Sky and HBO are fighting over Harry Potter – here’s what it means for you (2024)

Liam Kelly

Sky and HBO are fighting over Harry Potter – here’s what it means for you (1)

The Warner Bros studio in Burbank, California, has seen more than its fair share of stars and, as David Zaslav gathered his investors there, he hoped some of that Hollywood sparkle would rub off on him.

The embattled chief executive of Warner Bros Discovery (WBD) needed some magic and conjured a wizard. It was April 2023 and he proudly announced that he had commissioned a blockbuster new Harry Potter TV series, to be shown over the course of 10 years, to boost the streaming service Max (née HBO Max).

This new adaptation of JK Rowling’s novels was hyped as having “a new cast to lead a new generation of fandom, full of the fantastic detail, much-loved characters and dramatic locations that Harry Potter fans have loved for over 25 years”. It is sure to be a lucrative mega-hit when it premieres.

Almost 9,000 miles away, in West London, Zaslav’s announcement set off alarm bells. Executives at Sky were blindsided by the news — and it proved the trigger for a bitter legal battle that could have ramifications for how Brits watch TV in the future.

The British broadcaster filed a lawsuit in New York last month that accuses WBD of failing to uphold its end of a co-production agreement struck as part of a wider deal for HBO programmes — such as Succession and House of the Dragon —to be shown on Sky channels. That deal expires at the end of next year.

Sky and HBO are fighting over Harry Potter – here’s what it means for you (2)

Sky claims that WBD kept its plans for a Harry Potter series secret so that it could be the cornerstone of Max when it launches in Sky’s European territories — includingthe UK, Germany and Italy—in 2026. “This design to allocate WBD’s best and most desirable content to Max in Sky’s markets is exactly what the co-funding agreement was intended to prevent,” Sky said. It has asked the American judge to enforce the contract and give it the opportunity to co-produce the Harry Potter series, potentially worth hundreds of millions of pounds over the next 30 years, as well as costs and damages.

The case cuts to the heart of how TV production and streaming are rapidly evolving — as well as showing how desperate media giants are to secure exclusive shows that will attract, and hold onto, subscribers.

When Max launches in the UK it will be entering an already-crowded marketplace. People who have advertising-free subscriptions to all of Netflix (£10.99 per month), Disney+ (£7.99), Amazon Prime (£8.99 per month for TV and free delivery), Apple TV (£8.99) and Paramount+ (£6.99) will have to fork out £44 each month. Including the BBC licence fee (£169.50 per year) or a basic Sky subscription (from £28 per month) means that viewers can easily spend more than £1,000 annually if they want to have the choice to watch whatever they want on TV. Max currently costs Americans $16.99 (about £13) per month to watch without adverts and, as HBO shows are favourite talking points of the chattering classes, it is likely to have a similar price point when it launches in the UK.

This Balkanised system does viewers no favours, especially as inflation has squeezed disposable incomes and households are cutting back. It can already be confusing enough watching HBO shows in the UK, as co-productions with domestic broadcasters tend to be shown on those channels (such as Industry on the BBC) but they tend to be shown weeks or months later here than on the other side of the Atlantic. Other shows, such as the HBO Max series Hacks, appear on Prime Video almost at random.

Sky and HBO are fighting over Harry Potter – here’s what it means for you (3)

In a tacit acknowledgement that something has to change, Britain’s traditional broadcasters are said to be in talks about putting programmes from commercial channels on BBC iPlayer to take on the likes of Netflix.

While Harry Potter is the casus belli between Sky and WBD, there are much bigger issues at stake than the fate of the Boy Who Lived. Mike Darcey, formerly Sky’s chief operating officer, described the lawsuit this week as a “battle for the ages, one that has been brewing for several years and is almost impossible to call” the winner of.

“This tends to be the case when two parties need each other to a material degree, have few other good options, and for good reasons start a long way apart,” he wrote in a blog post. “Sometimes there just is no easy middle ground and someone has to blink. In this scenario, the personalities and egos might matter more than the numbers.”

Sky and WBD do need each other: a present, Sky gets access to HBO’s programmes, while WBD gets guaranteed income for its shows in the UK without having to distribute them itself. It has been the case for more than a decade and, by all accounts, has been a success for both sides.

