Watson began his career as an actor at the age of sixteen on Australian radio, before moving to the UK in 1955. He was soon hired by ATV and in 1956, joined Ned Sherrin and Noele Gordon in Birmingham to establish the base of ATV Midlands where his job was as Head Of Light Entertainment.
In this role, he created many programmes for the station with his first big hit being the live daily chat show, Lunchbox. It ran from 1956 to 1964 to over 3,000 editions with its presenter, Noele Gordon, becoming a regional celebrity. In 1958, Watson submitted a proposal to ATV for a new Midlands based soap opera, however it wasn't until 1964 that Lew Grade, head of the company, granted approval for a series. Initially called The Midland Road, the project was renamed Crossroads by Watson just before its run began. Created by Hazel Adair and Peter Ling, it achieved audiences of 18 million.
After ten years producing Crossroads and eighteen years at ATV, he decided to return to Australia in 1973. Upon his return home, he took up the post of head of drama at Reg Grundy Productions. Thanks to his popular British soap, he was able to create many more series in Australia including Until Tomorrow (1975), The Young Doctors (1976), Glenview High (1977), The Restless Years (1977), Prisoner (1979), Taurus Rising (1981), Sons and Daughters (1981), Waterloo Station (1983), Starting Out (1983), Possession (1985), Richmond Hill (1988). The Young Doctors, Prisoner, Sons and Daughters and Richmond Hill later aired in the UK.
The prominence he gained from Sons and Daughters helped his idea for Neighbours to be picked up by the Seven Network in 1985. After being cancelled by Seven that year due to low ratings, it switched to the Ten Network at the start of 1986 and slowly its ratings climbed. The show still airs on channel 11 and is the longest-running drama series in Australian television history. At the 47th Annual TV Week Logie Awards held on 1 May 2005, Neighbours became the 22nd inductee into the TV Week Hall of Fame.
Watson also dabbled in television in the US, producing Dangerous Women, a short-lived soap opera based on the Australian Prisoner series.
Watson is a shy man and rarely gives interviews. He is now retired and has not produced any new television drama since 1992.