Warner Bros. Discovery’s (WBD) own Over-the-top (OTT) roll-out in Europe is difficult to keep up with. Seemingly fragmented and lengthy, it reflects how Europe received a secondary focus, while the top priority post-merger was to launch a unified product for the US market. Together with significant budget and partnership constraints, the newly formed entity went for a highly country-specific go-to-market strategy. An impressive content lineup supported MAX’s 2024 launch on the continent. Eurosport’s access to the Paris Olympics funneled massive engagement to the platform, which made up 80% of the channel’s viewing time. Strong IPs also launched throughout the year, from House of the Dragon, to the Barbie movie, and recently the Soprano's and Dune’s spin-offs. Although gaining momentum on the content side, the returns on this OTT roll-out remain difficult to assess in the short term. They compete with hidden revenue streams, notably distribution partnerships, and are to be set against the overall platform investments, from content to tech and marketing. With limited corporate disclosures, the impact of these efforts will only become apparent through the long-term financial health of the conglomerate. Halfway into its journey, we can however assess WBD’s current market position. WBD’s country-specific approach left most markets out of their reach Central and Eastern Europe (CEE) and the Nordics account for about two-thirds of WBD’s European subscriber base, with the top five markets and smaller Western countries only making up the remaining 30%. This uneven penetration across the continent results in Europe holding a modest share of WBD’s global OTT business, with North and Latin America contributing far more to its portfolio relative to their size in the global market. Moreover, Europe would be even more marginal was the company better established in Asia. Strategy resulted in different scenarios depending on the region Analyzing MAX’s footprint by country, 4 main groups can be identified. CEE’s numerous countries, with lower ARPU and varying penetration, but relatively high for the region Nordics with high ARPU, high penetration Spain & Portugal with limited penetration New top 5 markets (France & Belgium) The situation is most fragmented among the Western countries. The earliest DtoC development started with much ambition in Spain and the Nordics in 2020, before the merger and about the same time as Disney+ entered those markets. The plan played out well in the Nordics, with the service now covering more than 20% of households. Although it did not face more competition in the Iberic peninsula, the market proved less dynamic and prone to stacking. Spain reached 0.8 subscription per household only in 2023, when Nordics had passed this mark even before the pandemic, and currently stands at twice that. Although met with two different trajectories, both regions...
