ITV H1: Digital revenue up 24%
July 27, 2023
By Colin Mann
UK commercial broadcaster ITV has released half-year results that show ITV Studios revenues up 8 per cent and digital revenue up 24 per cent, offsetting a decline in linear advertising revenues.
“The continued momentum behind ITV’s strategic transformation delivered strong growth in Studios and Digital revenues in the first half of the year, largely offsetting the expected weakness in the UK advertising market – with total revenue declining just 1 per cent in H1, even in a very tough advertising market,” reported Carolyn McCall, ITV Chief Executive. “ITV Studios increased revenue by 8 per cent, reaching £1 billion (€1.106 bn) in H1 for the first time with strong and growing global demand for ITV’s content.”
“[AVoD service] ITVX drove an increase in digital revenue of 24 per cent, ahead of plan, supported by a step change in our viewer metrics – with more viewers watching more content and staying longer.”
“ITV maintained its strength in linear in a challenging advertising market. Looking forward we see a more encouraging outlook as advertisers build their campaigns around the large streaming and linear audiences expected to be drawn to the Women’s World Cup, the Rugby World Cup and the eagerly anticipated return of Big Brother.
“We remain on track to achieve all our KPI targets which gives us confidence we will deliver at least £750 million of digital revenue by 2026. As we said at the full year results in March, 2023 is the year of peak net investment in our streaming business and we expect profit to grow from here,” she added.
- Total external revenue was down 2 per cent at £1.639 billion, with growth in ITV Studios and digital revenues largely offsetting the decline in linear advertising revenues
- Total ITV Studios revenue up 8 per cent to £1,000 million, driven by the UK
- Media & Entertainment (M&E) revenue down 9 per cent at £964 million, with total advertising revenue (TAR) down 11 per cent as guided. Within this, digital advertising revenue was up 24 per cent to £179 million
- Group adjusted EBITA was down 52 per cent at £152 million, as expected. This reflects the challenging advertising market and the planned investment in ITVX. Adjusted EPS was down 62 per cent at 2.3p
- EBITA was £133 million (June 2022: £295 million). Statutory profit before tax was £45 million (June 2022: £219 million) and statutory EPS was 1.0p (June 2022: 4.8p)
- The Board has declared an interim dividend of 1.7p (30 June 2022: 1.7p) and remains committed to paying a total dividend of at least 5p for the full year, which is expected to grow over time
ITV Studios reported “good performance” as the broadcaster continues to see strong global demand for its content. Nine formats were sold in three or more countries, as its programmes continue to travel, including The Voice; Love Island; My Mum, Your Dad; and Come Dine With Me.
ITVX’s strong performance has continued. The planned investment in content is attracting increased users, who are watching more and staying for longer compared to ITV Hub in 2022. Monthly active users were up 29 per cent to 12.5 million and total streaming hours increased 33 per cent to 737 million hours driving strong growth in digital revenues up 24 per cent to £218 million.
Addressable advertising platform Planet V continues to see strong demand for data-driven, targeted advertising benefitting from the increased scale of online inventory on ITVX driving digital advertising revenue up 24 per cent in H1 to £179 million.
“We are looking forward to the second half of 2023 with the Women’s Football World Cup, the Rugby World Cup and Big Brother, all set to draw large broadcast and streaming audiences,” says ITV.
While linear will continue to have an important role in the advertising mix, by 2026, ITV expects around two-thirds of ITV’s total revenues to come from its growth drivers – ITV Studios and M&E digital revenues. This is expected to drive increased profits from 2023, which is the year of peak net investment in its streaming business.
“Our balance sheet is robust which enables ITV to invest behind our strategic priorities and deliver returns to shareholders in line with our capital allocation policy,” it concludes.