Warner Brothers Discovery has announced a change of strategy for European Originals, now removing its planned original programming for the Central European and Nordic landscape, as well as pulling out of the Netherlands and Turkey, two territories they were establishing a tentative foothold in. This has been attributed to merger-related details and the upcoming combination of HBO Max and Discovery+. Entertainment attorney Brandon Blake, with Blake & Wang P.A, unpacks this news.
Potentially Different License Agreements
Shows currently in production in the affected territories may not reach HBO Max, either, as they re-examine the potential of reaching different licensing agreements. This is part of the overall promise made by the newly merged company to bring in $3B in cost savings and target only profitable subscriber growth. As has been stated before, they want to create fewer, but better, shows.
The markets have responded fairly positively to the news, seeing it as sustainable cost discipline.
Merger Questions
It also appears to be reassuring investors that existing muddy issues- such as the future branding for HBO Max and Discovery+, their pricing strategies, and long-term plans- will be a greater focus as we go into the second half of the year. Additionally, some have been asking for greater clarity from the pro-forma financials for the new entity, and feel like the restructuring will benefit these goals.
However, the company has also committed to still acquiring local content for its existing linear markets in these territories. The withdrawal is focused on original content.
It’s certainly a turbulent time in the streaming market, and the merger has created new in-house issues Warner Bros Discovery need to address with urgency. While the overall news was surprising, perhaps some time to consolidate and restructure will prove of greater benefit than chasing the content rainbow endlessly in a landscape of shifting benchmarks. We shall have to see with time.
