Chairman's Statement

CHAIRMAN'S STATEMENT

Tony Hall

 

GLOBAL AMBITIONS

I am pleased to report on a year of positive progress at BBC Worldwide. Over the 12 months, and against a backdrop of market transformation that presented some challenges, the company took significant strides both to bring its strategy to life and to re-shape its business for the future. These moves - investing in premium content, amplifying the BBC brand overseas, and transforming digitally - will underpin profit and shareholder returns in the years ahead, and come at a time when the BBC is more determined than ever to ensure we extract the maximum sustainable future contribution from all our commercial subsidiaries.

BBC Worldwide delivered a very respectable financial performance. As set out elsewhere in this Annual Review, reported numbers are complicated by a number of factors, principally the part-disposal of BBC AMERICA - a partnership with AMC Networks (AMCN), which will be visible on UK screens through co-developed programmes, as well as securing the future of our independent channel in the world's largest media market. Overall, results were in line with the Board's expectations and represent a good outcome.

Most importantly, 2014/15 saw a step-change in financial flows to BBC Worldwide's parent. BBC Worldwide invested £94.4m in BBC commissions (2013/14: £88.9m) from both BBC Production and from UK independents. And at £226.5m (2013/14: £173.8m), shareholder returns were up by almost one-third, equivalent to 12.6% of total BBC Television content spend, up from 10.1% the previous year.

Vitally, as a result of this financial contribution, audiences in the UK were able to enjoy investment in programmes at a higher level than the licence fee alone can provide. Among these enhanced shows was Doctor Who, seen in the UK by an average consolidated audience of 7.4m, airing in over 70 other countries, and achieving record ratings on BBC AMERICA and Space channel in Canada. Meanwhile Life Story, from the BBC Natural History Unit - which was over 70% funded through commercial investment via BBC Worldwide - was seen by a domestic consolidated audience of 6.5m, with rights to broadcast the series acquired by international broadcasters for 151 territories.

However, BBC Worldwide is not just significant for the financial contribution it makes to the Corporation. In 'bringing the UK to the world' - one of our public purposes - it provides a route to market for UK programme makers through its sales force, on BBC branded channels internationally, and via the successful UKTV channels in the UK, part-owned by BBC Worldwide. In total, its indie payments, covering all commissions, rights acquisitions and royalties, remained strong at £113.1m (2013/14: £116.4m). BBC Worldwide champions the cause of UK content and culture both in the UK and outside. And research demonstrates that business leaders who consume the BBC have increased propensity to trade with UK firms, suggesting economic dividends, beyond television, for the UK as a whole.

We believe BBC Worldwide is the most successful commercial subsidiary of any Public Service Broadcaster in the world. Although commercial returns are a small part of the BBC's funding mix, we are nonetheless determined to maximise their impact. Therefore, looking ahead to the next phase of the BBC's development, and a new Charter period, it is the Board's aim to sustain annual financial returns at around this new level, even without the one-off benefit of BBC AMERICA proceeds. This will not be easy, but it is important that we utilise all the BBC's financial levers to their very maximum, and BBC Worldwide has ambitious business plans to support this. We are therefore looking to BBC Worldwide to generate around £1bn in returns for the Corporation in the five years starting from 2014/15 - an increase of almost one quarter on the previous half-decade.

In support of that aim, the year ahead will see further momentum from BBC Worldwide's strategy. A continued focus on premium content will include War and Peace, natural history landmark The Hunt, and the return of Sherlock on the slate. Global BBC brands will remain at the heart of BBC Worldwide, with results coming through from the three new international channel feeds launched in 2014/15, a further four since year end, and others to follow. As well as continued exploitation of world-class programme brands from Dancing with the Stars to Doctor Who. And digital developments will take the form of BBC Store, enabling UK customers to buy and keep the BBC programmes they love, as well as plans for further digital BBC services in selected markets outside the UK.

Finally, I would like to acknowledge BBC Worldwide's staff, in the UK and outside, its many partners and clients around the world, and all those who have played a role in helping BBC Worldwide to support the BBC in the year.

Tony Hall
Chairman, BBC Worldwide and Director-General, BBC