ITV Studios revenues offset parent company’s advertising declines
Revenue at UK commercial broadcaster ITV rose slightly in the first nine months of 2023, compared to the same period in 2022, as growth at ITV Studios offset a decline at the media and entertainment (M&E) business.
Carolyn McCall
In its third-quarter trading update today, ITV reported a 1% rise in revenue in the nine months, to £2.98bn from £2.95bn the prior year. ITV Studios revenue increased by 9% to £1.52bn from £1.39bn, while M&E revenue declined by 7% to £1.46bn from £1.56bn.
ITV said the decline in M&E revenue was expected and caused by a 7% fall in total advertising revenue. Digital advertising revenue grew by 25% in the nine months but wasn’t enough to offset a decrease in linear advertising revenue.
Total digital revenue at streamer ITVX grew by 23% in the period, while total streaming hours were up 27% to the end of September. ITV said monthly active users continued to grow in line with its expectations.
Looking ahead to the full year, the broadcaster expects ITV Studios to deliver around 3% revenue growth in 2023, following 19% growth in 2022. On an organic basis, it expects average growth over 2022 and 2023 to be “well ahead” of its medium-term target and the wider market.
Beyond 2023, ITV said it expects ITV Studios to deliver total organic revenue growth of at least 5% per annum on average to 2026 and to grow ahead of the market. It did warn, however, that the US writers’ and actors’ strikes will defer revenue from 2024 into 2025.
“We continue to expect good global demand for ITV’s high-quality content over the medium term. In the shorter term, the global content market has been impacted by lower demand from free-to-air broadcasters, reflecting the challenging advertising environment, as well as the US writers’ and actors’ strike,” ITV said in a statement.
At the M&E business, ITV said it remains confident in delivering at least £750m of digital revenue by 2026, thanks to a “successful performance” at ITVX.
Despite this, the advertising market remains challenging, ITV added, leading it to predict an 8% year-on-year decline in total advertising revenue in 2023. The broadcaster did point out, however, that 2022’s figure was the second highest in its history thanks to the FIFA World Cup.
In light of this, total content spend for the full year will be £10m lower than previously guided as ITV “rephases content into 2024.”
ITV’s CEO Carolyn McCall added: “ITV continues to make good strategic progress despite the challenging macro environment which is impacting the advertising market and also the demand for content from free-to-air broadcasters in the UK and internationally.
“It is evident that our strategy of growing the Studios and M&E digital business is helping ITV to offset the current headwinds and we remain confident in delivering our 2026 targets, when we expect two-thirds of revenue to come from these growth drivers.”
