BBC Studios profits fall $41m, as pandemic blamed for 10% revenue drop

Time

BBC Studios (BBCS) has revealed its profits fell by more than $40m last year, as the pandemic hit production capabilities and advertising earnings.

The commercial arm of the UK pubcaster saw its EBITDA for the year ending 31 March 2021 fall by £30m ($41m) to £151m, under what the company described as “extremely demanding circumstances”. Its annual report also revealed that overall sales were down by 10% – or £133m – on 2019, to £1.255bn.

BBCS put the decline down to pauses in production, adding that the year-on-year reduction of 17% had been achieved thanks to reduced costs partially offsetting lower revenues.

Returns to the BBC – primarily via investment in programming – were £137m, down from the 2019/20 figure of £276m, but BBCS said it was on track to deliver its five-year cumulative target of £1.2bn in returns to the BBC by next year.

Dancing With The Stars

Earlier this year, BBCS said it would aim to return £1.5bn to its parent organisation between 2022 and 2027.

BBCS’s figures are the latest to highlight the extent of damage caused by the pandemic on production. In March, ITV Studios said its revenues had taken a 25% hit over the past year while Fremantle suffered a 40% decline in profits.

‘Strength’ & sales

Despite the pause in production and uncertainty in the advertising market, BBCS said its “careful control of costs and reduced investment” meant it was now in a “position of strength”.

The company’s UK production teams produced 1,352 hours of content and 232 titles in the year, with 90% of productions back in operation by end of 2020.

Its global operations have also returned to production, with BBCS pointing to teams “overcoming severe Covid restrictions in LA, France, South Africa and Mumbai” to produce shows such as Dancing With The Stars for ABC in the US, Murder Among The Mormons for Netflix, and a second season of Criminal Justice for Disney+ Hotstar.

BBCS’s content sales were down 9%, despite the launch of new services such as Discovery+ and HBO Max, while income from consumer products such as DVDs increased 3%, as people turned back to DVDs and downloads during the pandemic.

The company, which is still looking for a CEO following Tim Davie’s move to head up the national broadcaster, also pointed to the launch of BBC Select on Amazon and Apple TV+ as an area of success.

Tom Fussell

Its joint venture streamer BritBox, operated with ITV Studios, also went live in Australia and the SVOD’s global reach topped 1.7m subscribers, BBCS said.

Horizon scanning & streaming potential

Looking ahead, BBCS said it is in a “strong position for future growth”, but cautioned the “ongoing uncertainty about the markets in which the business operates as a result of the pandemic.”

It pointed to the reorganisation of BBC Global News and BBC Children’s Productions as areas that would drive further third-party production opportunities, as well as a slate that includes Jimmy McGovern’s Time, natural history show The Green Planet and dancing/dating format I Like The Way You Move.

Tom Fussell, BBCS’s interim CEO, said: “2020/21 was an extremely challenging year and I want to pay tribute to teams across the business who worked so hard to deliver this set of results.

“Behind the numbers we are releasing today is a superhuman, collective effort to support our customers around the world, with most of us working in difficult and dynamic circumstances to deliver the very best British content.

“We’ve kept programmes on air, set standards for Covid-safe productions, scooped commissions, won awards, launched new services, strengthened our production pipeline and grown our brands.

“Thanks to a quicker than expected recovery in the global media industry, particularly advertising, along with some careful cost controls, we are in a very strong position to deliver on significant commercial ambition and meet the new target of £1.5bn set by the BBC over the five years from 21/22.”