BBC Touts Progress on Gender Pay Gap, Warns of West Coast "Threat to British Content"

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The U.K. public broadcaster in its annual report says BBC Worldwide, which after the end of the fiscal year was merged with its production arm, posted higher earnings of $157 million.

The BBC in its annual report for fiscal year 2017-18, published Wednesday, touted improvement in its gender pay gap, amid pay cuts for some top-earning male on-air stars, and highlighted continued challenges from U.S. streaming and technology giants, such as Netflix, Amazon and Apple.

The U.K. public broadcaster once again highlighted its important role in showcasing British content and culture around the world.

Last year, the BBC disclosed, for the first time, the amounts paid to staff and talent earning more than 150,000 pounds ($200,000), with much debate focusing on the gender gap in top pay. Back then, 76 percent of these top on-air earners were men, excluding BBC Studios, whose inclusion would have improved the picture for women.

For the latest fiscal year, which ended in March, the BBC said that figure declined to 66 percent, with management revealing that it has further dropped to 60 percent. "The pay between men and women has narrowed, with the number of women paid over 200,000 pounds ($265,000) increasing from seven to 14, and the number of men paid over 500,000 pounds ($663,000) reducing from five to three," it said.

The changes show up in the reports gradually as many pay changes are introduced early in the calendar year, just before the start of the new fiscal year in April. The BBC also said that changes to high earners' pay often take more than a year to take full effect.

Former Top Gear host and Radio Two DJ Chris Evans had made 2.2 million pounds in fiscal year 2016/2017, almost five times more than the highest paid woman, Strictly Come Dancing presenter Claudia Winkleman, who took home 450,000 to 500,000 pounds. For the latest fiscal year, the figures amounted to 1.66 to 1.67 million pounds ($2.20 to $2.21 million) and 370,000 to 380,000 pounds ($490,000 to $504,000), respectively.

Winkleman remained the highest-paid on-air woman at the BBC for the fiscal year. The highest-paid male on-air talent of the fiscal year was sports commentator and former soccer star Gary Lineker with 1.75 million pounds ($2.32 million). Among the other high earners is talk show host Graham Norton, whose pay reached 600,000 to 610,000 pounds ($795,000 to $809,000), according to the report. But other high-earning male on-air talent saw pay decline.

BBC director general Tony Hall in a press briefing again emphasized that the broadcaster had made key progress on the gender pay gap, but more work remains to be done. He also reiterated the BBC's target for 2020 of having all leadership and on-air presenting roles equally divided between men and women.

Last week, the U.K. public broadcaster had unveiled that it has reduced its mean gender pay gap from 10.7 to 8.4 percent and its median gap from 9.3 to 7.6 percent in the latest fiscal year.

Asked about how only two women are in the top 20 earners at the BBC, Hall said: "That's not good enough. I expect more women to be in the top 10.”

Management otherwise focused much attention on competition from U.S. streaming and technology giants, with Hall mentioning Netflix, Amazon and Apple. 

"The market around us is becoming more global and competitive," BBC chairman David Clementi said in the annual report. "We face a threat to British content from the west coast of America, and we need to respond to the rapidly changing habits and needs of our audiences in the digital age."

Hall in the report said his team remains focused on "building a BBC that is able to meet the challenges posed both by the changing habits of young audiences and the global shift in content production toward a small number of U.S.-based competitors." Arguing that "homegrown, British content has never been more under threat," he said that today's media environment is "increasingly global and more and more dominated by a small number of U.S.-based giants with extraordinary creative and financial firepower."

Hall acknowledged in the annual report that this "has brought real benefits for audiences by driving quality and choice." But he added that this has also "driven up costs across the market" at a time the BBC's budget has "become increasingly squeezed, and our ability to fund original British content has diminished." 

