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How HBO is vying with Amazon and Netflix to attract cord-cutters worldwide

How HBO is vying with Amazon and Netflix to attract cord-cutters worldwide
HBO shows in Europe include the Polish drama “Wataha,” about a guard unit that patrols the Polish border with Ukraine. (MHz Choice / TNS)

HBO has won international acclaim for "Game of Thrones." Fewer people have heard of "Mamon."

Yet the Czech drama about a journalist who uncovers evidence of fraud, implicating his brother, often gets more viewers in the Czech Republic than the famous, bloody adaptation of George R.R. Martin's novels. It's a common phenomenon that helps explain why HBO is stepping up production of original TV series in Europe and elsewhere outside the United States.

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For the first time, Time Warner Inc.'s premium channel is developing country-specific shows from Spain and Scandinavia, a sign of how the global competition for cord-cutters — people who don't subscribe to traditional cable or satellite TV services — is pushing entertainment giants to produce more foreign-language programming.

"Our local productions are in some cases No. 1 or No. 2, next to 'Game of Thrones' or 'Westworld,'" Bernadette Aulestia, HBO's head of global distribution, said in an interview, referring to HBO's other big series, a dystopian sci-fi western. "Those shows are huge drivers of the service."

But HBO is not alone — and that's also driving the expansion effort. Europe has become the new battlefield in the global streaming wars. Amazon.com Inc. recently hired its first head of original television for Europe and is developing local shows in France and Spain. Last month, Netflix Inc. unveiled seven new original series in Europe, including products from the Netherlands, France, Italy, Spain and Germany, touting some as having global appeal. A recently introduced German sci-fi thriller, "Dark," is watched nine times as much outside Germany as it is within, Netflix said.

HBO is available in 17 European countries, in many cases via traditional cable and satellite TV. But in Spain and the Nordic countries, it's available only online, making it easier to cancel if it doesn't offer enough compelling shows.

HBO's global approach has evolved from the days when it simply exported American programs such as "The Sopranos." Like their counterparts at Netflix and Amazon, HBO executives realized that to earn the loyalty of international subscribers, they needed to supplement U.S. hits with more stories of local culture in local languages and with famous local actors.

This year, HBO is creating 250 hours of original programming for its foreign subscribers, including shows, movies and documentaries — up 40% from last year. The channel will make 14 original scripted series outside the United States, up from 10 such series two years ago.

The Spanish drama "Patria" is one of them. It's based on a bestselling novel about two families during the Basque conflict — still a fraught topic in some quarters. It's being developed by one of Spain's most famous TV showrunners, Aitor Gabilondo, creator of "The Prince," a cop show that was the country's biggest prime-time series in 2016, according to Variety. Another HBO project is the Swedish comedy "Gosta," which tells the story of a child psychologist in Stockholm who moves to a rural town, rents a cottage in the woods and tries to be the nicest person in the world.

Both shows are expected to be released next year on their countries' streaming services, HBO Spain and HBO Nordic. Each of the online channels has more than 1 million subscribers and offers a mix of popular American HBO shows and acquired hits from other programmers.

Some existing HBO shows in Europe include the Polish drama "Wataha," which translates to "the pack" in English but is also known as "The Border." It's a show about a guard unit that patrols the Polish border with Ukraine. Meanwhile, in Mexico, HBO has backed "Sr. Avila," a drama that tells the tale of a hit man who struggles with personal demons. Both programs have at times drawn larger audiences in their home countries than have HBO's flagship American series.

HBO said introducing homegrown programs often leads to a surge in subscribers. From 2001 to 2004, for instance, the channel saw 16% subscription growth in Latin America. In 2004, HBO unveiled its first international scripted series, the Argentine detective show "Epitafios." Over the next four years, subscriptions in Latin America soared 53%.

To be fair, HBO's efforts abroad aren't totally new. It already gets about one-fourth of its $6 billion in annual revenue from outside the United States. The network — which may end up being owned by AT&T Inc. depending on the outcome of a U.S. antitrust fight — is available in 67 countries, including in Asia, and has 142 million subscribers worldwide, including its sister channel, Cinemax, and streaming services. By comparison, Netflix has about 125 million subscribers, and Amazon Prime has more than 100 million.

HBO executives said they believe global expansion is a two-way street, predicting that their foreign-language shows could add to their roughly 40 million U.S. subscribers. For instance, "Wasteland," an HBO series from the Czech Republic about a town whose buildings are razed by a coal company, averages about 100,000 American viewers. That's a far cry from the season finale of "Game of Thrones," which drew 16.5 million viewers, but HBO said its foreign shows are aimed at niche audiences in the United States.

For now, only a few European HBO shows are available to American viewers. But next year, the channel plans to take the unprecedented step of making its entire international catalog — about 40 series total — part of its U.S. offerings.

"What people are most interested in is the quality of the show," Aulestia said. "The barrier of language or where it was produced has gone away."

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HBO's creative push into Europe is being led by Antony Root, 64, a former Sony Pictures executive. Based in London, Root joined seven years ago with the goal of delivering what he calls "the HBO promise" — programming that is "distinctive, original, bold and having a strong point of view." Equally important, he said, are shows with a local flavor.

Root has local production heads in European countries who have deep ties with local writers, directors and producers. In the Nordic region, that person is Hanne Palmquist, who joined HBO two years ago from the Danish Film Institute. HBO's point person in Spain is Miguel Salvat, a former director of content at Canal Plus, the Spanish satellite-TV company.

"We engage with local audiences in a more intimate and profound way when we make shows that derive from the local culture, local language groups — and when they see local actors they're familiar with," Root said in an interview.

The channel's global endeavor, however, is not without hurdles. While camera crews or directors can usually be found, in some parts of Europe it's hard to find local writers. HBO executives have sought to overcome this by organizing television writing classes in European film schools, sponsoring film festivals and recruiting writers to work on local adaptations of existing shows. For example, "In Treatment," an Israeli show about a therapist that HBO adapted for the U.S. audience, has been remade in four European countries.

"It's a good way to get people to understand what our values are," Root said.

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HBO also hosts scriptwriting contests across Europe to find new talent. One recent competition in Croatia generated about 400 submissions. The winner, Marjan Alcevski, was awarded a six-episode HBO series based on his idea about four strangers who are bound together after witnessing a violent act. That show, "Success," is being made for TV by Oscar-winning Bosnian filmmaker Danis Tanovic. It went into production in March.

Smith writes for Bloomberg.

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