BBC Studios plans investment amid ‘hyper-competition’

BBC Studios (BBCS) is to invest further in UK production companies amid “hyper-competition” in the market, having revealed its contribution to its public broadcaster parent hit almost £250 million ($316 million) over the past year.

In its annual review released today, BBCS said it had returned £243 million (US$300 million) to the BBC over the past 12 months, driven by sales of shows such as drama duo Luther and MotherFatherSon, as well as natural history series Dynasties.

It has also benefited from the success of series including Killing Eve (pictured), which is sold by Endeavor Content but was commissioned by BBCS’s joint venture channel BBC America and produced by UK-based Sid Gentle Films, in which BBCS holds a majority stake.

Subscriptions at its North American streaming service Britbox, which is owned with UK commercial broadcaster ITV and US-based AMC, have soared to 640,000 while the organisation said it had returned £176 million to UK indies through rights investments and royalties.

Headlines sales were down almost 3% to £1.37 billion, however, and the broadcaster’s commercial arm admitted the “need for business transformation is still significant and delivering expected margins in a world of hyper-competition is challenging.”

BBCS, which is vying for UK talent against the likes of Netflix, Amazon and Apple, said it would continue to invest in shows as well as taking stakes in production companies and backing talent. It already has equity stakes in 16 UK prodcos and also holds 17 first look/output deals, in addition to representing content from more than 200 other companies. Last year it took full control of Les Miserables producer Lookout Point.

The organisation, which merged its production and distribution arms last year, said it would also look to expand its share of “high-value customers” and would invest more into original programming for its recently acquired UKTV channels, such as Alibi, Dave and Gold.

It said it was also changing how it invested in programming, shifting from “pure licensing to funding creativity” on shows such as His Dark Materials, Dracula and Good Omens and adding that “creative deal-making” had become increasingly important. BBCS also highlighted scripted format sales success in Asia, with Doctor Foster remade in South Korea, Mistresses being reworked in Japan and Life on Mars being rebooted for China.

On the domestic front, the BBC said it reached 91% of UK adults via its array of TV, radio and online services, down from 92% last year, while its on-air talent costs rose by 7% to £158m. Its gender pay gap improved over the same period, falling from 7.6% this time 12 months ago to 6.7%.

Three female presenters – Claudia Winkleman, Zoe Ball and Vanessa Feltz – are now among its top 10 paid stars, with sports host Gary Lineker again being the best paid.

The broadcaster also used its annual review to defend its decision to cut free licences to those aged over 75. BBC chairman David Clementi rubbished claims that cutting pay to its on-air talent would cover the extra cost, adding that “the sums don’t add up.” He instead blamed the UK government, which said it would stop funding the licence fee for over 75s three years ago.