BBC Studios records profit in first year

BBC Studios (BBCS)’s production division has reported a small profit in its first year of trading while BBC Worldwide (BBCWW), the distribution arm that recently merged into BBCS, reported a slight dip in sales.

David Clementi

In its annual results, BBCS reported earnings before interest, tax, depreciation and amortisation of £7.2m (US$9.55m) while sales came in at £432m.

Led by chief creative officer Mark Linsey, the UK company is behind more than 2,000 hours of programming including shows such as Blue Planet II and soap EastEnders for the BBC.

It has also secured a raft of commissions since opening up its services to third parties last year, with shows such as Fatberg Autopsy for the UK’s Channel 4 and Stargazing Live 2 for ABC in Australia on its slate.

BBCWW, which was formally folded into BBCS in April, reported headline sales of £1.04bn for the year to April, down 2% on the previous year.

However, it returned more than £200m to the BBC for a fourth year running, with a contribution for 2017/18 of £209.9m.

The dip was blamed on factors including a decline in the DVD market and fewer US production hours on Dancing With The Stars, which airs on ABC.

Overall content sales were up just £400,000 on 2016/17 at £422.8m, with shows including Blue Planet II, Planet Earth II and the fifth and final season of BBC America drama Orphan Black all selling into over 220 territories in the year.

Tony Hall

The UK public broadcaster’s commercial arms revealed plans to merge in November last year with the new entity, called BBCS, bringing the UK pubcaster’s programme production, sales and distribution together under one roof. Former BBCWW CEO Tim Davie took on the same role at BBCS.

Linsey said the 2017/18 results for BBCS were “testament to the hard work and dedication of our hugely talented programme-makers and business teams.” He added that he would now “look forward to consolidating and growing our success within the newly merged BBC Studios.”

Davie added that BBCWW had delivered “a solid performance for 2017/18 against a rapidly changing and an ever-more competitive landscape.

“The results reflect strong delivery against our strategy; investing in premium British IP and an increased focus on customer management have led to another record year for content sales, while our productions, formats and branded services continue to extend their global footprint and find wider audiences.”

BBCWW made a series of investments over the past year prior to its merger with BBCS, including deals with The Durrells prodco Sid Gentle Films. Last week the company took full control of UK prodco Lookout Point, which it first invested in four years ago.

On the domestic front, the BBC’s annual report revealed it had doubled the number of female and BAME staff in its top pay brackets, with 28 females now earning in excess of £150,000, up from 14. BAME talent in the same pay bracket rose from seven to 13.

The figures do not take into account the salaries for staff working for commercial arm BBCS. The top 10 BBC earners remained male, with football presenter Gary Lineker topping the list with annual earnings of between £1.75m and £1.76m.

The public broadcaster’s chairman, David Clementi, again highlighted the “threat” faced by the BBC from US-based streaming and tech companies and said the market was becoming “more global and competitive.”

“We face a threat to British content from the west coast of America, and we need to respond to the rapidly changing habits and needs of our audiences in the digital age,” he said.

BBC director general Tony Hall, who most recently raised the issue of competing with US tech companies in March, added that the broadcaster had to adapt to its younger viewers.

Hall said the BBC would aim “to meet the challenges posed both by the changing habits of young audiences and the global shift in content production toward a small number of US-based competitors.”

He added that “home-grown, British content has never been more under threat” and said that while the growth of streaming has resulted in a boon for viewers, it has also pushed up costs and squeezed the BBC’s ability to fund original UK content.