ITV offsets ad revenue declines with strong studios and digital performance

ITV has released a trading update for the first nine months of 2022 in which it says total external revenue was up 6% at £2.5bn. Of this total, non-advertising revenue was up 13%, with ITV Studios primarily responsible for this growth (up 16%). These figures offset an overall decline in ad revenue, down 2% year on year.

Carolyn McCall

The company claimed a robust performance in digital, with “total digital revenues up 15% and total streaming hours broadly flat as we prioritise content on our own platforms to drive effective monetisation. Monetisable streaming hours on ITV Hub, ITV Hub+ and BritBox UK were up 10% in the nine months to 30 September 2022.”

Carolyn McCall, ITV chief executive, said: “ITV has performed strongly, driven by double digit growth in both digital revenue and revenue from ITV Studios. ITV Studios continues to outperform the growing content market and will exceed 2019 revenues in 2022. We are making good progress on our new, free, ad-funded streaming service ITVX, which will be rolled out across devices and platforms in the coming weeks.”

McCall said ITVX “will supercharge our streaming business providing viewers with a content-rich destination rather than a catch up service and advertisers with valuable addressable audiences at scale. This will drive significant digital viewing and revenue growth, enabling ITV to deliver at least £750 million digital revenues by 2026.”

Numerous companies have warned about the potential impact of the global economy on their future performance, especially with regard to advertising. But McCall struck a bullish note: “While we remain mindful of the macroeconomic and geopolitical uncertainty there’s strong operational momentum across both our Studios and Media & Entertainment divisions, as we continue to build a resilient, diversified business that can take advantage of the global growth in the demand for quality content and the desire of advertisers for both mass reach and data-led addressable advertising.”

On the short-term outlook for advertising, ITV said total ad revenue for the full year 2022 “is expected to be down between 1% and 1.5%. In Q4, ITV will broadcast the FIFA World Cup, which will benefit TAR in November and December.” The market’s initial reaction was to send ITV’s share price down 5% because of ad revenue decline.