±«Óãtv

±«Óãtv Worldwide Ltd will today publish its Annual Review for 2010/11 showing a double-digit rise in headline profit – up 10.3% to £160.2m (2009/10: £145.2m), its highest level ever. Profit before tax, including discontinued operations, of £201.2m includes a gain from the exit from a channels investment sold to partner Discovery in November.

The strong levels of growth have helped lift the overall return to the ±«Óãtv by 8.6% to £181.9m (2009/10: £167.5m).

The results mark ±«Óãtv Worldwide's most successful year in taking great British content to the world, driving growth and exports to benefit the wider creative industries. The company grew headline sales by 7.8% to £1157.7m in the 12 months to 31 March 2011 (2009/10: £1074.2m). International sales increased by 9.6% to 55.5% of total headline sales as the business sharpens its focus on international markets.

Digital sales, predominantly online and mobile, increased to 8.1% of net sales. ±«Óãtv.com, ±«Óãtv Worldwide's flagship online property, has seen revenues increase by 113% in the US. In the year ahead, the company will pilot the global ±«Óãtv iPlayer, develop a bigger games portfolio and launch more mobile services and apps. To date, downloads of ±«Óãtv Worldwide apps have exceeded 12m, the Top Gear and Doctor Who pages on Facebook have over 11.8 million fans and an average 68 million visitors per month visit its websites.

Announcing the results, John Smith, Chief Executive of ±«Óãtv Worldwide, said ±«Óãtv Worldwide's role in driving growth for the wider UK creative industries and reinvesting money back into the ±«Óãtv is more important than ever in a tough financial climate.

John Smith said: "This was ±«Óãtv Worldwide's most successful year ever in championing great UK content around the globe. By offering world-class British programming and brands that resonate with global audiences, we were able to lift revenues beyond a billion pounds for a third year in succession and also deliver impressive results.

"These results have enabled ±«Óãtv Worldwide to return an increased amount back to the ±«Óãtv - supporting development of world-class, original content in the context of a tighter financial settlement.

"±«Óãtv Worldwide also distributed programmes and formats produced by more than 300 UK independent producers in 2010/11. I am proud of the unique role we play in helping our sectors of the UK creative industries to expand through exports."

John Smith said the performance was underpinned by ±«Óãtv Worldwide's strategy, with progress delivered against all five key strategic objectives:

DIGITAL TRANSFORMATION: "With sales from digital activities, mainly online and mobile, now at 8.1% of total net sales, we are on track to meet our target of 10% by 2011/12."

BECOMING MORE INTERNATIONAL: "International sales increased by 9.6% to 55.5% of headline sales. We have focused in particular on the English-speaking markets of the USA and Australia. In June 2010, we appointed Herb Scannell to head up our North American businesses and drive further growth. In this context, ±«Óãtv America had its best year ever with primetime ratings among 25 – 54 year olds up 37% year on year. We are also recruiting EVPs to drive medium-term growth in other key regions including Asia, EMEA and Latin America."

GROWING THE SCALE OF OUR TV CHANNELS: "Headline sales in the Channels business rose 18.8% with the continued roll-out of ±«Óãtv-branded channels and improving advertising demand. We launched nine new channels during the year including CBeebies in South Korea, ±«Óãtv Knowledge in Italy and New Zealand, a dedicated feed for ±«Óãtv Entertainment in India and ±«Óãtv HD in a number of markets."

INCREASED INVESTMENT IN CONTENT: "Headline sales in the Content & Production business rose 9.1%. Core to our mission is delivering high-quality distinctive content to audiences around the world and we invested £101m in acquiring rights to great content during the year. Given the needs of the different markets we serve, we will provide bespoke local programming as well as heavily investing in the best UK productions. We will continue to support emerging independent companies through development finance, co-production deals and international distribution."

MORE DIRECT CONNECTIONS WITH CONSUMERS: "Understanding consumer preferences and developing a closer relationship with audiences around the world is key to our strategy. Our top five brands – Top Gear, Doctor Who, Lonely Planet, Dancing with the Stars and ±«Óãtv Earth – account for 27% of the company’s total sales, and around 45% of our sales now come from 12 brands. Over two million people visited a ±«Óãtv live show somewhere in the world in 2010/11, bringing total attendance at our events to date to over nine million."

Other highlights in the year included:

• ±«Óãtv Worldwide's DVD business performed extremely well in the UK, despite a challenging market, finishing 2010 as the UK’s fifth-largest distributor and outperforming the market in the US, where overall DVD sales declined;
• Impartial news and lifestyle information was distributed to a monthly average of 58m users by ±«Óãtv.com as the site moves rapidly towards profitability;
• 74,000 hours of high-quality UK programming were sold to over 690 customers from the USA to Kazakhstan to Indonesia.
• The top five selling programme titles (by value) in 2010/11 were Doctor Who: Series 5, Sherlock: Series 1, Top Gear: Series 15, Top Gear: Series 16 and Human Planet;
• Overall, ±«Óãtv Worldwide’s debt fell during the year from £102.6m to £52.3m.

