BBC Studios revenue hits $2.6bn but channels & streaming suffer as profits fall 24%

Doctor Who

BBC Studios (BBCS) has provided some good news for its embattled public broadcaster parent by revealing that revenue topped £2bn ($2.6bn) for the first time in 2022/23, although its channels & streaming arm’s profits fell by a quarter.

The results, released today in tandem with the BBC’s Annual Report, show that BBCS saw its overall annual sales rise 28% to £2.09bn in 2022/23, up from a pandemic-hit £1.26bn in 2020/21 and £1.6bn ($1.93bn) in 2021/22.

Overall profits (EBITDA) rose 6% to reach £240m at the commercial arm of the BBC, with the news coming as the domestic broadcaster attempts to deal with allegations of misconduct against one of its presenters.

Returns to the BBC were at a record level of £362m (21/22: £353 million), with content investment of £177m.

Bluey

Revenue from its global content studio arm, which houses production, content sales, brands and licensing globally, powered much of the growth, with sales up 40% and profit (EBITDA) hitting £46m.

BBCS said that over 75% of its revenues are now from third parties, such as Amazon, Apple and Netflix, while shows such as Dancing With The Stars, Happy Valley S3 and Sherwood were highlighted.

The company also pointed to deals such as the Doctor Who and Disney+ pact as key to its long-term growth plans revealed last year, which will see the organisation attempting to double in size between 2021/22 and 2028.

The Prehistoric Planet producer is also active in M&A again: It today backed former Lime Pictures’ exec Sarah Tyekiff’s nascent format prodco Mettlemouse Entertainment and is also looking for international acquisitions, as revealed by TBI earlier this year. It picked up Nordic group STV in June.

Streaming & channels profit decline

There was less cheer within the channels & streaming unit, where revenue held steady at £535m but profits declined 24%.

Sherwood

The organisation blamed “external challenges” including inflation, a volatile advertising market and pressure on pay TV subscriptions, although BBCS pointed to its UKTV division as a bright spot, with commercial market share rising to 8.70%.

UKTV’s free streaming service UKTV Play also enjoyed success, adding one million registered users.

BBCS also highlighted its shift into FAST channels, with 22 services offering 6,000 episodes of content on platforms including Samsung TV Plus and Roku, while BritBox international – a joint venture with ITV Studios – logged three million subscribers in eight markets.

Tom Fussell, CEO of BBCS, said the results showed “the strength of our content driving our growth strategy.”

He added: “Our global content studio had an exceptional year, growing by nearly half and winning awards for creativity and craft across all genres, as well as covering significant national moments with distinction.

“Revenue held steady overall in our channels and streaming services internationally, despite ongoing external challenges posed by inflation and volatility in the advertising market, and we made further investment into production labels, BBC.com and UKTV to promote and sustain future growth.

Tom Fussell

“Looking ahead, we have bold ambitions to double the business by 2028, while investing for future growth and market volatility, which will impact short term profitability. At the same time, we are continually transforming our culture to prioritise inclusion, operate sustainably and put performance at the heart of everything we do.”

BBCS also talked up its non-programming activities, particularly around kids brand Bluey, which helped to drive consumer products revenue up 10%.

Fussell told TBI earlier this year that he would be interested in the potential of acquiring a brand such as hit game Wordle, and the company pointed to its collaboration with Minecraft Education on a Frozen Planet II offering and the launch of a BBC Earth Experience in London.

BBCS also published its annual pay gap report, with details of pay gaps for gender, ethnicity, disability and LGBTQ+ employees broken down by career level band.

It detailed reducing pay gaps across all key characteristics, with 90% of staff in pay bands where the gap is within 5% and women now making up 51% of senior leader positions globally.

Fussell added: “Fairness is a key part of our culture, and though I am pleased to see we are making progress, there is still more to do here. We lead the way in transparency in this area, and we are determined to ensure that our people have every support they need to succeed. This is crucial to the success of the business.”