A Netflix-style US service is a smart move for the BBC

Thomas McMullan Read more September 18, 2015

Yesterday the BBC announced that it would be launching an online subscription service – à la Netflix – in the US next year. While big BBC shows such as Dr Who and Sherlock are already available in the US through BBC America, plans revealed by BBC director-general Lord Hall point to a new, OTT (over-the-top) internet model for American audiences.

A Netflix-style US service is a smart move for the BBC

At the biannual RTS Convention in Cambridge, Hall said that the new service would offer American BBC fans “programmes they wouldn’t otherwise get, showcasing British actors, our programme-makers and celebrating our culture”.

The BBC may be talking up the appeal to US audiences, but the real reason for this move is much closer to home. With licence-fee funding coming under an increasing amount of pressure, the BBC is understandably looking to international revenue as a way to supplement its income. Perhaps more importantly, it demonstrates that the BBC is able to keep pace with cord-cutting new contenders – Netflix, Amazon Instant Video, Now TV, HBO Go and Hulu to name a few, not to mentioned a rumoured new streaming service from Apple.

bbc

The Conservative government has embarked on an extensive review of the broadcaster, spanning everything from funding and internet activities to programme output. Described by Labour’s Tristram Hunt as a “worrying assault” on the corporation, the review is calling into question the very nature of the BBC. Culture secretary John Whittingdale has gone so far as to suggest that the BBC’s commercial arm, BBC Worldwide, could be sold off.

A Netflix-style international service is a clear confrontation to such threats – showing that the BBC has the energy to shake up its business model and tap into new sources of international revenue. “Overall, we think our plans will increase commercial returns from Worldwide to the BBC to £1.2 billion over the next five years – more than 15% higher than the returns of the previous five years,” said Hall.

(Above: BBC director-general Lord Hall)

It has the potential to be a very smart move for the BBC. The corporation has a strong international reputation for high-quality TV programming, and coupled with an enormous back catalogue of shows, there’s more than enough to differentiate it from the growingly indistinguishable mass of other streaming services. BBC shows are also proven to have a lot of value, as is BBC talent. Jeremy Clarkson, James May and Richard Hammond signed a deal reported to be worth £160 million for a 36-episode Top Gear-style series for Amazon Instant Video.

The success of this model also stands to benefit UK viewers in numerous ways. If high-quality shows perform well internationally, that could act as justification for investing in scripted dramas instead of cheap-to-produce reality shows. The extra money could also be fed back into creating quality UK-specific content. Boosting the BBC’s income will also generally keep the corporation alive and ad-free, which is always good.

BBC Studios

The BBC is also to section off its in-house production unit into a new wholly owned subsidiary of the BBC Group, called BBC Studios, which will have an initial revenue of £400 million.

The BBC say that BBC Studios will work in the market to return profits to the BBC Group, but some have said that tendering out hit shows signals a movement towards increased commercialisation, or even privatisation.

“Turning a large part of BBC production into a commercial operator, rings major alarm bells about the public-service future of the BBC itself,” said Gerry Morrissey, general secretary of the UK’s media and entertainment trade union, BECTU. “Without clear and certain guarantees that BBC Studios will never be sold off, our opposition to the venture remains.”

This new studio system, along with a new distribution platform, shows how important international markets are to the BBC’s future. Ideally, all of this will result in a perfect circle of international exports bringing cash into the BBC public service. If it goes wrong, however, this new commercial entity could overstep the original values of that public service. What’s certain is that, as the corporation faces enormous pressure to justify its existence, plans like these seek to reframe the BBC as a keen player in the multi-platform generation.