John Smith added: "±«Óãtv Worldwide’s results were driven by a number of key factors including continuing success of our programme sales and DVD businesses, growth in our TV channels as well as ±«Óãtv.com's excellent momentum towards profitability."

Robert Webb, Chairman of ±«Óãtv Worldwide, said: "±«Óãtv Worldwide operates as one of the engines of the whole UK creative economy and our record performance last year allowed us to deliver on our core aims. We reinvested £182m back into the ±«Óãtv and also increased our support of the UK creative economy. We are confident that we will build on our current success in the year to come."

For further information please contact:

Ben Wilson
020 8433 2506
Ben.Wilson@bbc.com

Charlotte Elston
020 8433 3995
Charlotte.Elston@bbc.com

NOTES TO EDITORS

About ±«Óãtv Worldwide
±«Óãtv Worldwide Ltd is the main commercial arm and a wholly owned subsidiary of the British Broadcasting Corporation (±«Óãtv). The company exists to maximise the value of the ±«Óãtv’s assets for the benefit of the licence-fee payer and invest in public service programming in return for rights. The company has six core businesses: Channels, Content & Production, Brands, Consumers & New Ventures, Sales & Distribution, Consumer Products and Magazines. Digital activities are embedded across all these businesses. For more information, please visit or follow us at .

Business Highlights 2010/11

Channels – Offers a global showcase for the best of British television via a portfolio of 31 international, ±«Óãtv-branded TV channels, and 10 further channels are operated through a joint venture with Virgin Media – UKTV. Also manages advertising and affiliate sales for ±«Óãtv World News.

• Headline sales rose 18.8% to £312.0m, owing particularly to growth in subscriber revenues in the UK, USA and Scandinavia, and ad sales up overall by 26.9%. Headline profit of £40.1m was achieved in spite of the loss of the Animal Planet share of profits (sold to partner Discovery in 2010) and investment in channel launches.
  
  
• ±«Óãtv America, ±«Óãtv Worldwide’s leading independent US entertainment cable channel with 68.5m subscribers, had its best year ever, with primetime ratings among 25-54 year olds up 37% year on year.

• Nine new channels were launched this year, including CBeebies in South Korea, ±«Óãtv Knowledge in Italy and New Zealand, a dedicated feed for ±«Óãtv Entertainment in India, and HD services in a number of markets. 

• In the UK, the company’s joint venture with Virgin Media, UKTV, grew ad sales revenue by 15.6% year on year and now has a 5% share of the pay-TV market.

• At year end, ±«Óãtv Worldwide had 343m subscriber homes in over 100 countries (including UKTV in the UK, ±«Óãtv World News and the relay of public service channels in Eire and Benelux).

Content & Production – Provides TV producers with investment and expertise in return for rights. Also develops its own TV formats and runs a global network of production studios.

• Headline sales rose by 9.1% to £102.8m, mainly due to commissions for local versions of ±«Óãtv Worldwide’s TV formats secured in France and India.

• Headline profit at £7.9m was down this year because of costs and investment in Dancing with the Stars in the USA – which has just completed season 12 to record ratings – and investment in the company’s new production facility in Los Angeles.

• New development deals were completed with Fresh One Productions, Raise the Roof Productions and Oxford Film and Television, and a new partnership struck with Sharp Jack Media.

• All ±«Óãtv Worldwide's production bases secured commissions in the year, including Top Gear for Nine (Australia) and HISTORYâ„¢ (USA), Dancing with the Stars for TF1 (France), Sony Television (India) and ABC (USA) and The Week the Women Went for Star Plus (India).

• A significant development was making sci-fi drama Torchwood: Miracle Day as a co-production with ±«Óãtv Cymru Wales and US cable channel STARZ, a major event for fans premiering around the world since last Friday (8.7.2011).

• The LA production base has a number of scripted and unscripted formats in development, including Criminal Justice, Mirrorball and I, Claudius.
  
  

Digital Entertainment – Comprises ±«Óãtv.com and the investments made into two start-up digital businesses – the global ±«Óãtv iPlayer and a Games Unit.*

• Headline sales for Digital Entertainment grew by 86.9% to £27.1m. Total digital sales across the company, primarily from online and mobile, increased by 31.5% to £81.9m.

• Headline losses decreased significantly to £(6.8)m from £(17.0)m, reflecting the move towards profitability of ±«Óãtv.com, offset by the investments in a new Games Unit and the global ±«Óãtv iPlayer.

• We continued to launch new products for ±«Óãtv.com, including a customised US edition, an Asia business edition, a travel section, and Apple iPhone and iPad apps, contributing to ±«Óãtv.com revenues increasing by 113 in the US%.

• A Games Unit based in Los Angeles and London has been set up to address this growing opportunity. The team is developing digital games linked to major brands across all major platforms including Sony, Microsoft and Nintendo consoles, mobile and tablet devices, and Facebook.
  
