ITV revenue up but ITVX sees shares fall
March 3, 2022
By Colin Mann
UK commercial broadcaster ITV has reported a strong 2021 with record revenues and revealed an acceleration of its digital strategy which will see the launch in Q4 of ITVX, which it says is the first integrated AVoD/SVoD platform in the UK.
But despite the revenue record, softer forecasts and the looming costs of the streaming service saw the City take against the stock which fell by as much as 18 per cent.
“ITV delivered an outstanding financial performance in 2021 with total external revenue growth of 24 per cent and adjusted EPS growth of 40 per cent, fuelled by strong performance in both our Divisions,” reported Carolyn McCall, ITV Chief Executive. “ITV Studios has enjoyed both ratings and critical success and currently has around 500 programmes in production in the UK and internationally. Media and Entertainment kept viewers and advertisers alike happy with a compelling slate of entertainment shows and dramas and must watch sport across ITV’s channels and streaming. Total advertising revenue saw a record year and within this video on demand advertising was up 41 per cent.”
“The successful execution of the first phase of our More Than TV strategy puts us in a strong financial and creative position, from which to launch the next phase – ITV’s Digital Acceleration, to supercharge our streaming business.
“With the success of ITV Hub, ITV Hub+, Planet V and BritBox we see an exciting opportunity to at least double our digital revenues to £750 million by 2026. At its heart will be ITVX – the first integrated AVoD/SVoD streaming platform in the UK. It will be a seamless viewer experience with a digital first content and windowing strategy and significant content investment providing weekly premieres and over 15,000 hours of content at launch. This will enable ITV to double streaming viewing, double monthly active users, double subscribers and deliver valuable addressable advertising inventory at scale.”
“Last year’s financial performance together with the successful completion of the first phase of our More Than TV strategy sets ITV up for Digital Acceleration. We look forward with confidence to the launch of ITVX in Q4 and with the above market revenue growth of ITV Studios, we are confident that we will become a leader in UK streaming and an expanding global force in content.”
“Our strong balance sheet and cash flows enable us to invest behind our strategy to build a more valuable digital media and entertainment company, and deliver returns to shareholders,” she concluded.
Total external revenue was up 24 per cent at £3.453 billion [€4.17bn] (December 31st 2020: £2.781 billion)
ITV Family Share of viewing (SOV) was up from 22.2 per cent to 22.3 per cent in 2021 with a strong programming slate including the Euros, Love Island, The Masked Singer, Pembrokeshire Murders and Grace delivering strong ratings as ITV continues to provide both mass audiences and key demographics. Streaming viewing hours were up 22 per cent, with monthly active users (MAUs) up 19 per cent to 9.6 million.
BritBox UK continues to grow well, with around 733,000 subscriptions, up over 45 per cent year on year and an exciting pipeline of eight scripted titles in the first half of 2022 including Why Didn’t They Ask Evans?.
BritBox International is now in four countries and delivered strong growth with over 2.4 million subscriptions, up over 50 per cent. It will launch in the Nordics in the first half of 2022, with further roll out planned. By 2030, ITV aims to have 10 million to 12 million international subscribers
AVoD service Hub+ has around 513,000 subscribers, up 19 per cent.
With the success of ITV Hub, ITV Hub+, Planet V and BritBox, ITV sees a clear opportunity to “supercharge” its streaming business and at least double its M&E digital revenues to £750 million by 2026.
Key to this is the launch ITVX in Q4 2022, an integrated AVoD/SVoD platform in the UK with a digital first content strategy. ITVX will be an AVoD-led platform, with a compelling SVoD offering; provide a simplified and seamless consumer experience; have an impressive content line up including weekly exclusive series, FAST channels, content partnerships and 15,000 hours of content at launch; include a powerful upsell into SVoD, which will be ad-free and include BritBox’s 6,000 hours of British content and future premium content partnerships; deliver valuable addressable audiences for advertisers at scale and ITV’s established data and analytics capabilities will drive higher-value data driven pricing models. “We will continue to optimise our USP as the largest commercial PSB in the UK and grow linear addressable advertising,” it says
In terms of outlook, ITV has a clear ambition and strategy to be a leading streamer in the UK and an expanding global force in content. “The success of ITVX will be key to delivering our target of at least doubling digital revenues to £750 million and enabling us to double streaming viewing, double MAUs and double subscribers by 2026,” it states.