Q. What just happened?

On 9th December, Comcast and Warner Bros. Discovery (WBD) announced a renewal and expansion of their long-running content partnerships in the US, UK and Ireland. In the US, this signals a renewed commitment for Comcast to carry HBO and WBD’s portfolio of linear cable channels such as TNT, CNN and Discovery on its Xfinity platform. Of perhaps more importance in terms of future-facing trends, Comcast’s rights are expanded to package the ad-supported versions of Max and Discovery+ into its Xfinity streaming bundles in the future.

In the UK and Ireland, the new arrangement will provide Sky with a short-term extension to the existing HBO and pay 1 movie output deals to 2026. It is expected that by Q1 or Q2 2026 there will be a DTC launch for Max which will be bundled at no additional cost across Sky platforms, including NOW.  It coincides with a renewal of other parts of the Sky-WBD relationship such as WBD’s linear portfolio.

The considerations and likely outcomes for Sky and WBD specifically, were outlined and predicted in detail in a recent Ampere report (available to clients)

Q. Why is this significant? 

The road to reaching it has been bumpy - particularly for WBD and Sky UK - with recent wrangles over co-production deals and an evaluation of each sides’ relative importance to the other played out publicly. In the end, the short-cut turned out to be a focusing of minds around renewals in the US.  No doubt this has been the driver to agreement in the UK, a likelihood also pointed out in Ampere’s longer analysis. Hence, the significance of this deal lies in what a new era of scale - in either distribution or content - across multiple markets brings to the negotiation table.  A solution was in the interest of both parties.  

It follows WBD’s recent modus operandi of using Max rollouts to deeper integrate into the ecosystems of its key pay TV partners in international markets.  In 2024 alone this has encompassed the likes of Canal+ France, U-Next Japan and Sky NZ, in various forms, depending on the underlying dynamics and needs of the market.

At a level below pure ‘industry news’, in practical terms it means the most fervent fans of WBD content – specifically HBO content – remain connected to its IP via access on the Sky platform. And WBD is able to build up a new base of fans also, by being able ‘to go it alone’, retailing Max DTC standalone (with price points to be revealed in due course).

Q. What’s in a bundle?

Probably the trickiest element of the deal to iron out will have been the level of access Comcast’s pay customers achieve from Max. If we take the UK example, WBD’s content currently sits on various tiers, ranging from the entry-level entertainment pack of the Sky and NOW platforms for HBO series, to the more premium Sky Cinema pack for first-run and library movies. This represents a challenge in terms of simply launching an ‘app’ into a basic tier environment both from an access and carriage economics point of view. 

This is where the announcement is short on detail. Current HBO shows airing or returning on Sky will continue to be shown on Sky Atlantic and be available in Sky’s on-demand environments. So will pay 1 movies on Sky Cinema in the short term.

That the ad-supported version of Max is being utilised, with its lower price-point and ability to generate ads via instant Sky eyeballs, makes sense – a trend Ampere is seeing with bundled partnerships globally. But if this really is the full Max DTC service launching at no extra cost to all Sky customers, it will present a departure in the way premium WBD content has been positioned previously.

Moreover,  it is stated the Max app will also be seamlessly integrated into the NOW experience. This does not suggest business- as-usual for the standard NOW Entertainment pack, and most likely new price points will need to be considered, should the Max app contain a wider array of TV and movie content than previously distributed to the NOW package. Particularly given a standalone version of Max will be priced and marketed outside of Sky’s platforms at a competitive price point.

Perhaps the overarching consideration in all of this is that Sky has given up exclusivity, and the economics of the deal and carriage likely reflect all of this. And to balance this, WBD has achieved its key objective of being able to go standalone, too. For Sky, this could mean a reinvestment of programming funds saved from a non-exclusive deal into its original programing or sports rights. For WBD, we could see wider partnership announcements for Max. Recent speculation suggests the group has been discussing carriage on Amazon Prime Video. 

Q. What was missing from the announcement?

Notable in the announcement is the lack of reference to Sky’s other European territories such as Germany, Austria and Italy. The current Sky-WBD deals in these markets are understood to be either co-terminus with the UK or up in a similar time period. Perhaps these relationships are being worked through separately, but it is unusual in large partnership discussions to leave outstanding business on the table, as it invariably lessens negotiation clout for one side, in this case, probably Sky. 

Perhaps the announcement tacitly assumes Sky will be relinquishing access to WBD content in these markets and Max will simply launch DTC, perhaps retailed on Sky in these markets instead. And perhaps it points to a reduced focus from Comcast too.

The other unknown is the status of TNT, WBD’s premium sports play, on Sky and the wider market in the UK, and how this fits in with a Max DTC launch (if indeed it does, given it is a joint venture with BT). It is thought some of the Discovery assets are tied to longer term agreements on Sky, so perhaps for the short term at least, its positioning in the market will remain unaffected. 

Whilst there are undoubtedly positives for both parties in all this, inevitably a bit of news such as this simply creates more questions  - with more details to unpick in the new year.