At a time when global streamers have been pushing local originals overseas, Warner Bros. Discovery’s decision to cease all new local fare for HBO Max in the Nordics, Central Europe, Holland and Turkey has come as a rude shock to the international industry.
Variety revealed last week that HBO Max, which began its international rollout in June 2021, is halting all development of originals in the aforementioned territories and removing some locally produced shows from the platform in order to relicense the titles elsewhere. Markets where originals have been spared are Spain and France — the latter where HBO Max has yet to launch.
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The pivot, which Warner Bros. Discovery attributes to a companywide $3 billion cost-savings measure, has astonished the industry, mainly because HBO Nordic has been an entrenched and respected brand in Europe for 10 years. What’s more, recent HBO Max international hits such as “Lust” and “Kamikaze” (pictured) originated from Denmark and Sweden, respectively. Meanwhile, HBO Max only launched in the Netherlands in March, and hasn’t even debuted in Turkey, with executive leadership for the latter country announced earlier this year.
Sources tell Variety that the latest international strategy came from top U.S. as opposed to European leadership, which has been restructured since the WarnerMedia-Discovery merger closed in April. Regardless the origin, some predict it’s only the beginning of “an enormous amount of carnage” for streaming services that are suddenly finding themselves accountable to Wall Street.
WBD has “figured out that, actually, the only axis they need to pay attention to, given the importance of these businesses and their core markets, is — No. 1 — the U.S., then the U.K., Germany and France,” says Claire Enders, founder of leading London-based media consultancy Enders Analysis.
“There isn’t any other place they need to play,” she adds. This axis “drives their business to an extraordinary extent, and they can have much thinner services elsewhere. It’s absolutely the right strategy.”
Such a narrow focus on originals, however, doesn’t necessarily make sense for a nuanced market like Turkey, which is known internationally for widely traveling programming and formats. Izzet Pinto, CEO of leading Turkish distributor Global Agency, says the decision is a “big mistake.”
“When we look at other competitors like Disney+ and Netflix, they recoup almost all their investment from international viewership. Turkish drama is a big, big brand on its own,” explains Pinto. “When you order a local series in Turkey, you get so much viewership worldwide.”
Indeed, Netflix said last year that Turkish originals and licensed titles on the service — such as “The Protector,” “Ethos,” “The Gift” and “Love 101” — scored more than 75% of views during their first four weeks from households outside Turkey.
In Norway, Ivar Køhn, CEO of Banijay Group-backed “Beforeigners” producer Rubicon, found out his acclaimed time-travel drama was coming off HBO Max to be relicensed elsewhere just hours before the news broke publicly.
“We’d heard from some viewers who were looking for the show and couldn’t find it, and then we had a call from HBO Nordic,” he says. “It was a big surprise for us.”
Køhn says it’s a “pity” the show has been pulled, given it was produced “with the kind of quality we connect with HBO.” However, the producer says HBO’s exit from Denmark, Sweden, Norway and Finland doesn’t have a massive commercial impact since the SVOD’s output never matched that of Netflix or domestic player Viaplay, which will now benefit from one less competitor. The loss, according to a former HBO commissioner in Europe, is more symbolic given the brand’s pristine reputation among creatives.
“HBO commissioned original, high-quality titles and gave creative talent freedom and time to develop these shows, and with great love and a passion for storytelling,” says the commissioner. “This will be terribly missed.”
The fear, warns the commissioner, is “if WBD’s decision not to focus on local-language content — other than English, Spanish and French — is a strategy that other streamers will fully or partly follow.”
However, knee-jerk reactions by other SVOD players, at least in the short term, are unlikely. The day after HBO Max revealed its European pivot on originals, Netflix not-so-subtly unveiled a new Swedish original film with “Beforeigners” star Hedda Stiernstedt in a leading role.
Furthermore, don’t count out scripted programming from the Nordics just yet. Weeks after the WarnerMedia and Discovery deal closed in early April, the company appointed Rebecca Medbøe, a former editor-in-chief at Nordic public broadcaster NRK and consultant for Discovery, as its head of scripted for Warner Bros. Discovery in the Nordics. The executive will begin her role in August.
Enders, however, says expectations of the global streamers in Europe should be kept in check as time runs out on a “bonfire of capital.” The proof that the balance is already shifting, she suggests, is in HBO Max’s plan to relicense originals like “Beforeigners” to other broadcasters and platforms.
This could, in fact, mean that the HBO-Sky output deal for the U.K. — the legacy agreement that has so far prevented HBO Max from launching in Britain — could still be extended, in some form, beyond its 2025 expiry.
“All that mystery of, ‘Are HBO and Sky going to sign a new deal?’ ‘Is pay TV going to die in Europe?’ Well, that question is over,” says Enders. “There isn’t going to be the death of pay TV. These companies are going to be relicensing material that their aged 50-something audiences are really going to enjoy.”
Enders continues: “Anyone who thought that streaming would become the majority behavior by 2020, or indeed 2025, was simply crackers. There is a ridiculous over-optimism over streaming, over the capital markets’ willingness to fund this bonfire forever, and on the existence of 100 times the number of valuable scripts in the world in 2022 than what was possible in 2020.”
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