REACHING NEW AUDIENCES
Comprised predominantly of the non-English speaking world, our Global Markets business encompasses Western Europe, Central and Eastern Europe, Middle East and Africa (CEMA), Asia and Latin America. Business activities range from TV sales and channel operation to production and intellectual property exploitation.
In a difficult year, during which our business was affected by adverse currency movements and exceptional conditions in some markets, sales were still broadly flat at £276.3m (2013/14: £279.1m), a decline of 1.0%. Profit, however, was down 27.0% at £32.2m (2013/14: £44.1m), reflecting both external headwinds and significant investment in content and marketing for new channel brands. Re-stating at constant currency, revenue was up 1.5% while headline profit decreased by 5.0%. The year saw real progress made in Asia and Latin America, key channel renewals in important territories and an increased reach through wider distribution, the roll-out of new brands and higher TV sales.
Western Europe delivered sales of £160.1m (2013/14: £156.2m) and headline profit of £27.0m (2013/14: £34.3m) due to euro weakness and planned channels investment. Restating at constant currency, revenue was up 6.3% with headline profit down 2.8%.
Western Europe is a key sales market, with local and international SVOD customers becoming increasingly important. Stand-out titles included The Musketeers, Orphan Black, Top Gear and Misfits. We renewed a long-standing factual content partnership with France Télévisions and extended a BBC Earth branded block - one of 19 BBC blocks globally - with Pro7Maxx in Germany.
Our French production business increased revenue by over 50%, with local versions of five much-loved BBC programmes - BBC productions Dancing with the Stars, Antiques Roadshow, The Weakest Link and Love Production's Sewing Bee and Bake Off - on screen in the same month. These generated a total primetime average audience of 18.4m. Top Gear France also enjoyed good ratings and our German joint venture, Tower Productions, received a first commission for original format One in a Thousand from ZDF.
Rest of World
Challenges in the Russian market which impacted the wider broadcast industry, alongside channels investment and foreign exchange, affected CEMA. This was offset by good revenue and headline profit performance in Asia and Latin America. As a result of the factors in CEMA, total RoW revenue was down at £116.2m (2013/14: £122.9m) and headline profit down at £5.2m (2013/14: £9.8m).
Poland became the debut market for our new genre brands with BBC Brit and BBC Earth launching as linear channels in February. Both outperformed established rivals, breaking into the top three in their competitive sets. Advertising revenues on our African and Polish channels continued to grow.
Format sales included Great Bake Off to Israel and Turkey and Dancing with the Stars to Slovenia and Romania. The latest series of Dancing with the Stars in Poland achieved a 24.1% audience share, up from 23.8% on 2013/14.
TV sales markets showing a strong uplift included Israel, taking The Honourable Woman, Happy Valley, The Musketeers and Sherlock; Turkey, buying Intruders, Doctor Who and Frozen Planet; and Africa, with Orphan Black S1 and S2 and Atlantis S1.
We also entered our first VOD deals in Africa and Poland and secured a number of digital deals across the Middle East and Central & Eastern Europe.
The year saw success across finished programmes and formats, BBC branded channels and blocks as well as local production. Sherlock S3 passed 90m views on Chinese digital platform Youku.
Significant deals included programme sales and VOD deals across multiple platforms to Taiwan, while Japan's NHK signed a co-production agreement for the Natural History Unit's Wild Japan. Through a partnership with Singapore-based Popular Education we entered the Chinese English language learning market.
Audiences enjoyed local versions of formats, with India adding a third version of Dancing with the Stars produced by BBC Worldwide Productions in Karnataka for ETV Kannada, and local versions of Top Gear and Dancing with the Stars returned to China.
BBC Entertainment was named by milenio newspaper as the Best Pay TV Channel in Mexico for a third successive year. Digital sales growth continued, including new deals with Enter Play Brazil and Veo Mexico. Format sales remained strong, earning free-to-air prime-time scheduling for What Not to Wear in Brazil and for Dancing with the Stars in Panama and Costa Rica. Doctor Who and Sherlock were sold to Brazil's TV Cultura, while deals with major pan-regional TV networks, including TNT, HBO, Fox, History and A+E, helped BBC content reach new audiences across the region. Natural history titles received theatrical release as well as a programming block on Ecuador's Ecuavisa.
Life Story ©Tom Hugh-Jones 2014