How BBC Studios’ CEO Thinks About Mega-Mergers Reshaping the Media Landscape

Tom Fussell, the head of BBC Commercial, the commercial arm of the U.K. public broadcaster that mainly consists of BBC Studios, of which he serves as CEO, is upbeat.

After all, BBC Commercial, which is mostly driven by BBC Studios, just reported improved full fiscal-year earnings and steady record revenue earlier on Tuesday, helped by the continued success of animated hit franchise Bluey and other factors.

After the financial update, Fussell talked to The Hollywood Reporter about key growth drivers and challenges, recent mega-mergers, such as Paramount’s deal for Warner Bros. Discovery and the just-unveiled acquisition of ITV’s network and streaming assets by Comcast’s Sky.

Among the other topics he addressed are the benefits that BBC Studios has seen from using the power of YouTube, the opportunities in vertical content, his take on the company’s M&A opportunities, the ongoing success of Bluey and the upcoming The Bluey Movie, the future of Doctor Who and the growth of streaming services BritBox International and the documentary-centric BBC Select, part of BBC Studios’ Global Media & Streaming unit. The company acquired full control of BritBox International in 2024. Read Fussell’s thoughts and insights below.

In unveiling the annual results for BBC Commercial, your team highlighted growth in key revenue streams, but also declines elsewhere. Where is the business facing its key challenges and upside?

Overall, it’s stable revenue, with significant growth over the five to six years since I’ve been doing this, and profits were up 17 percent. The growth has come from DTC, including from BritBox in North America and BBC Select in North America. BritBox was growing by about 20 percent, the other by 60 percent. BBC Select now is the USA’s third-largest documentary streamer, and we’re going to heavily invest in both of those businesses.

The content studio had relatively flat revenue, but the margin has gone up significantly because of consumer products. Then you’ve got the sectors where the market is under pressure – areas that are subject to advertising issues or linear decline, pay renewals in those legacy businesses will be going the other way. They’re still high-margin for us. They are still strategically important, but we’re not immune from the market [challenges]. We’re having to lean into operating cost savings.

How do you feel about your content pipeline?

When I look at the content side itself, there is such a strong pipeline in the year we’ve got coming up. We have the premiere of Blue Planet III, with the world’s most loved and respected centenarian [Richard Attenborough] narrating it for us.

Then we’ve got Sid Gentle Films doing Honey, a prequel to Killing Eve, for the BBC. We’ve got Clerkenwell [Films] that has just done Alice and Steve on the back of Baby Reindeer for Disney. They’re doing a Channel Four thriller, partly in the Welsh language, about rock climbing, [called Deadpoint]. I’m not kidding. We showed it to our board, and everyone was holding on with their fingernails. We also got Lookout Point doing Pride and Prejudice for Netflix. We can see from the success on the BBC and on BritBox that The Other Bennett Sister has had how those sorts of shows can travel around the world. So we’ve got a lot coming through.

And tomorrow night after the World Cup semifinal, Fox launches Nation’s Dumbest in the States with Jack Whitehall presenting.

What can you share about BritBox North America subscriber numbers or color?

In the last year, we launched another tier called Premier, which is significantly more expensive and you get early access to programming. So this distorts things – the sub numbers don’t really tell the story. We’re also on a number of different platforms, so the subs don’t tell the story. The revenues are growing 20 percent; the profits are well ahead of where we thought they would be when we bought the business. Our mandate is to grow long-term and sustainably.

We are committed to something called returns to the BBC. When I started, we committed to reaching £1.5 billion ($2.0 billion) over five years. We got one more year to go, and we’ve already done £1.4 billion. So we’re going to beat that number, and our mandate is to keep growing that. BritBox will be one of the big drivers. So we will make sure that it has more British programming. It will help British producers. We also help shows that otherwise wouldn’t get made, export them to the U.S. and help them in distribution around the world. BritBox is a really vital asset for the BBC, but also for the U.K. creative sector, which is under real pressure.

Tell me more about how the BritBox Premier tier has trended.

