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BBC in Talks With Other Broadcasters About Combating FAANGs; Reports Higher Earnings

BBC director general Tony Hall said Wednesday his organization is talking to fellow broadcasters in the U.K. about how they can band together to fight the FAANG companies that are sinking billions of dollars into original programming.

The BBC is reportedly weighing a streaming service in association with Channel 4, ITV, and NBCUniversal, an idea that British media regulator Ofcom has indicated it would look positively on. Hall would not address that in detail at an event with reporters Wednesday, but acknowledged that “we are talking, of course, with our colleagues at ITV, at Channel 4 and others about our future.”

He added that the BBC was mindful of efforts by broadcasters in other countries to work together to combat the threat from the FAANGs (Facebook, Apple, Amazon, Netflix and Google). “We shouldn’t moan about the success that Amazon, Apple, Netflix et al. They are doing really great services,” Hall said. “But we do need to think about what the French have done, what the Germans have done, and come together in every way we can to stand up for what is wonderful about this country and the public-service broadcasting ecology.”

Asked by Variety whether the FAANGs presented a programming opportunity as well as a threat, Hall said there were chances to co-produce and work together. But he suggested that this might not be a long-term solution to the challenge those companies pose.

“We are working with Netflix, we are working with Apple, we are working with all [of the FAANGs], but I think what we have to do is think whose brand are we building, and are there opportunities away from them to think about coming together with the right people to areas that really matter to us, and which are sustainable in the long term and which can build the brand of the BBC,” Hall said. “That’s what we think about month in, month out.”

The British pubcaster combined its commercial division, BBC Worldwide, and its production unit, BBC Studios, in April, and they now operate as a combined entity under the BBC Studios banner. On Wednesday, it reported separate yearly financial figures for each of the divisions to March, ahead of the merger.

A reduced production commitment on “Dancing With the Stars” on U.S. network ABC was partly responsible for a 2% reduction in revenues at BBC Worldwide last year, the BBC said. Worldwide reported revenues of £1.04 billion ($1.37 billion) and EBIDTA profit of £118.3 million ($156 million), up 42% year on year. Worldwide returned £209.9 million ($277 million) to the main BBC, which is predominantly funded by license fees.

The previous incarnation of BBC Studios reported sales of £432 million ($570 million) and EBIDTA profit of £7.2 million ($9.5 million). At Worldwide, the U.K. remained the biggest earner, generating £363.4 million ($480 million) of the total revenues. The U.S. was second, with £258.2 million ($341 million). Overall program sales revenue came in a £422.8 million ($558 million), a fractional increase from the previous year. “Blue Planet II” was the bestselling show of the year, selling into 234 territories.

In its annual report, the BBC could not resist taking a swipe at Netflix hit “The Crown.” The report noted that, for the same amount ($130 million) the streamer is reported to have spent on two seasons of the royal-family drama, which has been seen by 14% of British adults, the BBC has made 18 series, which have been seen by 74% of the same sample.

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