Warner Bros. Discovery shared a change of strategy for its streaming business in Europe on July 4, saying that it would be “ceasing our original programming efforts for HBO Max in the Nordics and Central Europe” and had already ended “our nascent development activities in the newer territories of Netherlands and Turkey, which had commenced over the past year.”The media giant said at the start of the week that it had halted the development of original fare in parts of Europe following the merger that created the new industry powerhouse and amid its “work on combining HBO Max and Discovery+.”HBO Max’s originals in the affected region include the likes of Danish family drama Kamikaze, Swedish sex comedy Lust, Hungarian spy thriller The Informant, Polish crime drama The Thaw and Romanian comedy drama Ruxx.Sources tell The Hollywood Reporter that the company is currently also reviewing shows that are in production or postproduction in the Nordics, Central Europe and the Netherlands to figure out whether they will be made available on streamer HBO Max or if a different licensing arrangement should be struck for them. The firm’s original programming efforts in Spain and France are not affected by the strategy change, according to those sources.Management at Warner Bros. Discovery has promised to target profitable streaming subscriber growth and $3 billion in cost savings after the megamerger that created the new company. CEO David Zaslav picked up on the same theme when he arrived at the Allen & Co. gathering of media and technology moguls in Sun Valley, Idaho, on Tuesday, emphasizing his team’s focus on creating fewer, better shows as part of its game plan.“The world has changed, and it’s not about how much, it’s about how good,” Zaslav told reporters, Bloomberg reported. He also suggested that the gathering would be “great,” pointing out that there was “lotta turmoil in the business.” Zaslav added, “that means, I think, a lot of opportunity.”Wall Street has also taken note of the changes across the pond.Benchmark analyst Matthew Harrigan in a July 5 report highlighted the European content strategy update, reiterating his “buy” rating and $26 price target on Warner Bros. Discovery “following July 4th news that management is moving fast on cost discipline for HBO Max European originals.” He added: “We believe the market’s recession angst is overbaked at Warner Bros. Discovery’s current valuation level, even recognizing any concomitant advertising market fallout would dampen near-term stock performance.”Harrigan’s conclusion: “Investor perception in the second half of 2022 should benefit from management delineation of HBO Max’s and Discovery+’s branding and pricing strategies, as well as clarity from new pro forma financials for the reconfigured WarnerMedia and Discovery businesses.”On Wednesday, Wells Fargo analyst Steve Cahall also chimed in on the European news. “While original spend is curtailed in these regions, the company expects to continue acquiring local content for its linear networks,” he wrote in a report. “Warner Bros. Discovery is also reportedly removing some original content from its platform to recalibrate licensing deals, meaning we can wave goodbye to certain European originals and some U.S. shows that will be leaving the HBO Max platform globally.”
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