ITV has reported a 14 per cent increase in pre-tax profits to £327 million in 2011 as chief executive Adam Crozier hailed a turnaround in its TV production business.
The UK commercial broadcaster, which reported adjusted pre-tax profits up 24 per cent to £398 million said that total revenues increased 4 per cent to £2.1 billion in 2011.
ITV said that it managed to increase TV ad revenue by 1 per cent to £1.5bn while online income, from digital advertising and services provided via the ITV Player, grew 21 per cent to £34 million.
Crozier said that ITV’s strategy of moving away from its almost complete dependence on TV advertising is starting to pay dividends.
He pointed to a £93 million year-on-year increase in non-advertising revenue – an 11 per cent year-on-year boost to £922 million – which he attributed mainly to growth from its UK and international studio businesses.
“The increase in non-advertising revenues of £93 million, driven by our studios and online businesses, is clear evidence of progress in rebalancing the company and our ability to grow new revenue streams,” said Crozier.
Total revenues at ITV Studios grew 10 per cent to £612 million, fuelled by international production, which included 45 new commissions and 26 recommissions. External revenues were up 9 per cent to £320 million.
Crozier said that “in time” ITV might look to grow its studio operation by making acquisitions. However he made it clear organic growth is the focus and he scotched any suggestion of a move for Big Brother producer Endemol, or that ITV might have received any potential takeover approach.
Crozier admitted that key shows such as The X Factor and I’m a Celebrity… “did not perform as well” as they had in 2010, despite the Simon Cowell show being the biggest entertainment ratings winner of 2011.
ITV1’s share of viewing was down 2 per cent, despite benefiting from the launch of ITV1+1, with Crozier saying he was a “bit disappointed” with the fourth quarter audience performance in particular. Share of viewing across digital channels grew 10 per cent year on year.
Crozier said that ITV’s fledgling strategy to develop new digital pay revenue streams is gathering pace following content deals with Netflix, LOVEFiLM and Sky, while the “slightly delayed” launch of a micro-payment system on the ITV Player will see trials begin in June.
Video views on the ITV Player have increased 44 per cent to 376 million, thanks to rolling out the service to platforms such as Android and Apple devices. Crozier, who said that ITV intends to launch a news website in the next few weeks, said that ITV has pushed the cost per thousand rate on its digital advertising up 4 per cent in 2011 to £25.
ITV has earmarked £25 million in 2012 for furthering its strategy to diversify beyond TV advertising.
Crozier said that ITV was in the “early day of scoping some ideas for potential channels” to launch international markets. He also said that there was scope as the ITV Player develops to deliver “over the top” TV services into some international territories.
“It is early days scoping what we might do,” he said. “At its heart it is about making the best use of viewer content. We will make decisions on a territory-by-territory basis.”