Multiple companies are restructuring their streaming strategies to optimize profits in a highly competitive industry. Warner Bros. Discovery (WBD -0.70%) is undergoing this process as it works to pay down a considerable debt, to the detriment of its international presence. 

Here's why Warner Bros. Discovery may have already lost the streaming wars as it falls behind abroad. 

Precarious priorities

The merger of WarnerMedia and Discovery that led to the launch of Warner Bros. Discovery also saddled the new company with about $55 billion of debt. CEO David Zaslav is prioritizing getting Warner Bros. Discovery back into the black, enacting multiple changes such as scrapping live-action family content, shutting down CNN+, and canceling the nearly completed Batgirl film -- an estimated loss of $90 million. 

Part of the company's restructuring plan was to completely halt its original programming efforts in parts of Europe. The move ceased the production of series in Nordic countries, the Netherlands, Central Europe, and Turkey. HBO Max continues to offer its service in these countries, but series such as the popular Danish family drama Kamikaze and its fans suffered the brunt of the content pull. While the decision has helped Warner Bros. Discovery reduce spending, the canceled content will negatively impact HBO Max's relationships with local producers and European subscribers. 

Moreover, the biggest development on the horizon for the company is consolidating HBO Max and Discovery+ into one platform. Although a worthy endeavor, the move will also see Warner Bros. Discovery significantly fall behind in markets outside the U.S. The streaming merger will require time and resources, putting the company's international expansion on hold. The company has said the shiny new platform will launch in the U.S. next summer, Latin America a year later, Europe in early 2024, and Asia Pacific territories in late 2024. The timeline gives the company's competitors plenty of time to further their claim on international markets. 

Expanding competition 

Multiple streaming giants have made it their mission to expand abroad, with hopes of claiming the majority market share in regions outside the U.S. Streaming titans NetflixAmazon's Prime Video, and Walt Disney's Disney+ have all grown to over 190 countries. Meanwhile, Apple's smaller but not insignificant Apple TV+ is currently supported in 107 countries. HBO Max provides service in 61 territories worldwide with even fewer countries. 

The dates Warner Bros. Discovery has given for its coming HBO Max and Discovery platform to launch and expand abroad are still years away in crucial countries. The Asia Pacific region is currently the fastest-growing streaming market, expected to be worth $31 billion by 2025. And yet, Warner Bros. Discovery does not plan to enter the market until late 2024. HBO Max currently has no presence in Asia, while Netflix, Prime Video, and Disney+ have expanded rapidly in the region.

Additionally, the streaming market in India alone is expected to be worth $7 billion by 2027. While that figure might seem like there's plenty of market share to go around, Prime Video and Disney+ Hotstar have already attracted millions of subscribers in the country. In March 2021, India became the largest market for Disney+, with 45.9 million subscribers in the region as of February -- a third of the company's worldwide members. 

Can WBD catch up?

As Warner Bros. Discovery restructures its business and prepares for the launch of its new streaming platform, the company will need to keep in mind markets outside the U.S. The company's biggest competitor, Netflix, lost over a million subscribers in the first half of 2022, and its stock is down 56% over the year. However, the company has used its loss of U.S. market share to motivate expansion abroad. In 2022 alone, Netflix has significantly increased its production of local-language content in multiple countries and opened a new office in Rome.

Netflix has noted the oversaturated American market and found that it may be more lucrative to explore other markets rather than fight a losing war. Warner Bros. Discovery would be wise to do the same with its coming relaunch into the streaming industry. HBO Max has grown exponentially since its launch in May 2020, but continued growth will require international markets. Warner Bros. Discovery might want to reorder the countries it launches its new platform in to stay competitive. 

Investors would be better off focusing on streaming stocks with a more global mindset, such as Disney and Amazon, while Warner Bros. Discovery goes through its planned restructuring and its new platform enters the market. How U.S. consumers react to the merger of HBO Max and Discovery+ could signify whether the company stands a chance at launching internationally so late in the game.