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HBO Max Swims Against Subscription Streaming Current with Int'l Pullback

Kamikaze
Danish comedy 'Kamikaze' will be one of the films removed from key European regions as HBO Max pulls back on local content and focuses on its integration with Discovery Plus. (Image credit: Warner Bros. Discovery)

Warner Bros. Discovery will halt its ambitious international rollout of HBO Max and focus on trimming around $3 billion in costs, not to mention the huge task of integrating Discovery platforms and content. 

HBO Max, which has already deployed in 61 countries, will cease further expansion into Europe. HBO Max original content will be removed from parts of Central Europe and other regions. And HBO local productions not already in the can or in production are being scuttled. 

“As we continue to work on combining HBO Max and Discovery Plus into one global streaming service showcasing the breadth of content across Warner Bros. Discovery, we are reviewing our current content proposition on the existing services," WBD said in a statement, originally provided to Variety

The abrupt pivot from what had been just last spring a headlong expansion by HBO Max into 190 countries comes at a conspicuous time, with WBD’s key SVOD competitors — similarly troubled on Wall Street — declaring the importance of maintaining, or even expanding, wherewithal for local productions. 

For example, while revealing the bad first-quarter growth news that cratered its stock price back on April 19, Netflix also detailed a plan to rekindle expansion, including breaking with its long-held dogma to resist ad-supported models. It's also conducted several rounds of layoffs that have consumed the jobs of around 600 workers so far. 

However, Netflix staunchly declared its intention to keep expanding local production.

In fact, Netflix’s top content managers have aggressively sought to reassure content creators worldwide that it has no plans to trim a content budget set to reach $17 billion this year. 

“Netflix is now producing films and TV in more than 50 countries with a high degree of integration in the local entertainment ecosystem resulting in the creation of blockbusters from every region,” the company said in its Q1 letter to shareholders. 

Saddled with around $55 billion in debt and a market cap that’s been roughly halved since the WBD ticker symbol debuted in April, CEO David Zaslav has a differing viewpoint on content spending for the purpose of generating growth and scale. 

“We will not launch any new markets for the time being,” Zaslav said during WBD's Q1 earnings report. “We will not sort of chase aggressively behind subscriber growth as long as we are working on this priority one, which is getting these products together.”

In an email exchange with Next TV, TVREV's Alan Wolk said, "I think that Warner is likely doing a cost-benefit analysis here and deciding that producing big budget programming for markets where it is unlikely to impact subscriber or advertiser growth just isn’t worth it, that their appeal in those overseas markets is actually going to be on their American content.

"Granted, Netflix has had some success with programming from smaller markets like the Israeli series Shtisel, but it’s unclear whether that helped them to obtain or retain many subscribers outside of Israel."

Meanwhile, speaking earlier this week at Allen & Co.’s Sun Valley Conference in Idaho, he added, “The world has changed and it’s not about how much, it’s about how good.” ▪️ 

Daniel Frankel
Daniel Frankel

Daniel Frankel is the managing editor of Next TV, an internet publishing vertical focused on the business of video streaming. A Los Angeles-based writer and editor who has covered the media and technology industries for more than two decades, Daniel has worked on staff for publications including E! Online, Electronic Media, Mediaweek, Variety, paidContent and GigaOm. You can start living a healthier life with greater wealth and prosperity by following Daniel on Twitter today!