Exclusive: BBC Studios CEO Tom Fussell on streaming “shock”, Disney & his wish for Wordle

Somewhere Boy

As BBC Studios launches its Showcase event today in London, CEO Tom Fussell tells Richard Middleton about global acquisition plans, riding the streaming turbulence and his wish for Wordle.

It’s almost six months since BBC Studios CEO Tom Fussell delivered a headline-grabbing plan at MIPCOM to double revenues and profits within five years.

If six months can feel a long time in politics, it’s a whole other era in the recent history of TV and streaming. Since Fussell’s keynote address, the global SVOD’s that had propelled the content industry to new heights have been rapidly deploying the brakes on spending.

Tom Fussell

Prompted by angry Wall Street investors, subscriber growth at (almost) any cost is out and profits are in. Boastful prophecies of ever-increasing content investments that previously drew applause now cause analysts to draw sharp intakes of breath.

One suspects that behind the scenes, production group chiefs who rely on this spend are also gulping for air. For Fussell, however, context is key and best highlighted by the overall surge of spending over the past decade. Yet he admits a correction is in motion, adding that there’s “some shock” to be dealt with.

“But things peak, then they settle down and people get back to more fundamental economics, that is just inevitable,” he tells TBI, as posters featuring some key BBCS brands – from the Daleks to Sir David Attenborough – peer out from behind him.

Such iconic figures will provide a good proportion of the revenues for BBCS as it seeks to return ever-increasing amounts back to its parent broadcaster, the BBC, but there is a distinct feeling that the commercial division is embarking on a new chapter.

“We are fishing in a part of the industry where there is still strong demand for the best of British creativity. And that is exactly what we stand for,” says Fussell, whose company makes 75% of its revenue from production and sales to third parties.

Flexible thinking

Talk to almost any producer and it’s clear that there are real budgetary squeezes being felt. Yet there are also upsides to the US-based streamers’ spending cuts – namely, that they want more bang for their buck. And that means potential for those operating in lower cost production communities outside of the US, as well as a more open-minded approach to rights.

“A year or so ago the streamers were saying they’d only commission on work for hire, but that model is – well, people are being more flexible, let’s put it that way,” Fussell says. For a non-US heavyweight producer with a giant sales arm, the potential is clear.

You might expect Fussell to then throw a few scripted or high-end factual copros into conversation, but he instead shifts the attention to kids content and Australian megahit, Bluey. BBCS is distributor and co-commissioner on the ABC show, which Disney+ picked up in numerous territories. The deal underlines both BBCS’s deepening relationships with the Mouse House – such as its huge deal to take Doctor Who global (excluding the UK & Ireland) – but also the ambition to extend reach across genres and geographies.

“In a world in which you might see some people retrenching and taking less risk, that is not what we are about now. We need to take more creative risks and back people – we know we are here for the long term. We are in a good place this year with the economic conditions and are powered up for growth,” Fussell says.

Sid Gentle’s Extraordinary

On scripted, the CEO points to shows such as Sid Gentle Films’ Extraordinary, House Productions’ Sherwood, Clerkenwell Films’ Somewhere Boy and Lookout Point’s Happy Valley S3 as directions of travel. Each are produced by BBCS-owned production entities, with commissioners ranging from Disney+ EMEA to the BBC and Channel 4.

But US commissions are also top of mind. Scripted chief Mark Linsey upped sticks to LA last year to lead coproduction and commissioning, and it’s clear Fussell smells opportunity in the Hollywood hills.

“He’s there to really understand the US market and tastes so we can take that business on with all the creativity coming out of the UK. We will be creatively led out of the UK by all our labels, but the demand is there,” Fussell says.

“Our budgets are not on the Rings Of Power or Mandalorian level, so we are more affordable and you can take more risks. Look at Rain Dogs,” he adds, highlighting the HBO and BBC coproduction as a “quirky British show that’s simply unique.”

“It’s these types of shows that bring audience and if you are trying to bring new subscribers in, then British scripted leads the way. That is why we win in that area,” adds Fussell, who also points to the UK’s tax relief scheme and the strength of the US Dollar against Sterling as helpful attributes.

Acquisition appetite

There is also a shift in terms of BBCS’s expanding M&A activity, most notably ending its habit of investing only in UK production groups (the acquisition of Rapid Blue in South Africa in 2016 a notable exception.)

“We have set up organically in some places outside the UK, but we are also now looking at other opportunities to invest in companies internationally,” Fussell adds, a mission made more feasible after last year’s government decision to increase its borrowing capability from £350m to £750m by 2027.

“The ambition is there, we are being really considered in where we want to enter the market and why, but what I have learned is you can’t rule anything out.

“The biggest thing for us is cultural fit and to make sure [acquired companies & creatives] really get us – we are a BBC global company and we have the BBC brands and values behind us. Everyone gets what that means.”

But what about competing amid the rampant industry consolidation around the world? “Does Banijay and Endemol Shine Group affect us? Not really. They are running their business really well, doing what they’re doing, and we are in our space doing what we do.

“You know from the people we are acquiring it’s not on that scale – we are setting up really great talented people on a smaller scale but we know the niche we need and that works much better for us.”

