Channels provides a global showcase for the best of British TV via a portfolio of 41 channels, 29 of which are BBC-branded. In the UK our pay-TV joint venture with Virgin Media, UKTV, provides a secondary window for BBC programming.
Overall, Channels delivered sales of £262.6m, an increase of 16.4% on 2008/09, and £39.2m in profits, an impressive 34.2% up year on year.
The year's focus was consolidation and growth of our owned & operated (O&O) thematic channels, rolled out from 2006 and subsequently driving increased distribution. Year-on-year O&O revenue was up 29.7%, driven mainly by subscription income resulting from additional carriage in Australia of CBeebies and BBC Knowledge and full-year revenues from prior-year channel launches in Australia, Scandinavia, Africa and Latin America. While the global multi-channel TV advertising industry declined 7.1% in 2009 (PricewaterhouseCoopers), Channels grew its international advertising sales by 41.3%. Profits generated by this portfolio more than doubled.
In the UK, re-branding of the UKTV portfolio that began in 2007/08 was completed. A newly re-branded Good Food channel (previously UKTV Food) premiered in July to complement our magazine and website.
In Europe, BBC Prime was re-branded as BBC Entertainment to bring the channel in line with the O&O portfolio and programming hours were increased. In Scandinavia, a deal with Sweden's Com Hem led to the launch of BBC Knowledge and BBC HD. The business saw significant growth in advertising sales - in Africa by 97.3% and in Poland by 61.6%.
A full year of equity participation in Animal Planet Europe, part of our joint venture with Discovery Communications Inc (DCI), also increased overall profit.
BBC America had its best-ever ratings, owing to the success of Torchwood and Doctor Who. Distribution grew to 67m homes, BBC America HD launched in July, and a dual feed was launched to deliver the same primetime schedule on both US coasts. The process of bringing affiliate sales in-house (currently managed by DCI) began with the appointment of a new team. BBC World News America, our US-facing nightly bulletin, had an outstanding year, winning two Peabody Awards, a News & Documentary Emmy® and two RTCA David Bloom Awards. In Canada, Channels has a joint ventutre with CanWest for BBC Canada and CBeebies.
Latin American distribution grew through our Televisa partnership for BBC Entertainment and CBeebies. Further carriage deals were secured in Central America and a pan-region advertising sales team was established in Mexico with sales of US$1m (£0.8m) in their first six months.
Our existing brands became available on major platforms in Australia through a distribution deal with AUSTAR. This increased reach for BBC Knowledge and CBeebies. The deal also saw the launch of an HD simulcast of UKTV, our wholly owned entertainment channel. UKTV was Australia's third top performing subscription channel and was once again New Zealand's leading general entertainment channel. CBeebies' first local production - Penelope K, by the way - was commissioned from Blink Films pty (see right).
In Asia, major cable and IPTV deals led to increased distribution in South Korea, Hong Kong and Singapore and revenue increased by 70.4%.
BBC Worldwide Ad Sales reports through and represents Channels and serves three other stakeholders: World News, BBC.com and Lonely Planet. Despite a challenging year in global advertising markets, overall sales remained flat year on year representing actual share growth for all stakeholders. Whilst BBC America and BBC.com enjoyed double digit year-on-year growth (up 22.1% and 41.7% respectively), BBC World News had a difficult first half, reflecting disproportionate cuts in pan-regional advertising budgets, but successfully recovered growth in the second half.
In 2010/11 we will launch new channels in the US and take BBC HD into more markets as well as exploring new opportunities in Western Europe and Asia. We will continue to invest in our O&O channels, grow our global Ad Sales operation and develop our localisation strategy by investing in more co-productions and original commissions.
Our new commission, Penelope K, by the way, starring Amanda Bishop and created by acclaimed children's producer Michael Bourchier, made its debut on Australia's CBeebies in April 2010. As well as being shown on our other CBeebies channels, it will be distributed by BBC Worldwide in markets not covered by the channel.