ITV hit by impact of strikes but digital revenues on track

ITV saw revenues drop in the first quarter as growth in advertising and digital was offset by a year-on-year decline in ITV Studios revenues.

Overall, the UK commercial broadcaster saw total revenues drop by 7% to £887 million.

ITV Studios revenue was down 16% at £382 million due to the phasing of deliveries which the broadcaster said are heavily weighted to the second half, and the impact from both the 2023 US writers and actors strikes and the weaker demand from free-to-air broadcasters in Europe, which it says have been holding back spend until they see more certainty in the advertising market.

The broadcaster expects ITV Studios revenues to be flat for the full year, mostly due to the impact of the writers and actors’ trikes, which are expected to delay about £80 million of revenue until next year.

Media and entertainment revenue was up 2% to £505 million, with total advertising revenue up 3%.

Digital advertising revenue was up 14%. Overall, the digital business grew by 11%, with ad sales growth partly offset by the negative impact of a move to simplify the paid-streaming offering.

ITV said that ITVX’s performance continued to be strong in the quarter, with total streaming hours up 16% and monthly active users continue to grow in line with expectations.

ITV says it remains on track to reach £750 million in digital revenues by 2026.

Carolyn McCall (Source: ITV)

“ITV continues to execute its strategy successfully. Over the full year we expect ITV Studios revenues to be broadly flat. We have a strong pipeline of programmes, good demand for our quality content as we increasingly diversify our customer base towards streamers and the phasing of deliveries is heavily weighted to the second half of the year, including Hells Kitchen US, The Better Sister, A.C.A.B, Showtrial and Ludwig,” said CEO Carolyn McCall, summing up.

“ITVX continued to build on its strong first year and delivered double-digit growth in both digital viewing and digital advertising revenues in Q1 and we expect continued strong growth in both throughout the year.Total advertising revenue grew 3% in Q1, in line with guidance, with good momentum continuing into Q2 benefitting from the Euros in June. H1 TAR is expected to be up around 8%. Our group cost savings programmes are on course to deliver £40 million of savings this year as previously guided.  Overall we expect to continue to make good strategic progress and we remain on track to achieve our KPI targets for 2026.”

The broadcaster reiterated that it expects to deliver cost savings of £40 million this year, including £30 million of additional savings announced during its full-year results.

“Q1 for ITV was always going to look a bit difficult on paper, given the ongoing repercussions of the US writers’ and actors’ strikes on ITV Studios. This is built into forecasts, though, and the outlook for the full year from ITV Studios is unchanged, with revenues weighted to the second half,” said Fiona Orford-Williams, director, TMT at investment research and consultancy Edison Group, commenting on the results.

“More positively, there is good progress at ITVX, with a strong uplift of 16% in total streaming hours and it is progress here that will underscore the proposition for advertisers. Digital advertising revenue is building well, up 14%, with Total Advertising Revenue up 3% in Q1, in line with expectations. Q2 ad revenues should see a boost from the Euros and the guidance is for TAR to be up 12% in the quarter.”