Discovery and BBC Studios planning global streaming service

Discovery and BBC sign major global content partnership and agree on future of UKTV channels

Discovery, Inc. and BBC Studios today jointly announce a series of agreements, reigniting their historic relationship with a significant multi-million pound global content partnership spanning a library of premium factual series to power a new global streaming service, and a bespoke development deal for BBC Studios’ iconic genres of natural history, animals, adventure, science, travel, space, history and civilization documentaries. Additionally, the two companies have concluded the future of UKTV’s channels business in the UK with a structured split that complements the strategic focus and commercial business of both organizations.

The new ten-year content partnership, effective in all territories outside the UK, Ireland and Greater China, will make Discovery the exclusive global home of BBC landmark natural history programmes in SVOD, including the Planet Earth, Blue Planet and Life collection of titles, the recently lauded Dynasties and others, as well as future BBC-commissioned landmark series from BBC Studios, following their linear transmission. Discovery also acquires SVOD rights to hundreds of hours of BBC programming across factual genres. All of this iconic content will form one of the pillars of a new global streaming 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 well 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 that will enable fans to ‘view and do.’ These services will also be made available to distribution partners for retail.

Discovery and BBC Studios have also signed a bespoke development deal to create new landmark factual content for Discovery that furthers audiences’ discovery of the world for both linear and digital distribution. This deal reunites the two media and entertainment brands that worked together on unrivalled natural history series such as Planet Earth, Walking with Dinosaurs, Life and Blue Planet. The two companies will co-fund a dedicated development team within BBC Studios.

Discovery to take full ownership of UKTV’s lifestyle channels and BBC Studios of UKTV’s entertainment channels

Under the terms of the UKTV deal, which is expected to complete in late Spring 2019, Discovery takes full control of lifestyle channels Good Food, Home and Really, in line with its editorial strategy and further strengthening its global leadership position in factual entertainment. Discovery has an 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. This new agreement strengthens Discovery’s position in the UK as a factual entertainment leader engaging passionate communities of fans on every screen with trusted, high quality brands and content. Following completion, James Gibbons, EVP, GM, UK/IRL/ANZ and Commercial Development, Discovery EMEA, will manage the lifestyle channels as part of Discovery’s UK portfolio.

BBC Studios acquires the remaining seven channels – Alibi, Dave, Drama, Eden, Gold, Yesterday and W – along with digital player UKTV Play, and the UKTV brand. These channels are the most closely aligned to its own content strategy and supply, with BBC programmes currently delivering around half the viewing for these seven channels, and accounting for around 95% of BBC Studios’ content on UKTV today. Following these 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, UK, Ireland and ANZ, BBC Studios Distribution, will also assume the role of CEO, UKTV. Marcus Arthur, who joined BBC Worldwide in 1991, has previously held the roles of Managing Director, BBC Magazines and MD, Global Brands and New Ventures, and sits on the UKTV Board.

Financial terms

As part of the UKTV agreement, BBC Studios will make payments totalling £173m to Discovery. This includes a balancing payment in relation to the channels acquisition and the assumption of £70m of debt, currently financed by Discovery. This will be financed through existing borrowing facilities. 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 Agreement for the supply of BBC Studios lifestyle content to Discovery’s UKTV channels in the UK.

David Zaslav, President and CEO of Discovery, says: “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, says: “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.”