Johannes Larcher on HBO Max’s Global Strategy

Johannes Larcher, the head of HBO Max International, outlined the streamer’s expansion and content strategies at MIPTV today before sitting down for a keynote conversation with World Screen’s Anna Carugati.

HBO Max arrived in the U.S. in May 2020 before rolling out to Latin America the following summer, Spain and the Nordics in the fall and then a further 15 European territories. Larcher stressed the importance of being a global player in the streaming wars by using Netflix as an example, noting that the giant “is reaching saturation in the domestic market.” Growth can only come from outside the U.S., he said. In the last year, 95 percent of Netflix’s subs gains have been outside of America, Larcher noted.

Further, Larcher explained, Netflix spends about $4.50 per subscriber per month on programming. “That number is very stable.” However, Netflix’s total spend is expected to grow from $12 billion in 2021 to $21 billion in 2026. That additional $9 billion “buys a lot of content—almost 700 episodes of The Crown, almost 50 Spider-Man: No Way Home movies. That ability to spend more on content on behalf of fans drives the need to go global. You can only afford that content spend if you can leverage the investment over an ever-larger number of subscribers. That’s why all of us in this race are going global.”

HBO Max had 27 million subs by the end of 2021. “Most of our growth has now started to come from outside the U.S.”

Larcher said he sees the streaming wars as a “three-horse race; there are really three, four or five streaming services competing for global market share. We have every ambition to be one of the three leading players globally.”

Home to WarnerMedia brands such as HBO, DC, Cartoon Network and Warner Bros., HBO Max features a slate of originals that serve to “expand the appeal of our service to a broader, more diverse, younger audience.” Acquisitions are also part of the mix, such as The Handmaid’s Tale in Scandinavia and partnerships with NBCUniversal in Asia and Sony Pictures in Latin America. “We are an active buyer of great content.”

Larcher went on to note, “One of the things we invest in is regionalized curation of content. We have AI, machine learning and algorithms that serve content that may be relevant to you. But we also believe humans have to play a role in finding and recommending content. We do that on a local basis. We have teams all over the world selecting content.”

HBO Max is also customizing its content lineup for specific regions, such as Champions League in Brazil and Mexico. A recent match landed 5.5 million viewers. “It performs well, it’s engaging and it’s acquisitive.”

HBO has long produced content in Europe, LatAm and Asia, Larcher added. “We are doubling down on that in the context of HBO Max. We’re investing more money, and we’re producing more shows. In Europe, we’re going from ten original shows in 2019 to a development pipeline for 2023 that includes about 40 shows in total. And we’re broadening what we’re doing. It’s not only scripted series—we’re also producing more unscripted content.”

Following his presentation, Larcher sat down for a keynote conversation with Anna Carugati, group editorial director of World Screen. He noted that HBO Max is intended to be a general entertainment service that can appeal to everyone, broadening the proposition beyond what HBO has been known for. Currently in 61 countries, HBO Max aims to be in 190 countries by 2026, Larcher said. “We’re going as fast as we can. We’re doing it in a phased manner that is responsible and capital efficient. But we will get there. It’s not about being number one or beating anyone; it’s about creating a service that serves our customers and can do so for the long term—and profitably.”

Elaborating on the importance of local content, Larcher noted, “To succeed, we have to be in tune with our customers. Consumer preferences vary country by country. Consumers around the world love American content, but they also like stories that reflect their own realities and aspirations.”

Addressing the pending WarnerMedia-Discovery merger and how that will impact HBO Max and discovery+, Larcher said, “The audiences and the content are quite complementary. From that standpoint, we couldn’t be more excited. We have a shared vision of what the service should be in terms of the product, the packaging and how we go to market. Everything else will have to wait till the merger is complete.”