Digital strategy key for BBCW
By Kate Bulkley
For Broadcast July 16, 2015
Smart manoeuvring can help Davie meet targets, says Kate Bulkley
BBC Worldwide’s annual results this week are well timed for me. I’m in America, so I can offer a ‘local’ spin on the figures while having a mocha frappucinno in BBCW’s largest international marketplace.
On the face of it, the topline numbers look pretty good: a sizeable £1bn in headline sales income and a chunky £226.5m going back to the BBC mothership.
But there are some emerging cracks in the performance.
The headline profit of £138m is down almost 12% from a year ago, mainly due to the loss of BBC
America revenue following the sale of a 49.9% stake in the business to AMC Networks. However, that deal returned a one-off payment of $200m (about £130m) and, if you took it away, Auntie Beeb would be getting considerably less into its coffers.
With BBC supremo Tony Hall saying he expects significant contributions from BBCW going forward, it is worth asking how this is going to happen.
BBCW could sell its 50% share in UKTV, which is worth around £500m. But given it grew both audience share and profits last year, is that really a good idea? The pressure on the BBC at the moment means another one-off bump may look appealing, but how much more family silver is there to sell?
When Tim Davie joined BBCW as chief executive, he set about changing the management structure and launching umbrella brands, like BBC Earth, that could work both online and as linear channels. Yet BBCW’s headline sales and profits are both down year on year.
Here in the US, BBC America is a strong channel for Anglophiles and its primetime viewership grew by 3% last year, but it’s not the only game in town and it has to fight with PBS and other networks for its shows. BBCW is still a relatively fledgling business in the
US. Headline sales in the region and headline profit declined to 12.5% and 27% respectively. BBCW says these falls were “almost solely” due to the reduced ownership stake in BBC America.
That said, it’s true that US audiences follow British shows, and British talent still has a cachet over here, James Corden’s success being the most recent example. The latest incarnation of Doctor Who (pictured) gave the show on BBC America its highest viewing ratings ever, up 19.7% versus other series.
We can also expect BBCW to make a very specific strategic push in the US in particular. Digital content sales surpassed linear TV sales for the first time last year, showing gains of 54%. Davie called it “a tipping point” in the American market.
It’s a key change and it’s being driven by the big cheques Netflix and Hulu have written to BBCW for shows like Sherlock and Happy Valley, plus TV Everywhere deals and new over-the-top, broadband-delivered pay-TV-lite services such as Sling TV.
And while DVD sales in the US have declined, the BBC website has increased its number of unique users in the US and Canada by 86% to 5.1 million a month.
So even if Chris Evans’ version of Top Gear flops in the international market, smart digital manoeuvring may still give Davie a decent chance of meeting Hall’s targets.