BBC, Discovery confirm UKTV channels break-up, SVOD plans

The BBC and Discovery have confirmed plans for a break-up of UKTV channels, and unveiled what BBC director general Tony Hall has described as the corporation’s “largest ever content sales deal” as part of a new SVOD offering. 

Discovery is to take full control of lifestyle channels including Good Food, Home and Really, while BBC Studios will take the remaining seven channels, including Alibi, Dave, Drama, Eden, Gold, Yesterday and W, alongside digital player UKTV Play and the UKTV brand.

The channels join Discovery’s existing portfolio of 16 channels in the UK, including Discovery Channel, TLC, ID, Animal Planet, Eurosport, Quest and Quest Red and the Quest OD video-on-demand service. Following completion, James Gibbons, EVP and GM for the UK/IRL/ANZ and commercial development for Discovery EMEA, will manage the lifestyle channels as part of Discovery’s UK portfolio.

The BBC has said its seven entertainment channels are the “most closely aligned” to its own content strategy and supply, with BBC programmes delivering around half the viewing for these seven channels, and accounting for around 95% of BBC Studios’ content on UKTV today.

Following the changes, the entertainment channels will continue to operate under the UKTV brand out of UKTV’s offices and BBC Studios will look to grow investment into UK programming, including original content, for the channels it will own.

Following completion, Marcus Arthur, president of the UK, Ireland and ANZ for BBC Studios Distribution will also assume the role of CEO for UKTV. Arthur, who joined BBC Worldwide in 1991, previously held the roles of MD of BBC Magazines and MD of global brands and new ventures, and sits on the UKTV Board.

The deal is expected to complete this spring.

BBC Studios’ acquisition of the seven channels comes with a price-tag of £173m, which includes a balancing payment in relation to the channels acquisition and the assumption of £70m of debt, currently financed by Discovery.

Discovery will also receive at least an additional £10m from UKTV, as the parties will share the existing cash on the company’s balance sheet, reflecting outstanding dividend, and other ancillary value transfers to Discovery through the transaction.

BBC Studios and Discovery have also agreed a short-term programme licensing deal for the supply of BBC Studios lifestyle content to Discovery’s UKTV channels in the UK.

David Zaslav, President and CEO of Discovery, said: “As the two market leaders in landmark natural history and iconic factual programming, Tony and I look forward to working together again – our teams represent over 100 years of combined experience. Discovery will be taking that expertise and creating the definitive global streaming product for curious and passionate viewers of all generations who want the most trusted, family friendly storytelling in the world.

“From the planets to the poles, and documenting every species in between, the world has always been part of Discovery’s DNA. It is who we are. Telling these stories is our mission and it is more important now than ever before. The new platform will be the first global direct-to-consumer service with the category’s most iconic IP including the Planet Earth series, future sequels and spin-offs to all existing landmark series, and new exclusive natural history and science programming coming in the future. There is tremendous value in the marketplace for these programming categories which have broad appeal and strong multi-generational engagement, and we hope to fill the void in the global marketplace for a dedicated high-quality product.”

Tony Hall, Director-General of the BBC, added: “The BBC makes outstanding natural history and science programmes. They are ground-breaking and demonstrate the quality and depth of our know-how. It is vital that we keep investing and growing them for the future. This is our largest ever content sales deal. It will mean BBC Studios and Discovery will work together to take our content right across the globe through a new world-beating streaming service. Global subscribers are in for a real treat: the best content on a great new platform.

“This is brilliant news for audiences here as it will enable the BBC to invest even more in factual programming for them. That’s also why BBC Studios taking control of the UKTV channels that best fit our programmes is good news. It means a secure future with long-term commercial returns. The UKTV team has done a fantastic job and I am delighted that will continue.”

Discovery-led SVOD offering

The public broadcaster also confirmed that Discovery is to launch a global SVOD service powered by the corporation’s natural history content – plans that were first reported in February. Under a 10-year deal, the Discovery-led platform will be populated by the BBC’s existing and future natural history content, including Planet Earth titles and content from other categories spanning science and technology, adventure and exploration, history, space, animals.

The 10-year content deal is effective in all territories outside the UK, Ireland and Greater China, and will make Discovery the exclusive global home of BBC landmark natural history programmes in SVOD, including Planet Earth, Blue Planet and Life. The deal also includes future BBC-commissioned landmark series from BBC Studios, following their linear TX.

Discovery has also acquired SVOD rights to hundreds of hours of other BBC programming across factual genres.

This content will form one of the pillars of the new SVOD service, which will also include some of the best of Discovery’s programming library, original content created for the service, and experiences and offerings that go beyond video.

The service will launch by 2020 and will form a key part of Discovery’s unique and growing portfolio of direct-to-consumer services. These services will also be made available to distribution partners for retail.

Meanwhile, Discovery and BBC Studios have also signed a development deal to create new landmark factual content for Discovery for both linear and digital distribution.

The BBC and Discovery’s relationship spans close to 25 years. The broadcasters first linked in 1996 for a $600m global content and network partnership, and re-upped the deal in 2002, and again in 2010. Over the years, titles to have emerged from the partnership include Life, Frozen Planet, Blue Planet and Wonders Of The Solar System.

The partnership came to an end in 2013 by mutual agreement.