Like in many businesses, once business models settle down, you don’t really want to be in the middle. So we are seeing some people go with more expensive tiers, and some people going with very low-priced tiers that are ad-funded. BritBox is in a crowded market. It’s a specialist niche service that people really want to have. And its fans love what we give them. So our job really is to make sure the fans are getting served with exactly what they want when they want it. The same [goes for] BBC Select. British history, world history works really well.

Select and BritBox both have got room to grow. At BritBox, you’ve got huge breadth. A Woman of Substance, a Channel 4 show, is in the top 10 shows on Amazon Prime Video channels in the U.S. at the moment. That is up against huge American shows, so BritBox really cuts through.

You mentioned the £1.5 billion target for returns to the BBC and how you’ll exceed that. You have also set the goal of doubling the business of BBC Commercial over several years by 2027/2028. How’s that looking?

It’s still our ambition. The mandate we have from our shareholders is to keep growing long-term. So every now and then, what we have to do is reinvest and double again. What I tell our teams is that once we get access to capital, which will be part of the new BBC charter, our ambition should be to take it to 2027/2028, where we double, and then double it again. So we keep going for the long term. We are investing in commercial news, investing in BritBox and Select, because we know that will pay off in future years. We are investing in the licensee team for Bluey, so that when the movie comes out in August 2027, we’re really in a good place to keep growing.

With investments in growth areas, where do you find cost savings that helped the profitability in your latest fiscal year?

We’re a growing business. So what we’ve been doing and talking to our teams about, and it’s tough messages for them, is that there are certain businesses in structural decline where we have to be more efficient and we have to cut. There, we’ve been cutting programming costs and marketing, as well as overheads, and we have been doing that since this time last year. In the year we’re in now, we’re having to go further because we can see the market forces demanding that. And if we don’t do it ourselves to help ourselves, the market will do it to us, and that’ll be really painful and disruptive. So, we’re in the middle right now of making things more efficient, but we have to do it with [an eye on] our long-term mandate.

[Among things that have been affected by cost reductions are] some of the support services around us, technological changes – AI means that you should be able to do certain things cheaper. We have lots of office space, so maybe we’re going to have to contract some of those things globally, and we’ll look at some of the contracts we’ve got with other people. We want to put as much value as we possibly can into making sure we’ve got the best products, the best marketing, the best content. That is where we want to invest.

You mentioned market challenges in more traditional parts of the business. We have seen many big companies looking to tackle them through mega-mergers, from Paramount buying Warner Bros. Discovery to the Sky deal for parts of ITV. Do you feel the appetite to buy more production companies or do other M&A, and what do other industry deals mean for BBC Commercial?

Buying production companies in the U.K. is probably not in our top 10 of things that we’re looking at. Setting up new labels in the U.K. with talent who may be coming out of some of these mega-mergers, that’s something we’d look at.

On the whole, we’ve been putting our money in the past into development teams on the content studio side. Inorganically, we paid £255 million for the other half of BritBox, and we paid £173 million pounds for the other half of UKTV. So we’re in the market to do those deals, but we need capital to do them.

My view on these mega-mergers is that they mean we’re going to have fewer customers, which is troubling. But it may lead to stronger customers, which is good news. So let’s see how that works. As far as competitors to us: Look, we are Britain’s global content studio. We’re the most respected, most renowned of Britain’s content studios. We’re the only producer with four out of the top 10 on IMDb. My customers, when I speak to them, want to know who’s making the program, and they’re buying the program. They’re not buying the mega-super-business that comes through the front door. It’s about what’s the title and who’s making it? And we’ve got some of the best in the business, and I’m incredibly proud of that.

What we’re really working on is our U.S. business that is growing really well in unscripted under Ryan O’Dowd. Dancing With the Stars had a record finale, so you know about that. The 1% Club has done really well on Fox, and Nation’s Dumbest is launching with Jack Whitehall tomorrow night on Fox. We’ve got a new primetime commission called Dancing With the Stars: The Next Pro with the winner of last year’s Dancing With the Stars, Robert Irwin, which is a new IP for Disney later this year. So we’re really thrilled by the growth we’re seeing in that market.

