UKTV chief executive Darren Childs has presided over increased audience share, boosted investment in new content and last month revealed that 2014 operating profits had risen to £72.2m. He explains why CEOs in all industries must embrace the transition to digital, retrain for a changed business landscape and not expect their brightest recruits to make tea anymore
Question: what do you get if you cross a reunion of Monty Python with brand new episodes of Red Dwarf and re-runs of Only Fools and Horses? Answer – UKTV, a network of 10 free and subscription television channels dedicated to everything from drama and documentaries to food and comedy.
The joke wouldn’t last a second on Dave, UKTV’s male-skewed station known for its irreverent, audience-capturing, blokey tone – and rightly so. As Britain’s top non-public service broadcast channel, Dave – so named “because everyone knows a Dave” – helped drive UKTV’s highest-ever earnings.
In May, the company reported 2014 revenue at £283m and a nine per cent rise in operating profits to £72.2m. Audience share is up on the back of a £123m investment in content. For chief executive Darren Childs, five years into the job, it is vindication of a strategy he envisioned when he was appointed.
“The biggest challenge facing any chief executive in any single sector right now is this issue of digital transition,” says Childs as he sits down ahead of Director’s photo shoot in east London. “Everything is changing – and it’s changing quickly. Five years ago we were right at the beginning of the biggest phase of disruption in our industry. I genuinely thought – and I still believe – that all the rules were going to be rewritten.”
Television, like so many industries, has changed beyond all recognition in the three decades Childs has been working in it. Viewers may still flock to watch EastEnders and Coronation Street (albeit in far smaller numbers) but business leaders from all sectors will be able to identify with many of the shifts – increased competition, multiple channels, fragmented audiences, start-ups bypassing traditional platforms to compete with incumbents, technology reducing barriers to entry, and Gen Y entering the workforce; not to mention the consolidation of, and increases in, foreign ownership.
This changing landscape provided Childs with the opportunity to “relearn, retrain and get back to grassroots” and to concentrate on a single territory – the UK and Ireland – after two decades in which he had been running television channels in multiple international markets.
He knew the business. In his previous role as managing director of global channels at BBC Worldwide – a joint owner of UKTV – Childs sat on the board. His predecessor, David Abraham, had left for Channel Four six months earlier. In the interim, explains Childs, the business had been “on a kind of hiatus”. Among staff there was both curiosity and concern over where it was going.
“It meant exciting them with a vision that would mean a fair amount of change, ambition and a heck of a lot of hard work… to get us to a point where it would make what we do more interesting and allow us to be more creative, but with a very strong commercial success piece underneath it all.”
Childs knew the risk of implementing a strategy that would require hundreds of millions of pounds of investment and he was determined not to falter. “The chief executive’s job is to get everyone focused in a line,” he says. “Get that right and companies become successful. If you get it wrong they can fail.”
Though it was critical to get his troops pointing in the right direction with a crystal clear view of the strategic end position, he says that wasn’t the end of the process. “I think a lot of organisations go off and do a big strategic plan and then it goes in the bottom drawer and it’s either impenetrable to the majority of people who work in the organisation or it’s just forgotten about for another year when they’ll come out and do another strategic plan. It was very clear in my mind that we weren’t going to go down that route.”
Faced with the growth of online viewership – the iPad had recently launched, while streaming services such as Netflix and Amazon Instant Video were hungry for market share – Childs was clear that the future of the company included significant scaling of the linear (traditional, scheduled TV) business while not being reliant on it.
“It meant being brave enough to disrupt our own business by building our digital transition plan, our digital product and our digital assets. I don’t believe that the linear television experience is finished – the data that we see every day backs up the fact that the majority of people still watch linear broadcast television.
“It’s about being brave enough to go down that route and trust the fact you can follow the consumer. The consumer is virtually always right and they will tell you before your strategic plan what’s of interest to them. We could see a lot of changing viewership behaviour.”
To achieve this, Childs restructured the company so UKTV could become a true force in British television with a focus on innovation and the commissioning of quality original programming.
“It was clear that the success of the business was going to be about a marriage of commerce and creativity. A lot of creative organisations are usually very creative and the commercial piece comes second. But, I believe, in creative industries they are absolutely equal partners. My view was: the more successful we could be commercially, the more successful we would be creatively, because we could take more creative risks, do more interesting work and work with bigger talent.”
Unlocking the creativity in UKTV meant empowering staff to take risks. “How could we stop making derivative content and actually make content that we were really proud of?” Childs asked. In the past year, four of the network’s top 10 programmes have been original British commissions, including the Bafta-nominated Monty Python Live (Mostly) and Storage Hunters UK. The comedy series Crackanory – a 15-minute storytelling programme for adults narrated by comedians including Jack Dee and Harry Enfield – is proof of UKTV’s renewed appetite for risk.
