- ITV’s third quarter revenue rose 1% to £3.0bn
- Total advertising revenue fell 7% as the advertising market’s being affected by the “challenging” macro environment
- Digital advertising revenues are proving more resilient
- Difficult conditions means ITV will push £10m of content spend into next year and it continues to review the cost base
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown:
“ITV is at the mercy of creaking economic conditions. Companies are snapping marketing purses shut as they buckle down for the unknown over the coming months, and that makes moving ITV’s advertising top-line in the right direction a very difficult task. The structural decline in broadcast advertising isn’t exactly a new bulletin, but the extent of the challenges are becoming more pronounced.
ITV’s master plan to combat this includes creating a best-in-class digital offering, as well as curating a leading production business. Digital revenues are holding up much better then free-to-air channels, given the wider and more engaged viewer-base. But growth here isn’t enough to carry the weight of the traditional business as things stand, and the exponential growth needed to make that the case is currently out of reach. The Studios business has an excellent proposition and should be able to scoop up demand as streamers battle to create an increasing amount of content, but there’s still a chunk of revenue tied to less glamorous channels like terrestrial TV – which is cutting back.
ITV is a mashup of ventures, some of which have real potential, but the market needs to be convinced it has the right strategy and firepower in place to reach it. Pushing content spend out into next year won’t have been a decision taken lightly – cost cutting can only go so far, and trimming this area of the business wreaks slightly of desperation.”
