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TV hailed the success of its streaming arm as digital income grew by a better-than-expected 24%, however profits plunged because it poured extra money into the division.
Revenue was near flat for the primary half of the 12 months, regardless of a decline in conventional advertising as streaming service ITVX and the growth of ITV’s studio arm made up for these linear advert declines. Studios know make up greater than half of ITV’s income.
But income have been down by 61%, as prices rocketed. ITV spent an additional £43 million on new programming to attempt to carry folks to ITVX, plus an additional £8 million in tech prices to help the platform. It has added programmes resembling A Spy Among Friends as streaming exclusives at a time when many market-leading streamers like Netflix have been reducing again on content material.
CEO Carolyn McCall mentioned digital spending would peak this 12 months and begin to come down in 2024.
She added: “The continued momentum behind ITV’s strategic transformation delivered strong growth in Studios and Digital revenues in the first half of the year, largely offsetting the expected weakness in the UK advertising market – with total revenue declining just 1% in H1, even in a very tough advertising market.”
Sophie Lund-Yates, lead fairness analyst at Hargreaves Lansdown, mentioned: “ITV’s advertising revenue fell 11% in the first half as it grapples with an increasingly difficult backdrop for linear TV ads. With economic uncertainty mounting and marketers clutching purses tightly to their chest, this was always going to be a difficult time. Away from the short-term bumps, there’s a structural decline happening in the TV space – broadcast ads simply don’t pack the same punch they used to, thanks to the rise of streaming and the fact many of us spend our evenings glued to our phones too.
To that end, it’s encouraging to see the Studios business picking up the pace – making content for the new binge-watching culture is a good place to be. ITV are up against stiff competition here too though and we’re still some way off from ITV being solely reliant on this more lucrative revenue stream. The dividend’s been held which will please investors, but shareholder returns could be fickle in the future if cash needs to be funnelled at new ventures.”
