ITV reported a 6 per cent year-on-year fall in TV ad revenues in the third quarter of 2012 as advertisers held back spend while the BBC covered the London Olympics. Meanwhile ITV Studios is forecast to make profits of more than £100 million (€125m) this year.
TV ad revenues fell 10 per cent year-on-year in July and 9 per cent in August – but said a 1 per cent fall in September means across the first nine months the broadcaster remains in “positive territory”. With the crucial, and tough, negotiating season for 2013 TV advertising deals set to start chief executive Adam Crozier was keen to point out that ITV’s decline has been due to one-off TV events this year.
“This has been an extraordinary year for UK television with many unique events including the Queen’s Jubilee, the London Olympics and the Paralympics,” he said.
“In fact nine out of the top 10 programmes aired will not return next year and as we expected this has affected our viewing performance. However, we do not expect our viewing performance in 2012 to impact our advertising share in 2013 and we are focussed on growing our share of viewing next year.”
ITV said it expects TV ad revenue to be down 2 per cent year-on-year across the fourth quarter – a fall of 2 per cent in October and November and “broadly flat” in December. Overall ITV reported total revenues up 4 per cent in the first nine months of the year to £1.57 billion.
The real success story remains the rejuvenation of ITV Studios which grew revenues by 20 per cent in the first nine months to £498 million.
“ITV Studios has performed strongly as our strategy of investing in the creative pipeline and talent again shows through in our results,” said Crozier. “We expect ITV Studios to report over £100 million of profit in 2012, and the number of new commissions and recommissions already secured for 2013 gives us confidence that there will continue to be good underlying growth in the studios business.”
About 46 per cent of ITV’s total revenues now come from sources other than TV advertising, diversification of revenue is a key goal for Crozier. Revenue from online pay and interactive services also grew about 20 per cent in the first nine months. In the full year of 2011 the broadcaster made £81 million, with ITV recently launching a micro-payment services for its online TV service ITV Player.
ITV also said cost savings in 2012 will be £30 million, £10 million ahead of target, and that its net debt has been wiped out with the balance sheet at a £90 million cash position.