Tim Davie aims to strike a balance for BBC Studios

BBC Studios boss Tim Davie has underlined that there is “no trade-off ” between the distributor’s commitment to the BBC and its international broadcast partners.

Out of BBC Studios Distribution’s £170.5m content spend for the year to April 2018, 62% (£106.5m) was invested in BBC programming, including co-productions such as Blue Planet II, McMafia and commissions for the likes of BBC Earth.

However, Davie said he remains committed to expanding the reach of the business beyond the corporation and pointed to the opportunity afforded by the commercialisation of BBC Studios’ production arm.

“It’s critical that BBCS supports the BBC creatively, as well as providing financial returns. Having said that, we are not solely focused or reliant on in-house production.

“Our future is also dependent on developing strong relationships with indies and supplying third parties with BBC Studios content, so it is a balance.”

Indie stakes

The annual review, released last week as part of the corporation’s results, revealed that the business has sold its remaining 12.2% stake in The Crown producer Left Bank Pictures – which is now wholly owned by Sony – having offloaded its 29% stake in formats incubator Greenbird Media to Israeli firm Keshet earlier this year.

This month, it took full ownership of Les Misérables (pictured) indie Lookout Point, in which it previously had a 50% stake. Davie said the distributor will weigh up further indie investments on a “case-by-case basis”.

“Our primary interest is working with talent over an extended period of time, rather than trying to extract a quick turnaround with regard to equity value,” he added. “It’s all about developing long-term projects of very high quality.”

BBC Studios Distribution delivered profits of £118.3m, an increase of 42% on last year’s £83.5m. It put the increase primarily down to cost efficiencies, overhead savings and a strong performance in content sales.

Revenues slipped by 2%, down to £1.04bn from £1.06bn, while cash returns to the BBC slipped for the second year in a row, falling 0.2% to hit £209.9m, an improvement on last year’s 5.5% drop.

The distributor has also changed its amortisation period for distribution rights from 10 years to three years – a small but significant shift that reflects decreasing long-tail returns in the later years of a deal.

The financial report underlined that BBCS receives the bulk of its returns on content from partners such as SVoDs in the first three years of a deal.

“We’ve seen a noticeable shift in the market where more of the value of rights is being extracted in early years,” said Davie. “This is natural in a hyper-competitive market that is full of content. It was right for us to take a more conservative position with regard to our expectations of revenues over time.”

Elsewhere, the annual review revealed that BBC Studios Distribution owns 40.5% of US and Canadian SVoD BritBox – its co-partnership with ITV and AMC – and invested £1.1m in licensing rights for the 250,000 subscriber-strong business last year.

“BritBox had a strong first year and the business is well set up to deliver continuing growth,” said Davie. “With that comes an ongoing commitment to ensure we’ve got the right investment in content. We’re not constrained by one particular content funding model.”