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BBC Worldwide's Tim Davie says deals with top talent are not off the table BBC Worldwide's Tim Davie says deals with top talent are not off the table
(2 months later)
This week MediaGuardian 25, our survey of Britain's most important media companies, covering TV, radio, newspapers, magazines, music and digital, looks at BBC Worldwide.This week MediaGuardian 25, our survey of Britain's most important media companies, covering TV, radio, newspapers, magazines, music and digital, looks at BBC Worldwide.
The eye-watering £31m that Jeremy Clarkson and Top Gear executive producer Andy Wilman made in just a few years partnering with BBC Worldwide may make for uncomfortable headlines. Yet even though the BBC has now unwound this partnership, Tim Davie, the new chief executive of the corporation's commercial arm, says he would do a similar deal again under the right circumstances.The eye-watering £31m that Jeremy Clarkson and Top Gear executive producer Andy Wilman made in just a few years partnering with BBC Worldwide may make for uncomfortable headlines. Yet even though the BBC has now unwound this partnership, Tim Davie, the new chief executive of the corporation's commercial arm, says he would do a similar deal again under the right circumstances.
Davie has been parachuted in as a safe pair of hands at what some argue is a business that strayed too far from its core remit of generating extra revenue from existing BBC brands under former chief executive John Smith. But he is not going to be scared off from striking deals he thinks will be commercially beneficial.Davie has been parachuted in as a safe pair of hands at what some argue is a business that strayed too far from its core remit of generating extra revenue from existing BBC brands under former chief executive John Smith. But he is not going to be scared off from striking deals he thinks will be commercially beneficial.
"I will continue to be flexible and look at options on an individual [talent] basis," says Davie. "The idea of us going into a partnership and creating something highly profitable for licence fee payers, and inevitably for those individuals, I wouldn't rule out in the future.""I will continue to be flexible and look at options on an individual [talent] basis," says Davie. "The idea of us going into a partnership and creating something highly profitable for licence fee payers, and inevitably for those individuals, I wouldn't rule out in the future."
He admits that he has set a "very high hurdle" for such deals in the future, while pointing out that they can pay off handsomely, with the Clarkson deal making £17m for the corporation over five years.He admits that he has set a "very high hurdle" for such deals in the future, while pointing out that they can pay off handsomely, with the Clarkson deal making £17m for the corporation over five years.
BBC Worldwide reported a healthy 55% surge in pre-tax profits to £160.9m in the year to the end of March, thanks in part to proceeds from the sale of assets such as Lonely Planet, as revenues rose 3% to £1.16bn. In its annual report the sale of the travel guides publisher, which resulted in an £80m loss and led to a rap on the knuckles for Worldwide from the BBC Trust, is called the symbolic "end of an era" of what was arguably overly aggressive expansion.BBC Worldwide reported a healthy 55% surge in pre-tax profits to £160.9m in the year to the end of March, thanks in part to proceeds from the sale of assets such as Lonely Planet, as revenues rose 3% to £1.16bn. In its annual report the sale of the travel guides publisher, which resulted in an £80m loss and led to a rap on the knuckles for Worldwide from the BBC Trust, is called the symbolic "end of an era" of what was arguably overly aggressive expansion.
Davie says that he intends to make public his new strategic vision for BBC Worldwide in October. A sensitive issue will be sorting out a remuneration policy that has seen headline-hitting pay days for Smith – who made more than £4m in his last four years – and which Davie admits will be overhauled. "If our system doesn't pass the simplicity, accountability and transparency test we won't implement it," he says.Davie says that he intends to make public his new strategic vision for BBC Worldwide in October. A sensitive issue will be sorting out a remuneration policy that has seen headline-hitting pay days for Smith – who made more than £4m in his last four years – and which Davie admits will be overhauled. "If our system doesn't pass the simplicity, accountability and transparency test we won't implement it," he says.
The new-look BBC Worldwide will focus on familiar objectives such as becoming more international (just 4% of revenues come from Asia – "we're at the starting gate," says Davie), through launching more TV channels and building its position as the biggest seller of programmes outside of the US studios.The new-look BBC Worldwide will focus on familiar objectives such as becoming more international (just 4% of revenues come from Asia – "we're at the starting gate," says Davie), through launching more TV channels and building its position as the biggest seller of programmes outside of the US studios.
BBC Worldwide's engine is sales and distribution, the division that sells shows from Doctor Who to Call the Midwife around the world and which accounts for 50% of total profits.BBC Worldwide's engine is sales and distribution, the division that sells shows from Doctor Who to Call the Midwife around the world and which accounts for 50% of total profits.
