On Our Radar: Deals we are paying attention to for their impact on industry.
BBC Studios and Discovery, Inc. have signed a $392 million (£300 million) programming deal that will make Discovery the exclusive owner of BBC programming streaming rights.
The deal gives Discovery rights to the BBC’s extensive library of natural history and wildlife programming, including any future BBC Studios shows once they have aired on linear television, or real-time TV that broadcasts scheduled programs, for the next 10 years. Under the deal, Discovery will pay the BBC around $23 million each year.
The two broadcasters will also co-produce new content for Discovery across fact-driven genres such as natural history, travel and science. Content produced through this agreement will air in the U.K. through the BBC.
The BBC’s director-general Tony Hall called the deal the “largest content deal the BBC has ever done.”
Discovery’s yet-to-be-named streaming service is expected to launch by 2020 with a price as low as $5 per month. BBC programming, which “will form one of the pillars of a new global streaming service,” will be available on the platform everywhere except in the U.K., Ireland and China.
“There is tremendous value in the marketplace for these programming categories, which have broad appeal and strong multigenerational engagement, and we hope to fill the void in the global marketplace for a dedicated high-quality product,” David Zaslav, president and CEO of Discovery, said.
The deal reunites the BBC with Discovery. The two previously worked together on docuseries like Planet Earth, Walking with Dinosaurs and Blue Planet, but ended their agreement in 2013.
This is a major first step for Discovery in its goal to expand further into subscription services targeted at its properties’ individual audiences. Discovery owns a number of cable staples like HGTV, Food Network and Discovery Channel.
In addition to the programming deal, Discovery and BBC Studios also announced a split of their joint venture UKTV, which Discovery acquired a stake in following its 2017 $14.6 million merger with the E.W. Scripps Company. BBC Studios will pay Discovery around $226 million for seven UKTV channels — Alibi, Dave, Drama, Eden, Gold, Yesterday and W — which account for 95% of BBC Studios’ content on the service. Discovery will take full ownership of Good Food, Home and Really.
The $226 million UKTV transaction includes the BBC’s assumption of around $91.2 million of debts, which is financed by Discovery. The company will also receive at least $13 million from UKTV, as the two companies currently share existing cash on UKTV’s balance sheet.