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ITV’s D2C revenues exceed $100m

UK commercial broadcaster ITV’s direct-to-consumer (D2C) revenues grew by 25% to tip over the US$100m mark in 2018, according to its full-year financial results.

Carolyn McCall

Figures out today show ITV’s D2C revenues have risen by £16m since 2017 to £81m (US$108m), with the company on course to reach its £100m target by 2021. Additionally, VoD revenues were up by over a third (36%).

Growth in D2C revenues was fuelled by the firm’s VoD service ITV Hub, with online viewing up 32%, driven by viewing on mobile devices, connected TV and streaming media players. Ad-free SVoD service ITV Hub+, although still small compared with other services, has tripled its subscribers to 265,000.

The figures come as the company continues to invest in the OTT space under new CEO Carolyn McCall and follow the announcement that it is linking up with pubcaster the BBC to launch SVoD service BritBox this year.

ITV said it planned to spend £25m on the project this year and £40m in 2020, in addition to a previously announced £40m essential investment this year to improve the company’s technology, data capability and user experience.

Overall, total broadcast and online revenues grew fractionally from £2.08m to £2.1bn, despite a 7% fall when adjusted for earnings before interest, taxes, and amortisation.

The company’s production arm ITV Studios (ITVS) grew its total revenues by 6% to £1.7bn, driven by international production output and programme sales through its distributor ITV Studios Global Entertainment.

However, revenues from ITVS’s US arm ITV America declined by a fifth (21%) from £310m to £245m. This was caused by key series Duck Dynasty and American Grit not returning, a fall in the number of Pawn Stars episodes and the loss of Hell’s Kitchen following the delivery of two seasons in 2017. ITV America is due to produce the US version of hit format Love Island for broadcast network CBS.

ITV said the overall growth in ITVS “more than offset the decline in ITV America” and new series such as The Four and Knife or Death, and Netflix hit Queer Eye would also help. Fox also confirmed it has now commissioned seasons 19 and 20 of Hell’s Kitchen which will go into production this year.

“ITV is making good progress as we invest in our More Than TV strategy – repositioning the ITV brand, developing our data and digital capabilities, increasing our ability to offer addressable advertising and expanding our DTC activities. Cost savings, which will partly offset this essential investment, are on track,” said McCall.

“We have started 2019 with strong onscreen and online viewing. However, the economic and political headwinds for the UK will have an effect on the advertising market and while ITV is increasingly diversified, we remain sensitive to this. We continue to be very focused on delivering in the areas we can control and actively mitigating the factors outside the company’s control.”

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