The National Audit Office has released a report on the BBC’s commercial arm, BBC Studios, calling for it to do more to generate new intellectual property.
The report shows that BBC Studios has returned £1.9 billion to the BBC by substantially growing its income and profits – reaching £1.8 billion and £202 million in 2023-24 – “but needs to continue to evolve in a dynamic market to meet ambitious growth plans.”
In 2023-24, BBC Studios’ income and profits dropped due to market conditions felt across the industry and its investment in digital services such as BBC.com, U and BritBox International
The NAO report found that these challenging market conditions could impact BBC Studios’ ambition to double its size between 2021-22 and 2027-28.
That report said that as streamers have become more prominent commissioners of BBCS content “this has led to an increase in the number of BBC Studios’ productions undertaken on a ‘work for hire’ basis where the IP and distribution rights are retained by the streamer” and while “‘work for hire’ can be highly profitable to BBC Studios in the short to medium term, this does not generate longer-term returns through the sale of distribution rights.”
The report said that although BBC Studios has “diversified its production income, as part of a mixed portfolio of production work, it has not yet met its targets for generating new IP” and that “it remains reliant on the IP from BBC programmes created before the 2018 merger. Of the ten titles from its production business which provided the most profit to the BBC in 2023-24, only one was from new IP generated by BBC Studios.”
The report recommended that BBC Studios “should review the risks associated with not meeting its targets for generating new BBC Studios-owned IP.”
Gareth Davies, head of the NAO, said: “Following its merger with BBC Worldwide in April 2018, BBC Studios has succeeded in delivering increasing returns to the BBC.
“Realising its ambitions for continued growth in turnover and profit will mean successfully navigating a rapidly changing and highly competitive global market. Key to this will be developing new high performing content for which the BBC owns the intellectual property.”
The BBC responded to the report saying “We thank the NAO for the recommendation. We recognise the importance and value of new content and will ensure that we track new IP and our mix of income sources across our portfolio via monthly and quarterly performance packs and report to the Studios Executive Board on a regular basis.”
Responding to the NAO’s report into the economy, efficiency and effectiveness of BBC Studios, Tom Fussell, Chief Executive Officer, BBC Studios, said: “We welcome the NAO’s positive assessment of our business and its recognition that we have adapted our strategy and diversified our business in response to changing market conditions and audience behaviours. We’re a trusted supplier of platform-defining shows to both the BBC and global streamers; we bring international audiences impartial, trusted news and the best of British streaming through the world’s biggest English language news website and our Britbox service; and we’re home to some of the world’s most loved entertainment brands, from generational children’s hit Bluey to established favourites like Doctor Who and Strictly Come Dancing/Dancing with the Stars that touch the hearts of audiences around the world. This success gives us a strong foundation for our future growth ambitions and we are grateful to the NAO for their recognition and recommendations.”
Jon Creamer
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