Home Analysis UKTV focused on originals and AVOD refresh – and broadcaster is keen...

UKTV focused on originals and AVOD refresh – and broadcaster is keen to explore addressable TV

UKTV's new crime drama Traces
Share on

UKTV, one of the UK’s most important channel groups, which takes a near 8% share of commercial impacts for adult viewers, has been demonstrating the benefits of focusing on more original content. The company more than doubled its development budget in the last 12 months and UKTV originals counted for seven of its top ten programmes during the year, and eight-from-ten if you look at the most watched shows in the 16-34 age group.

“Originals are bringing in big [audience] numbers and commissioning more of our own content enhances our reputation,” says Marcus Arthur , who was appointed CEO at UKTV after its full acquisition by BBC Studios last June. “They are really important in renewal negotiations for our pay channels, too – they are helping to drive quality programmes and quality audiences.”

He adds: “It is really attractive for advertisers, like premium brands, if we have programmes that are very recognisable, and highly rated by consumers, and which drive big audiences.” UKTV is represented by 4Sales, the Channel 4 sales house that also represents BT Sport, and the focus on more originals is good for that relationship.

UKTV has a multi-faceted distribution strategy, with some of its seven channels (Alibi, Eden, Gold and W) only available via Pay TV platforms (as linear, catch-up and box sets). The others (Dave, Drama and Yesterday) are available on free-to-air (as well as Pay TV) in linear, catch-up and box set forms. In most cases the content is ad-supported. The exceptions are the pay channels on the BT TV and TalkTalk platforms (no ads) and box sets on Sky.

The channel group itself serves as a key distribution window partner for BBC commissioned content. BBC channels and iPlayer provide free distribution without ads in the UK, and BritBox now provides an outlet for BBC content in SVOD, whereas UKTV offers BBC content free but with advertising.

The relationship between UKTV and the BBC is a close one. In a deal with Discovery last year, the BBC increased its stake in the company from 50% to full ownership, although the deal saw three lifestyle channels (Really, Home and Good Food) move to Discovery. UKTV is now wholly-owned by BBC Studios (the commercial subsidiary of the BBC) – and Arthur is also President, UK & Ireland at BBC Studios.

BBC Studios was itself formed in April 2018 by the merger of BBC Worldwide and BBC Studios, bringing content financing, development, production and sales under one roof. BBC Studios is a content giant – it makes 2,500 hours of programming a year (including in partnership with the independent production sector) and has revenues approaching £1.5 billion.

UKTV is well known for airing classic BBC shows that have already enjoyed a life – and extensive brand building – on the BBC. But the strategy is for a balanced portfolio and Arthur points out: “We spend more money on our originals [UKTV commissioned] and third-party acquisitions than we do on programming licensing agreements with the BBC.”

He does not believe BritBox in the UK will have an impact on the content UKTV can offer, as it comes off the BBC, or the audiences UKTV can therefore reach. “There is clear blue water between what they [BritBox] are offering and what we provide,” he says, pointing to clearly defined free and pay markets.

The current split for UKTV programme investment is actually 65% directed to originals and acquisitions – putting BBC licensing firmly in the minority. And with originals, you get to decide your own windows, of course.

UKTV is not finished with its push towards more of its own content. Arthur says that “if anything, we will be more focused on the commissioning side of the business in future – that is becoming more and more important.”

Marcus Arthur, CEO of UKTV and President for UK, Ireland & ANZ at BBC Studios

He believes the formation of BBC Studios and its full ownership of the seven remaining UKTV channels will help the broadcaster expand its production and distribution ambitions. It may have been difficult for UKTV to afford to make the forensic crime drama Traces on its own, without the BBC Studios follow-on rights possibilities, he admits.

Traces was the first UKTV original commission on Alibi, one of the pay channels, and is considered the crowning achievement for that channel in 2019, reaching a seven-day audience of 660,000 after its December launch, a figure that rose to one million over Christmas. Arthur views this as a typical tier-one production whose ROI benefits from overseas sales – “and the means of travel is through BBC Studios distribution.”

The 2020 originals slate includes the six-part thriller We Hunt Together, commissioned by UKTV, made by BBC Studios and distributed by BBC Studios. The broadcaster said in a press release recently: “We are looking to operate on a worldwide scale, creating bold, ambitious shows, building on our 2019 successes.”

“I believe this is a watershed moment for UKTV,” Arthur says, pointing to the BBC Studios ownership and the new opportunities around content. Whereas seven of the top ten shows were original commissions in 2019, he wants to see a figure of ten from 15 for the current year.

Just as strong originals help to boost a broadcaster’s reputation with advertisers and audiences, so they open doors in the creative business. “We work with some of the biggest producers and directors in the world and that allows us to do bigger and better things,” Arthur declares. The original content investment is creating a virtuous circle.

We should expect 10-12 new comedy shows form UKTV in the next 18-24 months, with the flagship comedy channel Dave, a free-to-air favourite with 16-34s, the obvious beneficiary.

Arthur confirms that when it comes to high-end drama, the ROI is easier to achieve on pay channels (Traces and We Hunt Together were both commissioned for Alibi, one of the UKTV pay channels). But overall, there is a balanced investment strategy across the board. There is no deliberate content investment skew towards youth programming to explain a 14% increase for 16-34 audiences in 2019, for example.

The UKTV portfolio grew 4% in 2019 despite the loss of the three lifestyle channels to Discovery (the figures are for the remaining UKTV-seven). Share of commercial impacts among adults grew by 5% in the six months from June.

Looking beyond content, the next big focus at UKTV is UKTV Play, the (ad-supported) streaming platform. This saw a 43% jump in usage during 2019, helped by availability on more platforms. The service has over 3 million registered users, but Arthur says the broadcaster “is only halfway up the hill” with its on-demand offer and a strategy refresh is looming.

There will be a greater focus on AVOD and its monetisation, full stop. Beyond that, “we are going to strengthen the product, the content and the user experience.”

Looking further ahead, Arthur is open to the idea of making UKTV inventory available for addressable TV advertising. 4Sales signed a deal with Sky last year to use AdSmart for linear TV (not digital). “I imagine that as [4Sales] work through that, we will be first in the queue to find out what that means for us.” Noting that UKTV is an important part of the 4Sales offer to the advertising market, he adds: “If they ‘build’ it, we will come.”

Share on