What’s behind HBO Max’s shift in strategy to European originals?

On July 4, Discovery shared a change in strategy for its streaming business in Europe, saying it would “discontinue our original programming for HBO Max in Nordic and Central European countries” and would now complete “our new development in Nordic and European countries.” Central.” Netherlands and Turkey, which started last year.”

The media giant said earlier this week that it had halted development of the original fare in parts of Europe following the merger, which created a new powerhouse in the industry, and “while working to unite HBO Max and Discovery+”.

HBO Max Originals in Affected Region Include Danish Family Drama kamikazeswedish sex comedy passionHungarian spy thriller informantpolish police drama Heating and Romanian comedy drama the map.

sources say the hollywood reporter that the company is also reviewing shows that are in production or post-production in Scandinavia, Central Europe and the Netherlands to see if they will be available on the HBO Max streamer or if there should be a different licensing agreement for them. The company’s initial programming efforts in Spain and France are not affected by the change in strategy, according to these sources.

The management of Warner Bros. Discovery has committed to achieving subscriber growth for the lucrative streaming service and $3 billion in cost savings following the mega-merger that created the new company. CEO David Zaslav made the same comment when contacting Allen & Co. on Tuesday. at a meeting of media and tech moguls in Sun Valley, Idaho, where he emphasized his team’s focus on creating fewer and better programs as part of their game plan.

“The world has changed, and it’s not about how much, but how well,” Zaslav told reporters, according to Bloomberg. He also suggested that the meeting would be “big” and noted that “there was a lot of business turmoil”. Zaslav added: “That means, I think, a lot of opportunities.”

Wall Street also took note of changes across the pond.

Benchmark analyst Matthew Harrigan highlighted the European content strategy update in a July 5 report, reiterating its “buy” rating and $26 price target on Warner Bros. on Discovery “After the 4th of July news. HBO Max European Originals. He added: “We believe the market downturn anxiety is overblown for Warner Bros. at Discovery’s current valuation level, even while recognizing that any market effects of accompanying ads will detract from the stock’s performance in the short term.”

Harrigan’s conclusion: “Investor sentiment in the second half of 2022 should benefit from management’s emphasis on brand and pricing strategies for HBO Max and Discovery+, as well as clarity of new pro forma finance for investors.”

Wells Fargo analyst Steve Cahal also weighed in on the European news on Wednesday. “While start-up costs have been reduced in these regions, the company expects to continue sourcing local content for its linear networks,” he wrote in the report. “Warner Bros. Discovery will also remove some original content from its platform to recalibrate its licensing agreements, meaning we can say goodbye to some European originals and some US shows leaving the HBO Max platform globally.

Cahall’s suggestion: “Management leaves no stone unturned to achieve synergies.” But he also shared a warning: “If HBO misses a movie released on Sky gomorrahLet’s take to the streets in protest.”