Another area targeted for further growth is BBC-branded channels. There are already 34 globally, including the BBC America cable channel, which account for almost 32% of BBC Worldwide's profits.Another area targeted for further growth is BBC-branded channels. There are already 34 globally, including the BBC America cable channel, which account for almost 32% of BBC Worldwide's profits.
Given this, some observers doubt Davie has the right credentials for the job. "He has no experience of TV, content, international distribution, this is not a world he understands at all," says one former BBC executive. "He is enormously confident in his own abilities but is he the BBC's man, or does he have his own vision?"Given this, some observers doubt Davie has the right credentials for the job. "He has no experience of TV, content, international distribution, this is not a world he understands at all," says one former BBC executive. "He is enormously confident in his own abilities but is he the BBC's man, or does he have his own vision?"
Davie is bullish while remaining pragmatic, mindful of the recent failure of the BBC's channels in India. "You will continue to see the roll-out of BBC channels in markets around the world," he says. "We will be very selective, we are not going to do everything everywhere just to plant flags. I am not willing to have a loss-making channel for a long period simply to have a presence."Davie is bullish while remaining pragmatic, mindful of the recent failure of the BBC's channels in India. "You will continue to see the roll-out of BBC channels in markets around the world," he says. "We will be very selective, we are not going to do everything everywhere just to plant flags. I am not willing to have a loss-making channel for a long period simply to have a presence."
He identifies the building of the business in the US and its $600m (£393m) BBC America operation, which increased revenues by 27.8% thanks to a significant rise in the number of homes it is in, as a top priority.He identifies the building of the business in the US and its $600m (£393m) BBC America operation, which increased revenues by 27.8% thanks to a significant rise in the number of homes it is in, as a top priority.
Despite the growth curve one former executive describes BBC America as "underperforming", pointing out that it is low down on US viewers' electronic programming guides, with Davie conceding it is "still a relatively small channel".Despite the growth curve one former executive describes BBC America as "underperforming", pointing out that it is low down on US viewers' electronic programming guides, with Davie conceding it is "still a relatively small channel".
Another critical issue is the development of the international, paid-for version of the BBC iPlayer, to build up download and streaming revenues as the DVD market continues to wither away.Another critical issue is the development of the international, paid-for version of the BBC iPlayer, to build up download and streaming revenues as the DVD market continues to wither away.
It is in 16 countries with the pilot programme extended to autumn, taking testing to a drawn out 18 months. Some believe launching in the world's biggest TV market, the US, could be counterproductive.It is in 16 countries with the pilot programme extended to autumn, taking testing to a drawn out 18 months. Some believe launching in the world's biggest TV market, the US, could be counterproductive.
"The iPlayer is hugely expensive to run and the powerful cable companies would see it as cutting across their deals," says a second former BBC executive. "It would put the US business in jeopardy in the long term, it would be daft to launch.""The iPlayer is hugely expensive to run and the powerful cable companies would see it as cutting across their deals," says a second former BBC executive. "It would put the US business in jeopardy in the long term, it would be daft to launch."
While Davie has prioritised boosting digital income, which only accounts for 13% of total revenues, he does not say whether he will commit to a US subscription iPlayer service.While Davie has prioritised boosting digital income, which only accounts for 13% of total revenues, he does not say whether he will commit to a US subscription iPlayer service.
"I want a bit more info on the trials," he says. "In October with the strategy you will see a very clear choice on which digital platforms we want to bet on.""I want a bit more info on the trials," he says. "In October with the strategy you will see a very clear choice on which digital platforms we want to bet on."
Perhaps the biggest long-term question is whether BBC Worldwide will ultimately need significant private investment to achieve its global ambitions. It has a relatively paltry £350m in funding facilities, and Smith explored the possibility of private investment.Perhaps the biggest long-term question is whether BBC Worldwide will ultimately need significant private investment to achieve its global ambitions. It has a relatively paltry £350m in funding facilities, and Smith explored the possibility of private investment.
Davie addresses the funding issue without prompting. "The obvious question here to ask is will BBC Worldwide require investment over time?" he says. "But that is a secondary question on what are the priorities and I believe the potential for organic growth is significant. The primary thrust is to grow brands organically and would we need capital to facilitate that … is a secondary question."Davie addresses the funding issue without prompting. "The obvious question here to ask is will BBC Worldwide require investment over time?" he says. "But that is a secondary question on what are the priorities and I believe the potential for organic growth is significant. The primary thrust is to grow brands organically and would we need capital to facilitate that … is a secondary question."
The numbersThe numbers
Pre-tax profits: £160.9m, up 55%Pre-tax profits: £160.9m, up 55%
Revenues: £1.16bn, up 3%Revenues: £1.16bn, up 3%
Figures are for year ending 31 March 2013Figures are for year ending 31 March 2013
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