Foxtel in deal with WarnerMedia to clinch HBO content rights

Foxtel and WarnerMedia’s agreement on HBO and Warner Bros content is a big win for the Australian subscription TV provider.

A scene from the hit HBO series Game of Thrones. Picture: HBO

The streaming wars have ramped up as Foxtel locked-down a new multi-year agreement for HBO and Warner Bros programming, marking a big win for the Australian subscription television provider at the expense of Nine’s streaming rival Stan.

The new deal with WarnerMedia will include telvision shows from the Warner Bros, HBO, HBO Max and WarnerMedia networks for programs such as Game of Thrones, Succession, Big Little Lies and other comedy classics such as Friends and Big Bang Theory.

The deal is a win for subscription television service, which maintains rights to the valued HBO content ahead of local rival Stan, which had also been bidding for the content rights, with the current Foxtel deal due to run out in 2022.

It means Foxtel (majority-owned by News Corp, publisher of The Australian) will maintain Australian rights to Warner Bros and HBO content, rather than HBO Max going it alone through the US network’s own streaming service set to launch in the United States at the end of May.

The deal also gives a massive boost to Foxtel’s own entertainment streaming service – understood to be called Binge – set to launch as early as this month. It is also good news for Foxtel which has been battling a revenue squeeze and has been forced to cut staff due to structural changes away from pay television, a soft advertising market and the lack of live sport due to COVID-19 bans.

Sarah Snook in Succession.

Price and length of the new deal have not been disclosed with both parties citing the need for confidentiality for future negotiations.

The Australian understands the new deal with HBO was not finalised until Sunday night with Foxtel meeting with top senior executives at WarnerMedia, and finalising a plan that had been in train for a year.

The decision by WarnerMedia to go with Foxtel leaves rival Stan, owned by Nine Entertainment, in a position where it will be more desperate for quality content as the HBO deal with Foxtel is effectively a “winner takes all” arrangement.

Last year both Stan and Foxtel lost Disney content with the launch of Disney + in Australia, but the Warner Bros deal with Foxtel means Stan will lose more streaming catalogue content from the US entertainment giant such as Friends and The Big Bang Theory later this year.

Last year Warner took back Friends from Netflix in the US, forgoing $US80 million a year in revenue, to stream what is still most popular sitcom in the world on its HBO Max platform.

Peter Dinklage in a scene from Game of Thrones.

Stan has content deals with ViacomCBS owned Showtime till 2021, but that could be under threat if the American company tries to divert more quality content to its local free to air subsidiary Network 10 and through its streamer CBS All Access.

It also faces competition from other new rivals including Amazon Prime, Apple TV+ and Foxtel’s new entertainment streaming service launching as early as May.

Asked about new content deals on Tuesday Nine CEO Hugh Marks yesterday sounded an ominous tone about Stan winning the HBO content deal, saying “no one deal will make or break Stan.”

Foxtel Group chief executive officer Patrick Delany said the deal maintained an excellent 25-year relationship between WarnerMedia and Foxtel, but the new deal extended both the length and depth of content on offer.

“This is the first time they’ve done a deal that brings together all of their films, all of their broadcast TV, their new HBO Max material that they’re going to be producing with Warner Brothers,” Mr Delany told The Australian.

“It’s very big by volume. But importantly, it’s big by quality because this studio has been the number one studio and producing hits over a long time.

“So things like Friends and Big Bang Theory that are in their library: they come to Foxtel. We had them in linear, but they come to Foxtel for video on demand (and) go off Stan. There’s a whole lot of material that’s now going to come to Foxtel.”

Mr Delany said the “aspiration would be for streaming” all the content with the new entertainment streamer and across all Foxtel platforms.

“With our streaming ambitions and the way in which we have positioned our platforms in Foxtel and Foxtel Now we’re uniquely positioned to use all of the content.”

While HBO Max had registered a trademark in Australia and were due to launch in the US later this month, Mr Delany said the value proposition for Warner Bros to tie up with Foxtel was obviously greater.

“Max is the perfect material for paid video on demand and they channel the cable channels. We’re probably uniquely positioned to monetise it best.

“And as a result, if you can make a lot of money from a territory, then I think that’s really what the driving force behind all of this is.”

Upcoming potential hit content highlighted by Foxtel boss included the new Game of Thrones prequel, The Flight Attendant, a Gossip Girl reboot and sci-fi series Raised by Wolves.

Warner Bros Worldwide Television Distribution President Jeffrey R Schlesinger said the deal pulling together Warner Bros, HBO and HBO Max content was a “first for our company”, describing it as “a true exemplification of WarnerMedia’s international distribution strategy of putting the viewer first”.

“We look forward to the promise that this deal will offer between Foxtel and WarnerMedia, be it in the delight of audiences continuing to enjoy the quality and first-rate programming of HBO and HBO Max, Cartoon Network, Boomerang, the highly-respected journalistic excellence of CNN, award-winning and popular box-office hits from Warner Bros or first-time access to fan favourites Friends and The Big Bang Theory.”

The deal will also include a commitment to local productions with Warner Brothers.

“We also applaud Foxtel’s commitment to local production in Australia and look forward to developing an impressive slate of programs,” Mr Schlesinger said.