The Max expansion plans changed everything. Suddenly, WBD was not just a content supplier to Sky, but a rival that is fishing in the same pool for subscribers. If Sky were to lose the case, and its relationship with WBD soured to the extent that it was unable to strike another deal to show new HBO programmes on its channels, it would be a huge blow and arguably leave the broadcaster overly reliant on its Premier League football rights.

Sky and HBO are fighting over Harry Potter – here’s what it means for you (4)

The importance of HBO programmes, such as House of the Dragon or The White Lotus, to Sky is underlined by the lacklustre impact of Sky’s own original shows. “Their track record of creating programming that cuts through has been underwhelming. They have spent a lot of money and made a lot of shows that haven’t really entered the public consciousness,” says Tom Harrington, head of TV at the Enders Analysis consultancy. “And they have a big subscriber base, a lot of people who have access to it, but you can count on one hand the shows which have really cut through.”

Shows such as Gangs of London and Brassic are, by the standards of Sky original shows, relatively popular, and the broadcaster has high hopes for The Day of the Jackal, starring Eddie Redmayne and James Bond star Lashana Lynch, and Ella Purnell’s Sweetpea. “You only need one or two shows to turn a corner and shift perception,” says Harrington.

One source of relief to Sky is that, regardless of what happens in the legal case, it will have the rights to HBO shows that have already been shown on its channels, such as House of the Dragon and other Game of Thrones spin-offs.

The stakes are also huge for WBD, which has flailed since Warner Bros was spun off from AT&T and merged with Discovery two years ago. It is desperate for hits, especially after a succession of cinematic flops of which Joker: Folie à Deux is just the most recent.

Sky and HBO are fighting over Harry Potter – here’s what it means for you (5)

Zaslav has staked a huge amount on making Max work as a premium streaming service, and sees the UK as an obvious place to rack up subscribers.

Yet Max is going to launch here four years after Paramount+ and a full 12 after Netflix started streaming in the UK. Paramount+ has found it difficult to build a subscriber base, given the wealth of other streaming options, with about 2.6 million customers in Britain. But about a million of those are Sky Cinema subscribers who have been given access to the service after Sky and Paramount did their own distribution deal. “It’s such a late point in time to try and launch another streaming service,” says a Sky executive.

“It’s going to be difficult for Max to launch in the UK on its own,” says another Sky source. “People are already exhausted by streaming services and the everyday punter won’t have a clue what Max is. You’re gonna have to spend a hell of a lot on marketing.”

And there’s the rub. “No one knows what Max is, no one really understands the HBO brand,” says Harrington. “They kind of like the shows when they’re on Sky, but they’re not enormous shows outside Game of Thrones or House of the Dragon.”

Having the Harry Potter series exclusively on Max would undoubtedly help WBD get the streaming service off the ground here, as it has a cultural resonance far beyond any of its other properties, but it would probably get a bigger boost if it did a Paramount-style deal with Sky.

Sky and HBO are fighting over Harry Potter – here’s what it means for you (6)

Sky boss Dana Strong hinted as much earlier this year. “We work really well with Warner and we work really well together,” she said at a conference before the lawsuit was filed. “We are in conversations with them. Regardless, in every scenario, Sky customers will have Warner shows on Sky platforms in some way. It’s really just about how we integrate that and how we work together going forwards.”

Sky struck a different tone in its 36-page writ. The broadcaster accused its long-time partner of acting with “total disregard for Sky’s rights” and unfairly barring it from owning a slice of “a potentially transformational property for which there simply is no reasonable substitute”.

In response, WBD called Sky’s legal challenge “a baseless attempt” to exert pressure ahead of fresh negotiations over airing HBO shows, and said that the “lawsuit makes it clear that Sky is deeply concerned about the viability of its business were it to lose our award-winning content”. A Sky source dismisses this, saying that it simply wishes to enforce its contractual rights.

These skirmishes are merely the pilot of the drama to come. The two sides will be in court on November 13. The TV world will be tuning in.

Sky and HBO are fighting over Harry Potter – here’s what it means for you (2024)
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