Subs growth, production and IP to be motors of BBC revenue growth
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Editor
| 10 June 2021
In a frank and detailed declaration of intent as it struggles to balance cost and Licence Fee freezes, BBC Director General Tim Davies has revealed that corporation is ramp up its non-UK revenue generation activities.
BBC corporate 25March2021
Speaking at the FT Future of News Summit, the DG eschewed comment on the furore surrounding the recent revelation of Martin Bashir’s alleged deception in gaining his landmark interview with Princess Diana and the topic of culture wars and wokeness affecting BBC output.

Instead, Davie focused on the means through which the BBC would respond to the financial headwinds that corporation was facing in the present and would likely be affected by in the short-term.

The DG told delegates that there was a balancing act to take as the BBC needed to keep delivering competitive margins even though the business was secured by ongoing revenues. The situation has been made more stressful by the shift of the younger elements of the BBC’s reach to digital platforms such as Netflix and Amazon. He cautioned that flowing current advice and simply moving to a digital model in the next five years would not necessarily be just a case of “cash and creative” and that as ever the BBC would have to justify finance.

“Look at the debt profile on these journeys…I think we're balancing [and] I do think it's slightly complicated for us. I don't like adding complication for the sake of it. There are some areas where you're creating content together [with the digital giants]. Whether it's major natural history landmarks, some of these really big dramas were actually with co- production partners, and [it’s a] balanced decision about whether you're buying all the rights upfront and putting [content] into your own service, or you're going into co- production, limiting your cash risk upfront. And actually that works because the primary revenue for me is, of course, making sure the Licence Fee is great value for money.”

“My B2C strategy is very simple. It's not focused on politicians or anyone else. It’s focused on do you and you and your family get £159 pounds of value in every household. And in some ways, it's not [with] coproduction in securing that content. It is probably one of the key things of jeopardy for the BBC so it's not necessarily all about direct to consumer.”

Davie pointed the way for the BBC to have a blended future, with income coming from the Licence Fee, direct government funding and commercial revenues. Yet he accepted that as regards the latter area, the BBC currently had “quite a very low gearing.” This was likely to change.

“BBC Studios is in a unique position to grow its IP. There are two areas where our commercial revenue looks very exciting. One is production, you know, what we've been making is incredible, world class. Think about our natural history unit, or our documentary unit, or our dramas. Now we make for anyone. The other is subscription. If you take [SVOD joint venture] BritBox, you'll take some of our DTC plays. Lots of growth there. So I think the advertising [segment is worth] hundreds of millions. We've got traditional channel business. There will be more blending models where you've got advertising, an ad-funded and advertising video-on-demand, but that's not the real area of growth for us; the real areas are subscription growth and production revenue and IP growth. They're the real motors of the business going forward.”