BBC Worldwide Revenues Dip

LONDON: BBC Worldwide's 2013-14 Annual Review shows a 6.6-percent drop in revenues from the previous year to £1.04 billion ($1.8 billion), but the commercial division did up its returns to the BBC by 11.4 percent to £173.8 million ($296.6 million).

Investment in BBC-commissioned content was also up, by 19.5 percent to £88.9 million ($151.7 million). Headline profit at BBC Worldwide was stable at £157.4 million ($268.7 million).

Commenting on the review, Tim Davie, the CEO of BBC Worldwide, noted: "We have met significant milestones: launching and starting to implement a new strategy; operating as a regionalized organization for the first full year; increasing financial returns to our shareholder, the BBC; and delivering full year profit growth, even after the effects of the strength of sterling."

Davie stated the drop in revenues reflected a "new commercial arrangement for BBC.com, resulting in lower revenue at BBC Worldwide, and last year’s disposal of Lonely Planet. Adjusting for these, our sales performance was broadly flat. Within this, we saw growth from digital clients, advertising sales as well as emerging markets, which offset challenges including pressure on U.S. and U.K. affiliate fees and declining DVD markets. I am particularly encouraged by an improvement in our headline profit margin from 14 percent to 15.1 percent. This is a record for the business."

Davie reflected on the "mixed" market conditions during the year. "The primary and secondary markets for premium TV programs remained robust, helped by a rise in digital services and competition for high-end content. A positive outlook for global pay-TV growth disguises significant variations between markets….This growth is driven by a rapid increase in customer base in the Asia-Pacific and Latin American markets, and offset by slower growth in more mature markets, where carriage negotiations are increasingly challenging. The global DVD market continues to face rapid decline, driven by falling consumer demand, with the rise of cheaper and proliferating digital alternatives, and general downward pressure on consumer spending in much of the developed world."

Davie concluded: "We end the year with a clear strategy and an ambition to deliver sustainable year-on-year growth in financial returns to our parent…. As we look into 2014/15, we are presented with both the challenges and opportunities that come from rapid market development, as incumbents look to secure existing revenue streams in the face of new services and new entrants. We will seek to maximize our total business—helped by being independent of any one platform or pay mechanism—while building our BBC brands and consumer connections for the future. This year will see us step up investment in BBC.com and commence the roll out of three new global genre brands, and launch BBC Store. I am nonetheless confident that we will deliver further returns to our shareholder over the course of the year."