BBC Studios Eyes China Gains

Jon Penn, executive VP for the Asia Pacific at BBC Studios, talked about the growing importance of China to the company’s global business in his ATF Online+ keynote.

Penn was interviewed by former BBC Studios and Netflix CMO Jackie Lee-Joe for the session, titled “The Need for New Partnerships & Collaborations,” as part of ATF Online+’s series of Q&As with industry leaders.

“It’s the Asian century,” said Penn on the region’s importance to BBC Studios’ global business. “The region is an incredible part of the world. It has the most amazing mix of cultures, languages, countries and markets. It’s over half of the world’s population.” BBC Studios operates seven bases across the region, including in Sydney, Singapore and Beijing. “It’s a growing, healthy business,” Penn said.

On the streaming wars, Penn referenced the huge uptick in OTT subs this year across the globe. “The business model in Asia is more AVOD than SVOD, but OTT itself has grown enormously. In China, just this year, there have been 27 million new OTT customers added. That’s more OTT customers added in China than exist in all of Australia!”

The D2C shift will continue, Penn noted, citing the restructures that have taken place across the major U.S. media companies as they position themselves for growth in this space. “We of course need to find our place,” Penn said. “In essence, we’re a content creator and provider. So we can stand off a bit from all the chaos and confusion and competition. We work with those global streaming companies upstream in terms of production and co-production. We supply content to them in many different ways. But of course, we have our eye on the prize of direct to consumer. As a company that has a strong heritage in maintaining our own branded services, we have a play of our own, and that’s BritBox.”

A JV with ITV, BritBox has reached 1.5 million subs in the U.S. “They’ve shown they can carve out a supersized niche,” Penn said. “The service recently launched in Australia and is exploring other markets, he added. “Perhaps some will be in Asia, we’ll see.” The OTT market overall in AsiaPac will exceed the size of the U.S. market in 2021, Penn said.

Asked about linear channels, Penn acknowledged that they are under pressure, but far from over. “For us, in terms of linear pay-TV channels, it’s about the big renewal: when’s it coming up, how are you going to approach it, how much flexibility can you have in partnership terms. But in the back end, we just need to make those services more efficient, and that’s without affecting what customers see and feel and love about our branded services. We’re watching the performance and making sure they live up to the brand promise. But we think they have a good number of years of life left in them. Of course, we need to make sure they are modernized. That’s what we’ve been doing with BBC iPlayer in Asia—building that bridge to the future of what a branded service may look like. How do you curate for a digital-focused audience? So there’s a lot we need to do. And BritBox has our toe in the actual water of streaming itself.”

Discussing China, Penn noted, “Our ambition is to become the media and entertainment industry’s largest partner outside of the studio system. It’s a big ambition. We think there’s a very big business to be built there. And we think we can develop a business in China that will be one of the key pillars of growth in the company overall, not just in the AsiaPac region. We do that by operating across all our lines of business. And we have a lot of flexibility there. We can produce original content for Chinese broadcasters and digital platforms. We can do co-productions with the big VOD platforms, CCTV-9 and the other traditional broadcasters. They’ve been investing in our natural-history content and putting up large sums to be co-pro partners in those. And then content sales,” such as the deal with Bilibili covering some 1,000 hours of factual and scripted content. “We’re working with our customers [in China] in a really sophisticated way and going deep and across all lines of business.”

Asked about how BBC Studios remains relevant in the future amid a rapidly changing media landscape, Penn said, “We have a tremendous, well-known brand, renowned for making prestigious, high-end and valuable content in lots of different genres. The diversity that BBC brings is extraordinary. As I said before, we stand off from this slightly chaotic environment. We’re able to position ourselves. We certainly need to be in the ownership of IP game, which is where we’re at. I think the pure-play distribution model where you just represent someone’s rights is long gone. At a minimum, you have to own IP. We have an eye to the direct-to-consumer future, we’re modernizing our branded services, we’re experimenting with BritBox. I think we’re well-positioned. That does not mean that you don’t have to be constantly vigilant. We have to be nimble, we have to be future-facing, we have to be able to spot those things that are changing and adjust accordingly and set ourselves up for a successful future.”