  

Brands, Consumers & New Ventures – Maximises the value of major brands, including Top Gear and Doctor Who, across all of ±«Óãtv Worldwide's businesses. Manages Lonely Planet, Live Events, Licensed Products and book publishing partnerships.*

• On a memo-reported basis, headline sales from key brands across all businesses were £308.1m, a rise of 12.6% year on year.

• Within the operating business, headline sales were up 4.2% to £86.0m. Headline losses for the year rose slightly from £(9.0)m to £(10.3)m in 2010/11 relating to a mix of factors including the strength of the Australian dollar and a challenging travel guide market affecting Lonely Planet, as well as strong competition in the children’s merchandise market.

• Despite guidebook sales across all publishers being down 24.0% in key territories compared to 2007/08, Lonely Planet maintained revenues year on year and increased market share in key territories to achieve a five-year high of 21%.

• Live Events had a successful year, launching two new initiatives, Doctor Who Live (a touring arena show) and the Doctor Who Experience (an interactive exhibition). Over two million people visited a ±«Óãtv Worldwide live show somewhere in the world in 2010/11, bringing total attendance live events to date to over nine million.

• ±«Óãtv Worldwide’s Facebook pages for Top Gear and The Stig now have over 11m fans and around 25% of traffic to topgear.com now comes via Facebook.

• A new venture was formed to produce three films for theatric distribution under the natural history umbrella brand ±«Óãtv Earth, including Walking with Dinosaurs 3D.
  
  

Sales & Distribution – Sells TV programmes to customers around the world on behalf of rights owners – the ±«Óãtv and independent production companies. ±«Óãtv Worldwide is the largest distributor of finished TV programmes outside the major US studios.

• Sales & Distribution is ±«Óãtv Worldwide’s largest profit centre, this year generating a headline profit of £58.8m on headline sales of £230.5m. Both sales and profit increases were a result of a strong programme slate and new sales strategies being implemented successfully.

• In the Americas a rise in reported revenues came from exploiting the strength of ±«Óãtv Worldwide’s catalogue, a more focused sales strategy for key brands and titles, and an upturn in the economic environment in most markets.

• EMEA and Asia Pacific saw good revenue growth, with EMEA benefiting from good sales on key brands including Top Gear, Doctor Who and BAFTA-winner Sherlock.

• This year's top three programme brands by revenue were Top Gear, Doctor Who and Waking the Dead. Top Gear has now sold to 198 countries and territories.

• This year saw the most successful UK ±«Óãtv Showcase yet, with 12% increase in attendance and a growing number of delegates from emerging markets. ±«Óãtv
  
  Showcase is the only international TV sales fair to be hosted by a single distributor – Satellite fairs are also held in Rio de Janeiro and Beijing.

Consumer Products – Creates products that complement programming and expand consumers' enjoyment of media brands. It comprises 2 entertain (our global DVD and download-to-own business), music licensing and publishing.*

• Consumer Products generated an increase in profits of 13.7%, due to a strong performance by both the physical and digital video businesses. Sales increased slightly to £234.8m.

• In the first year of full ownership of 2 entertain - despite a challenging domestic DVD market – the company finished 2010 as the UK’s fifth-largest distributor.

• John Bishop Live was the fastest selling stand-up debut DVD ever.

• Innovation is essential in the mature DVD market. Gift packaging and releasing titles in hybrid formats (a digital copy packaged with DVD and/or Blu-ray disc) has helped 2 entertain maintain sales.

• £9.1m or 3.9% of the business’s revenue is now accounted for by download to own. This almost tripled versus last year, reflecting the growth in the market and the success of key brands including Doctor Who and Top Gear.

• In the UK, 2 entertain is iTunes' number one TV partner, and there have been over 20m downloads in total globally to date.

Magazines – Extends viewers’ enjoyment of ±«Óãtv programming through a portfolio of high-quality consumer magazines and exhibitions. The majority of this business has been held for sale during the year.

• Overall, headline sales were marginally down, by £0.6m, reflecting the held-for-sale status of magazine-related joint ventures Dovetail Ltd (subscription management) and Worldwide Media Ltd (Indian publishing business).

• Headline profit increased by 9%, or £1.8m, with strong growth from specialist titles such as Good Food and olive.

• ±«Óãtv Magazines retained its position as the No.1 UK publisher for subscriptions in the latest Audit Bureau of Circulation figures (July-December 2010).

• The business now has  56 licences for international editions of its titles in place across 60 territories. Lonely Planet magazine has been a particular success with eight international editions in print at year end and two more due to launch in 2011.

• Digital developments were a priority for ±«Óãtv Magazines, with the launch of 15 of its titles on digital publishing store , Focus magazine’s interactive iPad app and a Good Food Magazine app.

• In April 2010, ±«Óãtv Worldwide announced it would be seeking a partner for its magazines business.

* Reorganised after year end

Ben Wilson/Charlotte Elston