BBC content has done really well on YouTube, and you have described it as a platform that can be additive. Any other digital moves that you are making or seeing as key opportunities, say in the vertical content space?

I’m glad you asked about this. Vertical video is now a $100 billion and growing business. That’s broadly double YouTube’s own revenue and double Netflix’s revenue. I’m really proud of the work that our team has been doing here, and it’s not just Bluey. We’ve got Top Gear and all sorts of big archive channels doing it, and our viewership there is more than any other U.K. broadcaster and most global SVODs as far as we can see.

Now what we’re doing is boosting the capabilities in the advertising sales space. We’ve got a really good North American advertising sales team, and we’ve got some people joining around the rest of the world. With brand partnerships, we can really start monetizing these things. We’ve grown the traffic, we’ve grown the share. Now we’ll start making some more money with our partners, and I think it’s going to be a really big growth area for us – not just on traditional long-form YouTube, but also short-form YouTube and short-form on Reels and other vertical channels.

The economics are more challenged on some of the vertical video things at the moment. But I don’t think they’ll always stay that way. It’s something where we see growth. FAST is another area where we’re seeing growth. We’ve got over 300 FAST channels now around the world, so it’s just a huge growth area.

We have a very rich archive, a very rich amount of IP, but more so, [content] people come to us on the back of what we’re doing with Bluey and beyond. They say, “Can you represent us and be our operator?” And that’s a big growth area for us. We are Britain’s global content studio. We’re the home of British streaming. But we also have a brand IP powerhouse, and that’s the area that I really want to grow.

How about a potential move into microdrama production?

We are very focused on where the market is going, and then building our capabilities to go there. Vertical dramas are not one of our massive priorities at the moment, but there are other aspects of creating new IP with the content creators. Karl Warner [who was hired by BBC Studios Productions in 2024 from his role as Channel 4’s head of youth and digital to establish and lead a new creative unit within its Global Entertainment business that targets premium long-form and digital formats] is relocating to Los Angeles next month. He’ll help our development teams take more development around the world, but also work with content creators using our IP and their IP to create new shows. That’s an area we want to invest in.

How about AI as an investment area?

We’ve got an AI label under [BBC Studios Productions CEO] Zai Bennett, run by Alice Taylor, who has come from Disney. We’re testing and learning and trying different things there. It’s quite exciting.

Doctor Who is in a rework stage, and you have decided to put the show out to a competitive tender, meaning production companies can bid for it. How do you feel about this franchise’s future?

We’re really energized by entering into that tender process with a view to [having one of our labels] winning it. We remain the distributor. We remain the licensor of the consumer products. We believe in Doctor Who. We’ve helped make it for over 60 years. We want to make it for another 60.

How has the launch of the BBC news paywall in the U.S. and beyond worked out?

We were very cautious because it’s the BBC [and its brand]. We’ve then become braver from December onwards, and it’s really surprised us. It is the world’s largest English-language news website, and we are finding that when people are going over the paywall and subscribing, they are loving what they’re getting. The World Cup has been a big driver for us as well in terms of viewership. When we’re talking about things we’re investing in now, that’s one of them. We just turned on the paywall in Canada last month, and it’s been a year since the paywall first went up, and it’s exactly where we wanted it to be.

There’s always talk about streamers consolidating and/or bundling. What’s been your bundling approach?

We have already done bundles with some U.S. streamers as a way of exposing our content to more people and attracting more subscribers. We’re in conversations with people continually to do that. We have done some successful ones, such as with Starz. We’ve windowed some content on HBO in the States, too. So when it works for us, we’ll do it, with our partners. We do the same with Select. Once you subscribe to BBC.com, you also get access to 1,600 hours of documentaries and podcasts through Select. So that’s working. We’ll look at BritBox and BBC Select bundles, which we’ll do too. We’ve got to look at these opportunities of exposing our content and our brands to other people. When they come to us, they really do like it because we’re putting fans first.