ITV says that demand from advertisers for slots during this summer’s Euro 2024 football championships has helped offset a revenue slump at its production arm.
Chief executive Dame Carolyn McCall said that for the first three months the year, ITV’s total external revenues dropped six percent to £727million, driven by income at its studios business falling 16 percent to £382million.
She said that ITV Studios’ revenues fell as last year’s Hollywood writers and actors strike has delayed deal income, in addition to weak demand for new programming from free-to-air broadcasters in Europe. McCall said that clients in Europe were being cautious due to the uncertain advertising market there.
However, she said that ITV is on track to meet its full year targets and noted that during the first quarter, its advertising revenues rose three percent to £432million. Given the “good momentum” building up ahead of Euro 2024’s kick off in June, it expects its advertising income to grow 12 percent in the second quarter.
At the same time, she said its revamped ITVX streaming service had a strong start to the year, and that its cost-cutting efforts are on schedule, with savings of £40million expected this year.
McCall added that ITV Studios’ second half will be a lot stronger, when it delivers new episodes of Hell’s Kitchen USA for Fox, Italian crime drama ACAB for Netflix, The better Sister and Lazarus for Amazon Prime Video, Showtrial for the BBC, The Voice in Germany and Love Island in the UK, US and Australia.
“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,” she said. ”Overall, we expect to continue to make good strategic progress and we remain on track to achieve our targets.”
Adam Vettese, analyst at investment platform eToro, said that after posting revenue declines for 2023 in March and now the first quarter, McCall will start coming under pressure from markets to start delivering improved performances. “The question is at what point does it (ITV) need to actually deliver in order for investors to keep the faith?,” he said.