“If you can get the right people in the right place, pointed in the right direction with permission to be taking huge amounts of risk, and be supportive where that risk fails, but also be there to celebrate with them when it wins, that’s how you unlock great creativity in these companies,” says Childs.
Early on in the process, he decided against appointing a chief technological officer so as not to “ghetto-ise” digital. As a result, he explains, employees “who five years ago didn’t think they had a digital bone in their body” are innovating in digital spaces.
Lots of organisations talk about innovation and creativity, but then they don’t innovate the processes that they structure in order to see those projects through, and of course they fail. Innovation’s a big buzzword and I would say a lot more people talk about it than actually do it. To truly innovate you have to look at every single component of the way you run, manage and lead people
And that, he explains, includes chief executives holding a mirror up to themselves. “The digital evolution of business means that everything that I learnt 20 years ago… I now had to actively de-learn it. What was suitable 20 years ago for managers and leaders isn’t the same today, they’re not going to work in 2015 because the pace changes so much more quickly. The ability for companies to come and compete with you and the barriers to entry are substantially lower. Therefore you have to run the business in a very different way.”
Focus on talent
The TV industry, in its quest to future-gaze, has been wrong to focus its conversation on the digital disruption of television when the real debate, says Childs, is on the need to attract the brightest talent.
“It is critical for any leader to realise that the brightest 18-year-old knows they can have the greatest idea which will transform a sector… The number of career options for a smart graduate or great creative is now huge. You have to get yourself into the mind of a 20-year-old or an 18-year-old or a 21-year-old or even a 16-year-old coming out of school. What they are looking for in terms of where they want to work – and how they are treated and respected – is very different now. The days of expectants who want to come in and make tea for somebody for three or four years in order to get their first leg on the career ladder are over.”
To attract such talent, Childs has overseen a restructure of recruitment and retention processes, which have resulted in improved pay conditions, bonuses, apprenticeships and training. “We only want really passionate, energised people who are opinionated and will stand up and debate stuff with us. I hate ‘command and control’ structures. In a creative business environment it stifles innovation, creativity and people’s careers. It stops people doing great work.”
But Virgin Media’s decision to concentrate on its core broadband, cable and telephony business, and sell its 50 per cent stake in UKTV just months after Childs was appointed, forced him to temporarily shift focus. “I was asked to help get the right shareholder round the table… one that could understand the power of great content. I spent a lot of time in lawyers’ offices doing due diligence.” A benefit of the £339m sale to US company Scripps Networks Interactive was a move to purpose-built facilities in west London.
“No one has an office. I don’t even have a desk,” says Childs. “Innovation isn’t going to happen if the top guy is sitting in a corner office that employees can’t get to because there’s an army of personal assistants lined up in front of us. We broke down those structures because we don’t have printing presses or factories – we create ideas!”
While reconstructing the working environment can help bring staff together “in a serendipitous way” to generate ideas in business, Childs says poor management can result in them being stifled. “Once it has to be formalised and you have to have meetings and bucketloads of business plans and Powerpoint presentations to get it, it just kills it. You can’t speak about innovation and then not innovate the processes around it. People talk about innovation and then they still use the same methodology that they use for signing off on a piece of machinery or buying a new photocopier and it’s just not designed to let innovation flourish.”
Of all UKTV’s 10 separate stations, Dave is certainly the most innovative, as well as the most watched. Childs describes the channel as a “phenomenon” and promises, with its commissioning budget up by 70 per cent this year, its best days are still ahead of it. “Dave is a great example of us understanding our audience better than our competitors do. It has tapped into that funny bone of Britain and it understands how to communicate… through content, social media, it just gets that tone of voice right every single time. It really works hard and it takes massive creative risks.”
Meanwhile, the election of the Conservative government just hours before Director’s photo shoot has led to renewed speculation about the future of the BBC. Last summer, BBC Worldwide – the corporation’s commercial arm – rebuffed a £500m bid from Scripps to buy out its stake in UKTV. In March, the Guardian reported Scripps had stepped up pressure with the BBC Trust over the UKTV bid. But Childs won’t be drawn, insisting his focus has to remain on the product and audience.
“As we have become more successful, it’s inevitable that we have become of interest to a number of people but it’s not something we will worry about. It can be a massive diversion and distraction. For us as a management team, and as a company, we focus all day on what we’re doing well. I’ve got to assume that if you keep doing that then everything will work out fine.” Monty Python isn’t alone in looking on the bright side of life. And with Childs’ vision coming to fruition, who can blame him?
1992 BBC Enterprises, Thames Television and Cox launched classic repeats channel UK Gold. Owners changed over the years.
1997 The UKTV network launched when UK Arts, UK Style and UK Horizons joined UK Gold.
2004 Channels were prefixed with the UKTV moniker.
2007 Rebranding oddly titled UKTV G2 as Dave was a success and spurred the company to drop the UKTV moniker and rename all channels.
2013 The UKTV network identity was revived – as “an umbrella brand and watermark of quality”, says Childs.
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