Hall concluded that "reflecting the U.K., its culture and values to the world" is a key part of the BBC's public service mission, especially "at a time when the U.K. feels increasingly fragmented at home and is seeking to redefine its identity abroad." And he highlighted that the merger of BBC Worldwide and BBC Studios creates "a single organization focused on producing the highest-quality, homegrown content," which is "the best way of ensuring that the BBC can help safeguard the future of British content and continue to play its crucial role in supporting the success of the U.K.'s creative economy." 

Hall also said during a press conference that it is not all about highlighting the threats of tech giants. "We are working with Netflix, we are working with Apple, we are working with all," he said. "But what I think we got to do is think very carefully whose brand are we building and are their opportunities away from them coming together with the right people in areas that really matter to us."

One key focus this fall will be discussion about the BBC's future focus, with Clementi and Hall saying the current level of services was likely not sustainable at current license fee funding despite cost cuts and new revenue from BBC Studios. 

Hall last year had said that the future of British TV shows, such as Sherlock and Broadchurch, was "under serious threat" amid the rise of Netflix, Amazon and Apple and other industry changes. He said there was a danger that the level of original production in the U.K. would be shrinking. 

"My own view is that there is so much more that the BBC can do for the U.K. and also for the U.K. globally," Hall told reporters Wednesday. "I have seen firsthand what an extra 85 million a year, the biggest increase we have ever had in the World Service budget…a couple of years ago, can do to.” He added: “If you look at what Apple, Netflix etc. are doing in this country, there is a very, very clear role that sets us apart from what they are doing. They are providing services that lots of people want. I do enjoy it myself. But actually the fundamentals of how we ensure that dramas are made about things that matter to us and our lives, new comedy is commissioned and experimented on, these things cost money."

He concluded: "There is a danger…that the amount of production in this country will shrink over time, and I think the answer to that is investing more."

In a chart of its annual report, the BBC even detailed how much its drama unit delivered in the latest fiscal year compared with Netflix hit The Crown. It said BBC Drama for a budget of 97 million pounds, or around $130 million, "the same cost as two (seasons) of Netflix's The Crown, produced 15 series with about 85 hours of programming. The report said they were viewed by 74 percent of U.K. adults, compared with 14 percent for The Crown, with an appreciation score of 8.7 out of 10, compared with 8.2 for the Netflix show.

Hall didn't detail what the BBC could do to change the game, but once again highlighted that what the public broadcaster does outside the U.K. was "up for grabs," adding that it could launch more services like streaming video service BritBox, a joint venture with ITV and AMC Networks. 

Asked about the status of discussions about a possible joint streaming service with other British public service broadcasters to take on streamers at home, Hall said he wouldn't comment beyond saying that "we are talking, of course, with our colleagues at ITV, Channel 4 and others about our future.”

BBC Worldwide, the commercial arm of the public broadcaster that was after the end of the latest fiscal year merged with production arm BBC Studios with the combined operation getting the name BBC Studios, reported full-year earnings before interest, taxes, depreciation and amortization of 118.3 million pounds ($157.1 million), up 42 percent compared with the 2016/2017 result due to "a strong performance in content sales, cost efficiencies across branded services and overhead savings, which offset significant currency pressure and a decline in consumer products."

Revenue dropped 2 percent to 1.04 billion pounds, or $1.4 billion, from 1.06 billion pounds. The company cited, among other factors, a "continuing decline in the DVD market and fewer U.S. production hours on Dancing With the Stars."

BBC Studios for its first year of operation, before its merger with BBC Worldwide, posted earnings before interest, taxes, depreciation and amortization of 7.2 million pounds ($9.6 million), including production tax credits, on revenue of  432 million pounds ($573.4 million). The company highlighted that it produced three of the five most-watched programs of 2017 in the U.K., namely One Love Manchester, Strictly Come Dancing and Blue Planet II.

Said Tim Davie, CEO of BBC Studios and formerly CEO of BBC Worldwide: "BBC Worldwide entered the merger with BBC Studios from a strong position. Joining our world-class distribution capability with the U.K.'s most awarded production company was the most natural step to keep us both fit for the future." He added: "I am confident about the prospects of the new BBC Studios and what we can achieve together."