ITV reported a complete drop in sales as the production arm of its company, hit by Hollywood’s writers and actors strike, overshadowed its more enticing advertising figures.
The revenue for Britain’s largest commercial free-to-air broadcaster fell by 7 percent to £887 millions in the first quarter, compared with £952millions the previous year.
ITV Studios, which produced The Resistant Traveler and The Gathering during this period for Apple TV+, reported a 16 percent drop in revenue from £457 to £382 in 2023. The company said that this was due to industrial action, and “weaker demands from free-to air broadcasters in Europe” who had been holding off spending until they saw more certainty on the advertising market.
The decline in advertising sales was a drag, as they had recovered from a tough economic period. ITV predicted that advertising sales would increase by 12 percent in the second quarter, boosted by the Euro 24 soccer competition which begins next month.
Investors were encouraged by the firm’s assurance that they are hitting their targets and by its increased confidence in marketing.
ITV is Britain’s largest commercial broadcaster. It is a member of FTSE 250 and has a market capitalization of approximately £3 billion. ITV produces a lot of content, which it then sells to its rivals. It is also a major broadcaster and advertiser.
Carolyn McCall, ITV’s chief executive, stated that the company is on track to achieve savings of £40 million this year. She said, “ITV is executing its strategy successfully.” Over the course of the year, we expect ITV Studios to have revenues that are broadly flat. Our pipeline is strong, and we have good demand for quality content, as our customer base diversifies towards streaming. The phasing and delivery of our programmes are heavily weighted in the second half of the calendar year, with Hell’s Kitchen US and The Better Sister.
ITV launched its streaming ITVX service last year. McCall stated that it “deliver double-digit growth both in digital viewing and in digital advertising revenues in first quarter, and we expect to continue strong growth both throughout the entire year”. The total number of viewing hours on all platforms by ITV viewers increased by 16 percent in the first quarter. ITV also had over 90 per cent share of the top 1,000 commercial broadcast TV shows.
The company has reiterated that it expects to reach £750 million in digital revenue by 2026.
Johnathan Barrett at Panmure Gordon said that ITV’s advertising results “indicate a healthy start” and, along with other data, they “create the most optimistic background for business-to-consumer media since early 2020 and could boost valuations in the subsector”.