A UK Soft Landing For Max
Thanks to the latest deal struck with Sky UK
After France (their most challenging launch to date) and Germany (set for 2026), it was time for Warner Bros Discovery to tackle the largest European Media & Entertainment market: the UK.
It’s the final act of the HBO play “From content arm’s dealer to streamer” and it brought us a new deal with Sky UK. A win-win deal for both?
Let’s find out.
Today at a glance:
Warner Bros Discovery UK Today
What’s Coming Next?
Warner Bros Discovery UK Today
Sky UK has been the home of HBO since 2011. The MVPD even launched a channel, Sky Atlantic, to onboard HBO’s massive catalogue (along Sky originals). The ongoing output deal was struck in 2019 (the year after Comcast acquired Sky for about 39B$) and is set to expire at the end of 2025. No doubt the deal has been mutually beneficial:
→ Sky built the HBO brand locally which became central to its entertainment and sports offerings;
→ WBD reached Sky’s 17.78M customers (across UK/IE, Italy) and another estimated 5.176M in DE/AT (thanks to Gilles Pezet, NPA Conseil, for spotting the missing 5M 😅) and received hefty license fees.
As WBD entered its streaming era, it was only a matter of time before the two companies had to rethink their partnership.
They started on the wrong foot earlier this year when Sky accused (and filed a law suit) WBD of violating their coproduction agreement, a deal under which Sky was meant to be offered, each year, the opportunity to co-fund new series alongside Max (in this case the highly anticipated “Harry Potter” series).
“For each calendar year from 2021 through 2025, Sky shall be presented with all qualifying HBO MAX original series (and not less than four (4) in any event) that are: (i) one hour slot length in duration per episode; (ii) intended to be multi-season; (iii) produced by WBTV or HBO MAX for premiere on HBO MAX; and (iv) which are ordered within the applicable year to a first season (each a “Series”). Sky shall select a minimum of two (2) new Series per year.”
Extract from the Sky / WBD Co-Funding Agreement detailed in the Law suit
The claim stated Sky was losing hundreds of millions of revenues by being shut out of the series production.
“An order requiring Defendant Warner to immediately submit the Harry Potter Series for Plaintiff Sky’s consideration in accordance with the terms of the Co-Funding Agreement.”
As part of the funding, Sky would have been able to market and monetise the HP Series for the life of series (meaning its consecutive seasons) plus twenty years in its regions. Missing out on a deal with a 25B$ franchise stings especially when you’ve lost 224M£ in 2023 (doubled vs 2022).
WBD was unimpressed though and said:
“This lawsuit makes it clear that Sky is deeply concerned about the viability of its business were it to lose our award-winning content”. WBD added it would move forward “undeterred with plans to launch Max, including the new HBO Harry Potter series, in the UK and other European markets in 2026”.
For WBD, launching in the UK and Germany with a Harry Potter series is a Game of Thrones moment. No way they share the spotlight and what will be a fantastic subscriber acquisition engine.
Now, as much as WBD is determined to launch solo in the UK/IE, we’re not in 2014 so this calls for a new launch playbook.
First thing next year, Evan Shapiro and I are launching and co-hosting a new podcast: The Media Odyssey. Subscribe wherever you get your podcasts. The Odyssey debuts on Jan 2nd. Hit the link and get on board!
What’s Coming Next?
All is well under the WBD/Sky roof with the pair announcing on Monday the signature of a new deal (and the withdrawal of the law suit).
What’s in this deal?
It’s non exclusive (unlike today’s output deal) so HBO content will become available on Max when it launches and on all UK/IE platforms WBD signs a distribution deal with (giving it access to another 20M broadband potential households for Max).
Sky and Now subscribers will gain access to the ad-supported tier of Max (in France, it’s priced at 5,99€/month with 2 concurrent streams in Full HD). Are all Sky packages concerned? Discovery+ is so a quick swap makes sense (great trade-off for subscribers with access to more than Discovery+ content).
Sky Cinema will continue airing the 1st Pay TV window of WBD movies.
Cartoon Network, Cartoonito, and Boomerang will continue to be available on Sky and NOW.
What about Sky Atlantic?
The PR says “Existing franchises and their future series will continue on Sky Atlantic for Sky customers”.
In 2025 for sure but what happens in 2026 and beyond? One scenario would be that new season of series released during the output deal are broadcasted on Sky Atlantic and available via Max, and net new series are made only available on Max in the Sky bundle.
Could Sky unbundle Sky Atlantic from packages where Max with ads is included?
There’s more to Sky Atlantic than HBO content as Sky has long been producing its own originals (e.g. Chernobyl, Gangs of London, Sweet pea, The day of the jackal etc.) but the channel viewership will most likely take a hit.
And Germany, Austria and Italy: will Germans, Austrians and Italians get Max with ads for free too?
Back to the UK, what will Max in the UK look like?
They will enter the market with instant access to Sky UK and Now’s millions of subs, strong of the Harry Potter new series and perhaps bring in the TNT Sports live events in Max (a move they made in France with Eurosport).
2025 will be all about striking distribution deals with UK partners and there’s no reason why the strategy should be any different than the French one:
« As many partners as possible, as soon as possible » - Clément Schwebig, President Western Europe & Africa
Let’s check back in 2026 to see how it went for them.
That’s it for today but before you go:
Enjoy your weekend and see you next Friday for another edition of Streaming Made Easy!