Warner Bros. Discovery’s plans to merge streaming services HBO Max and Discovery Plus in the U.S. is likely to be adopted overseas, and a clearer picture is emerging of what the platform will look like in key markets.Sources tell Variety that Discovery and AT&T’s WarnerMedia — which are expected to merge in the next month — plan to have one single global platform that will combine the two streaming services, as opposed to a market-by-market approach for international.Discovery CFO Gunnar Wiedenfels, who will also serve as CFO of the newly combined Warner Bros. Discovery, confirmed preparations to combine the two streamers during the Deutsche Bank Media, Internet & Telecom Conference on Monday. This marked the first time the company has revealed its post-merger strategy for Discovery Plus and HBO Max, amid speculation that they could remain solo platforms with bundling options.Discussing the global plans for the combined company, Wiedenfels said that both companies’ “international footprints are actually quite nicely complementary.”“We’re both pretty strong in Latin America, but with different focus areas, so that’s going to be a great combination,” said Wiedenfels. “In Europe, arguably, Discovery is more relevant and stronger in its presence with a lot of free-to-air operations in some of the key markets. WarnerMedia may have sort of a leg up in the Nordics.”Notably, the executive suggested that sports rights will be a crucial pillar for the combined service in the U.K., where an existing licensing deal between WarnerMedia and Sky means that key HBO Max entertainment content won’t be freed up for the new platform until 2025. Playing an important role in the sports offering is BT Sport, which could be combined with Discovery’s Eurosport as part of a proposed joint venture.“This BT Sports joint venture is a great example because it really creates an opportunity for upsides, getting us access to important Champions League rights in the U.K. and will create significant upside opportunity for a combined sports and Discovery Plus package at a time when HBO Max is still encumbered by long-term licensing deals,” said Wiedenfels.“They’re great opportunities strategically but also come with very limited financial downsides. Those are the deals that really make sense.”Elsewhere during the conference, Wiefendels said that “direct to consumer internationally is going to be an exponentially better business for us than the linear world, because we’re coming from a market that has so far been defined in some countries as 15%-20% of households [having] pay TV, and we had a share of that market. Now, all of a sudden, with direct to consumer, you’re able to address essentially the entire population, and from a distribution partnership perspective, you’re opening yourself up to mobile distributors etc.”Wiedenfels also highlighted the competitive SOVD subscription prices in certain international markets.“With every [direct to consumer] subscriber that you capture in that new world, you’re getting an enormous uplift in your per-subscriber pricing, and that’s why these economics worked out, and why it’s such an important starting point that we have operations in all these markets, and local productions in all these markets.”The executive underlined that success in the current landscape — as opposed to 10 years ago — will be defined by scaling a profitable direct-to-consumer business, which “is impossible without a very, very strong international presence.”Continued Wiedenfels: “So our vantage point here could not be better because we are covering virtually every key territory globally. And what’s going to be very, very important for competing in these markets is that we have been producing local content across the entertainment scripted, non-scripted, news, sports for many, many years. So we’re really getting a head start there when it comes to sort of expanding and ramping those capabilities.”Discovery reported 22 million worldwide streaming customers at the end of 2021. Meanwhile, HBO Max and HBO ended 2021 with a combined 73.8 million global subscribers. Wiedenfels didn’t provide any pricing guidance around how much the combined streaming platform would cost consumers, but did note that Warner Bros. Discovery will introduce both ad-free and ad-lite products.The $43 billion Discovery-WarnerMedia deal is still set to close early in the second quarter, following Friday’s approval vote from Discovery shareholders. As previously reported by Variety, insiders suggest the specific time frame being targeted is April 11-28.
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