ITV’s digital business is starting to build. The UK network’s revenue from the segment was up £24M ($30.2M) to £106M in the first quarter of 2022 on a year-on-year comparison, a 49% uptick.
Streaming hours were also up 128 million following the move to switch its main digital service from ITV Hub to ITVX, which has launched a slate of original such as Nolly and A Spy Among Friends.
However, the Love Island and Malpractice broadcaster saw its overall external revenues dip 7% from £834M a year ago to £776M this quarter. Within that, Media and Entertainment was down £50M to £495M and ITV Studios was basically flat at £457M.
The M&E division houses the ITV network, which remains reliant on the volatile TV ad market, while ITV Studios key deliveries for the quarter included Nolly, Django for Sky, Big Beasts for AppleTV+ and Queer Eye for Netflix.
“ITV Studios continues to demonstrate significant strategic momentum,” said ITV CEO Carolyn McCall in a trading statement. “With a strong pipeline of content and committed revenues, it is on track to deliver mid-single digit revenue growth over the full year, ahead of the market. This follows record revenues in Q4 2022 and with the phasing of deliveries expected to be weighted to the second half of 2023.”
ITV noted its total advertising revenue was down 10% but that this was “better than the wider TV advertising market,” with digital advertising revenue up 30% at £87M. Total digital revenues for ITVX were up 29% and streaming hours were up 49%.
Though ITV expects digital ads to push revenues up by 20% in Q2, total ad revenue would be “challenging as expected given the current macroeconomic environment.”
McCall said the network “continued to make significant strategic progress in the quarter and all parts of the business performed in line with expectations.”
“ITVX has sustained its strong launch, with a 49% increase in streaming hours and a 29% growth in digital revenue in the quarter. Exclusives such as Nolly and The Twelve attracted new viewers, 80% of whom went on to explore other content on ITVX.
“In addition, live simulcast viewing of our biggest shows and sports events, including Love Island and the FA Cup attracted large streaming audiences.”
ITV once again welcomed the publication of the draft Media Bill, which is updating the legal and regulatory framework for broadcasting and will enshrine prominence for the streaming services of public service broadcasters such as ITV and the BBC. ITV last week reapplied for its TV licenses after the bill was unveiled, with McCall calling it “fundamental to ITV’s future as a PSB.”
A cost saving of £15M is expected in 2023 as part of a plan to cut £50M in spending by 2026. This is on top of the £106M savings program of 2018-2022.
“ITV is successfully executing Phase Two of its More Than TV strategy, despite the current challenging macro and geopolitical environment, as we continue to satisfy the growing demand for content globally and the desire for advertisers to secure both mass reach and targeted digital audiences,” said McCall this morning.