The Discovery-WarnerMedia merger, first announced in May 2021, and having been approved by the European Commission (EC) in December, is expected to close in mid-2022. The deal could create a highly competitive subscription video-on-demand service in existing European markets, in particular the Nordics, where the companies have independently become significant market players, Ampere Analysis said in its latest report.
HBO and Discovery entered the Nordic SVOD market as HBO Nordic in 2013 and Dplay in 2014, with both services relaunching in 2021. HBO Max launched in the Nordics in October 2021 with competitive direct-to-consumer pricing, roughly 20% lower than HBO Nordic, and a new annual subscription providing twelve months access for the price of eight. It also offered a lifetime half-price subscription for customers who signed up by the end of November. Discovery, which acquired the Nordic portion of SBS Broadcasting Group in 2012 and now owns more than ten Nordic TV channels, launched Discovery+ in the region in January 2021 as part of its global rollout.
“With a combined 3.2 million subscribers across the Nordics in the third quarter of 2021, and little overlap in terms of current subscriber bases and content, there is potential for a joint service that would rival Netflix, Viaplay and Disney+ in terms of market penetration, as well as quantity and diversity of content,” commented Maria Dunleavey, Analyst at Ampere Analysis and the author of the report.
Even accounting for overlap, a joint HBO Max/Discovery+ service could boast 3.5 million subscribers in the Nordics in 2022, making it the third largest platform in the region. According to Ampere’s Q3 2021 Consumer survey, only two in five Discovery+ subscribers in the Nordics also subscribe to HBO, giving a target pool of roughly 750.000 subscribers to convert via a combined service or attractive joint package.
The combined entity would also have the second largest content catalogue in the Nordics, behind Netflix, with 43% more unique titles than local SVOD Viaplay, according to Ampere Analytics. The large catalogue would be diverse, combining Discovery and HBO’s very different content portfolios: Discovery+ has more than 90% unscripted titles, whereas HBO has 80% scripted; Discovery’s catalogue focuses largely on reality (35%) and documentary (42%), whereas HBO hosts a wider, more premium range of genres. This variety of content, including live sports, could appeal to a wide range of consumers.