Recent scripted deals have trodden the previous UK-based path, such as taking full ownership of Liz Kilgariff’s Firebird Pictures and a minority stake in Small Axe producer, Turbine Studios, but the horizon has broadened. There has also been movement on unscripted, with BBCS now owning Inside The Factory outfit Voltage TV and acquiring a 25% stake in Mothership Productions, the unscripted indie set up by former Channel 4 exec, Kelly Webb-Lamb.

Unscripted urges

Indeed, these moves have bolstered BBCS’s factual cannons and Fussell points to unscripted growth “coming from all avenues”, including the October tie-up with My Octopus Teacher director James Reed.

BBCS also has the might of Planet Earth III and Frozen Planet II division, the Natural History Unit (NHU), to rely on and the innate nature of such blue chippers inevitably means wrinkles in the streamers’ short-term spending strategies can be smoothed out over the longer term of a big factual commission.

“Some of these [factual] shows have long lead times but we have a big pipeline with the BBC taking us across the next decade, with other partners also involved,” he adds.

Fussell also picks out BBCS’s Science Unit under Andrew Cohen as a key performer, adding that the sector is one “where we are seeing budgets grow, because we are one of the very small number of people who can make those shows.”

Frozen Planet II

There is of course increasing competition on high-end factual –  ITV Studios’ acquisition of Plimsoll Productions perhaps the most notable – but Fussell says competition is “healthy”. And, he adds, “frankly I’d back the NHU to go up against anyone else in the world.”

Rich SVOD deals such as the Discovery pact struck in 2019 – providing the operator with access to “a section of work”, as Fussell puts it – look unlikely to be repeated in the current climate but the BBCS CEO points to recent shows such as Apple TV+’s Prehistoric Planet as an example of the multi-commissioner ecosystem available.

“It means creatives can make different shows for different people, because not all platforms want the same thing,” he says.

Tried and trusted brands are also raising revenue, as BBCS’s formats business continues to wring value from its line-up with Bake Off recently entering Algeria – marking the 40^th territory for the Love Productions show.

Fussell also talks up the streamer-only deal for Dancing With The Stars in the US, after it shifted from ABC to sibling streamer Disney+. Fussel declines to comment on the commercial side of the deal, only adding that he is “really happy” with its performance.

Where revenues are more likely to be growing is in BBCS’s ever-expanding scripted format business, which has seen shows such as Luther head into India and Doctor Foster remade in Korea. “These are working really well, and we’re seeing growth as streamers want localisation and local audiences,” Fussell adds.

Channels & consolidation

It’s easy to forget that while many of the US studios have been focusing on DTC over the past five years, the strategy for BBCS has changed relatively little.

UK-focused network business UKTV remains a bright spot for BBCS, with channels such as Alibi, Gold and Dave delivering returns with a diet of library shows and growing originals. Associated streamer, UKTV Play, is also seeing uptick in viewing, and Fussell is adamant that this will continue with further investment.

Sands are shifting though, with the recent closure of its BBC Brit and BBC Earth channels in the Nordics an indicator of viewing habit changes. In their place will be a single BBC Nordic channel and an on-demand service, with the catchy moniker of BBC Nordic+.

And BBCS, like its competitors, is moving into FAST with gusto, with 12 channels in the US including classic Doctor Who, Antiques Roadshow UK, BBC Food and Britbox Mysteries.

A further 11 are available across EMEA, and BBC’s BritBox continues its roll-out. Fussell declines to talks specifics because of JV partner ITV’s upcoming results, but it is a long-term play, he adds.

An area where Fussell is much more forthcoming is BBCS’s culture. The organisation has made concerted efforts to improve diversity with a focus on transparency around pay – in 85% of roles, the disparity between genders is +-3%, he says. “We do that for gender, we do it for ethnicity, sexuality and we’re now tracking and will get that information for socioeconomic in the UK and where we legally can do so internationally,” he adds.

Fussell says BBCS has also improved the way staff feel about their protected characteristics, with a 95% rate of declaration, something the CEO says is “unheard of”.

“Commercial is one thing… but our cultural ambition is as important to me because we only win with that. It’s about authenticity, inclusion, empowerment and trust,” he adds, calling on others to make similar moves.

Next moves

While streamer strategy shifts might dominate the daily headlines, the longer term threats to BBCS arguably come from outside of the traditional content business.

Social media and gaming are increasingly encroaching on viewer’s free time that was once dominated by TV screens and Fussell is keen to embrace new avenues.

Minecraft Frozen Planet II

“Gaming is a big opportunity – I’m not talking about Call Of Duty but something like Wordle, which the New York Times got – that would be a wonderful game for BBC branding and there are great opportunities around that.”

There have also been moves into the metaverse, with a Frozen Planet II branded world on Minecraft indicating demand from younger viewers. Perhaps as importantly, a teaser for it that featured a rather playful penguin has become the best performing Instagram video in Minecraft’s history.

Such moves reflect the expansive strategy of BBCS under Fussell but also the fast-moving landscape in which it operates.

New platforms will come and go, he says. “But whether it’s coproductions or licensing or work for hire, they are just economic models. The audience is what we are all here for and that’s how you’re going to make a successful business.

“The ecosystem will ebb and flow as it always has, but organisations like the BBC and Disney are 100 years old. They know what their audiences are doing.”