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HBO Max Uses Competitor Netflix As Example for Global Expansion

Lauren Forristal

At a Mip TV keynote in France on Tuesday, HBO Max Global Boss Johannes Larcher pointed to Netflix’s global expansion efforts, saying that it is a motivating factor for HBO Max. The former Hulu exec highlighted the growth in Netflix’s international subscribers from 147 million in 2021 to a projected 266 million in 2026.

“Netflix is clearly reaching saturation in the domestic market,” Larcher said in his presentation. “Where will growth come from? Only one place: outside the U.S.”

HBO Max is now available in 61 territories globally. In March, it launched in 15 new European countries, including Hungary, Poland, the Netherlands, Portugal, and Romania. The streamer is experimenting with a “basic tier” in the Netherlands.

The streaming service is set to launch in more countries later this year such as Turkey, Greece, Iceland, Estonia, Latvia, and Lithuania. In addition, plans for further expansion to Southeast Asia have also been announced. HBO Max also has introduced a mobile-only tier in Latin America.

However, many countries in Europe are still unable to stream HBO Max as the U.K., France, and Germany are still contracted to existing HBO pay-TV distribution deals. Additionally, Netflix recently increased its subscription prices in the U.K. and Ireland, angering fans.

The U.K. is Netflix’s biggest production hub outside of the U.S. and Canada, and in 2020, the country had a content budget of $1 billion. According to Ampere Analysis, there are approximately 14 million Netflix subscribers in the U.K. and 600,000 in Ireland.

In his keynote, Larcher noted that about 90% of HBO Max’s growth is now forecast to come outside of the United States and that the streamer plans to increase original European content production from 10 programs in 2019 to 40 shows by next year. In terms of total percentage of its offerings, Netflix’s foreign library expanded from 25% in 2019 to 31% in 2021.

Larcher also pointed out Netflix’s aggressive content spend, which he estimates to spike from $12 billion in 2021 to a whopping $21 billion by 2026.

“Nine billion additional programming dollars buys a lot of content,” Larcher said. “That buys you almost 700 episodes of ‘The Crown,’ 50 ‘Spider-Man: No Way Home’ movies. That ability to spend more on content on behalf of fans drives the need to go global.”

A streamer can only afford such a sheer level of content spend “if you can leverage the investment over a larger number of subscribers. That’s why all of us desire to go global,” he added.

Larcher uses the other competitors as an example, saying that instead of “parachuting the U.S. HBO Max into different countries,” his team is giving a personalized and tailored service to different territories based on their viewing and buying habits. “There are slight variations on how we position our brand market by market.”

Lastly, the executive believes that with the WarnerMedia-Discovery merger expected to close on Monday, April 11, it will help HBO Max reach its international expansion goals more quickly than the streamer would have been able to on its own.

“It will diversify our content, our service.,” he said. “We have a shared vision of what the product should be in terms of packaging and how we go to market.”

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