BBC looks abroad to make up lost licensing revenues

The BBC’s commercial arm BBCWW (BBC Worldwide) is to create more of its own content designed specifically for foreign audiences rather than just act as distributor for UK domestic programming. This is part of the corporation’s strategy to reduce dependence on license fee income from UK households as this declines in real-term value and appears increasingly unsustainable in the face of the seismic changes across broadcasting as a whole. Currently the UK TV license fee from which the bulk of the BBC’s annual revenue of around £3.6 billion ($5.6 billion) is derived has been fixed at its 2010 level of £145.50 until 2016.

With the BBC committed to free access to programming in the UK, most of its commercial income, beyond magazine sales, has come from abroad. Part of this has come from overseas subscriptions to its iPlayer catch up and on-demand portal, accessible in 11 western European countries and one or two others on iPads via an app at around £5 ($8) per month. This global iPlayer app includes some features not in the U.K. version, such as the ability to stream shows over 3G as well as Wi-Fi, and a download feature to store programs on the iPad for offline viewing. But some content is not available because of rights restrictions outside the U.K.

BBCWW also earns income through sale of rights to BBC content to overseas broadcasters and distributors, exploiting the widespread demand for popular English-language content. But it now recognizes the potential for producing content geared specifically to overseas markets, adopting different formats. It also recognizes that overseas distributors often prefer to obtain longer runs of shows originally produced for the U.K. market.

Speaking at the Informa Digital TV CEE conference in Krakow, Poland, Liam Keelan, global editorial director of BBC Worldwide Channels, said he wanted to position BBC Worldwide as a “content creator” rather than purely a distributor.

Keelan added that BBC Worldwide would increasingly commission more of its own content, highlighting the South African version of "Come Dine with Me" as an example of a U.K. format that played well in an international market. He said BBC Worldwide would seek to make a mix of global and local commissions.

“We are putting more and more money into our own commissions,” he said.

Keelan also highlighted the example of BBC America’s thriller Orphan Black as the kind of show that could play well internationally.

As a result of growing international activities, BBCWW has made increasing contributions to overall revenues. In the year to 31 March 2012, underlying sales excluding magazines reached £1.085 billion, 5.4 percent up on the previous year. On that basis it will be many years before the BBC becomes self-funding through commercial sales largely overseas, but that is the long-term ambition.