out a smarter window for Discovery+ and HBO Max content before merging the services into one offering. It’s also likely that WBD will seek to leverage its intellectual property across many different global platforms and divisions of the company, rather than just through its streaming operations. Additionally, the move comes as Wall Street takes a closer look at the streaming landscape after Netflix’s subscriber numbers plummeted last quarter and its stock price took a stunning plunge.
As diversity As reported last month, WBD’s stock price has steadily declined since the combined company began trading on April 11 following Discovery’s deal with WarnerMedia. WBD’s current market cap is around $34.29 billion, but the company has around $55 billion in debt.
Analysts in June cited the need for more “clarity” regarding 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 about the company’s overall ability to grow on the other side of the synergies.”
WBD earlier this year announced a $3 billion cost savings plan within the first 24 months of the closing of the transaction. Much of this, CEO David Zaslav warned, would be due to “investment avoidance” reflected in the restructuring of the European originals.