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Report : BBC Studios long-term challenges

BBC Studios , the BBC ’ s main commercial arm , has returned £ 1.9 billion (€ 2.2bn ) to the BBC , substantially growing its sales and profits – £ 1.8 billion and £ 202 million in 2023-24 . But it needs to continue to evolve in a dynamic market to meet ambitious growth plans , a new National Audit Office ( NAO ) report has found .

The 2023-24 results were down YoY , partly as a result of challenging market conditions , including a global slow-down in content spend , as well as high-value contracts coming to an end the year before .
Investment in digital services such as BBC . com , U ( formerly UKTV Play ) and BritBox International also reduced profits in 2023-24 . These investments are part of BBC Studios ’ response to global audiences moving away from traditional broadcast TV to on-demand streaming services .
The independent public spending watchdog ’ s report found these challenging market conditions could impact BBC Studios ’ ambition to double its size between 2021-22 and 2027-28 .
BBC Studios ’ growth plans involve exploiting existing successful key brands and IP , such as Doctor Who and the animation series Bluey ; the production of more content for non-BBC third parties ; and a larger share of income and profits to come from digital and streaming services .
Global streaming companies have become increasingly prominent commissioners of BBC Studios ’ content . This has led to an increase in the number of BBC Studios ’ productions undertaken on a ‘ work for hire ’ basis where the IP and distribution rights are retained by
the streamer – approximately 30 % of BBC Studios ’ production income between 2022- 23 and 2023-24 . While ‘ work for hire ’ can be highly profitable to BBC Studios in the short to medium term , this does not generate longerterm returns through the sale of distribution rights , notes the NAO .
Although BBC Studios has diversified its production income , as part of a mixed portfolio of production work , it has not yet met its targets for generating new IP . BBC Studios continues to stress the importance of generating new content , but it remains reliant on the IP from BBC programmes created before the 2018 merger . Of the ten titles from its production business which provided the most profit to the BBC in 2023-24 , only one was from new IP generated by BBC Studios .
While BBC Studios exceeded its income and profit targets to date , the BBC has not updated its published financial targets for BBC Studios , despite significant changes to its business model and the market in which it operates .
To meet its ambition for doubling the size of the business , the NAO recommends that the BBC and BBC Studios take the following action :
• The BBC should ensure that BBC Studios ’ strategic plans for delivering the growth continue to evolve to reflect market developments
• BBC Studios should review the risks associated with not meeting its targets for generating new BBC Studiosowned IP
• BBC Studios should improve the consistency and effectiveness of its internal performance reporting “ Following its merger with BBC Worldwide in April 2018 , BBC Studios has succeeded in delivering increasing returns to the BBC ,” commented Gareth Davies , head of the NAO . “ Realising its ambitions for continued growth in turnover and profit will mean successfully navigating a rapidly changing and highly competitive global market . Key to this will be developing new high performing content for which the BBC owns the intellectual property ,” he concluded .
UKTV rolls out U Masterbrand
Multichannel programmer
UKTV has completed the
rollout of its U Masterbrand
with the commercial
broadcaster ’ s pay
channels , Gold & Alibi ,
transitioning to U & Gold
and U & alibi across paid
linear and on demand
platforms .
The U Masterbrand
initially launched in July
2024 with UKTV ’ s family
of free-to-air channels
becoming U & Dave , U & Drama ,
U & Yesterday and U & W ,
and its free streaming
service , formerly UKTV Play ,
transitioning to U . With Eden
having moved free-to-air
as U & eden in October , the renaming of the pay channels to U & Gold and U & alibi unites the full UKTV network – pay channels , free-to-air channels , and free streaming service – under the U brand .
U & alibi is dedicated to crime drama , while U & Gold celebrates the best of British comedy . UKTV and Sky recently announced a multi-year extension to their long-standing partnership , securing carriage for the
channels across Sky platforms in the UK and Ireland .
“ With our free-to-air portfolio and the U streaming service going from strength to strength under the U Masterbrand , I ’ m so excited
to be bringing the same bold approach , with its warmth and personality , to our pay channels U & Gold and U & alibi ,” commented Penny Brough , UKTV ’ s chief marketing officer . “ The roll out of U has involved the
work and dedication of our teams across the entire organisation so it ’ s a real moment to see the full set of channels finally under the U banner , connecting and better leveraging our brands as we continue our transition to a digital first and audienceled business .”
The launch of the U Masterbrand supports UKTV ’ s growth strategy , focused on enhancing its streaming service and growing its linear channels , by making it easier for users to navigate both online and on-air , as well as creating a halo effect in brand marketing across the portfolio .
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