ITV has reported that Q1 revenue to March 31st was down 7 per cent YoY at £887 million, with growth in total advertising revenue (TAR) offset by the decline in ITV Studios revenue.Streaming platform ITVX continued to perform well with 16% growth in streaming hours and 14% growth in digital advertising revenues in the quarter, but revenue at ITV Studios was down 16%.Carolyn McCall, ITV CEO, commented: “ITV continues to execute its strategy successfully. Over the full year we expect ITV Studios revenues to be broadly flat. We have a strong pipeline of programmes, good demand for our quality content as we increasingly diversify our customer base towards streamers and the phasing of deliveries is heavily weighted to the second half of the year, including Hells Kitchen US, The Better Sister, A.C.A.B, Showtrial and Ludwig”.“ITVX continued to build on its strong first year and delivered double-digit growth in both digital viewing and digital advertising revenues in Q1 and we expect continued strong growth in both throughout the year. Total advertising revenue grew 3 per cent in Q1, in line with guidance, with good momentum continuing into Q2 benefitting from the Euros in June. H1 TAR is expected to be up around 8%. Our group cost savings programmes are on course to deliver £40 million of savings this year as previously guided. Overall we expect to continue to make good strategic progress and we remain on track to achieve our KPI targets for 2026,” McCall added.Financial and operating performance Q1 highlights.ITV Studios:
- Total ITV Studios revenue was down 16% at £382 million YoY due to the phasing of deliveries which are heavily weighted to H2 and the expected impact from both the 2023 Hollywood strikes and the weaker demand from free-to-air broadcasters in Europe who have been holding back spend until they see more certainty in the advertising market.
- ITV Studios delivered a wide range of new and returning programmes and formats in the UK and internationally during the quarter, including: The Reluctant Traveller for Apple TV+, The Red King for Alibi, The Gathering for Channel 4 and I’m A Celebrity…Get Me Out Of Here! in Germany for RTL.
Media & Entertainment (M&E):
- M&E revenue was up 2% at £505 million, with total advertising revenue (TAR) up 3% as previously guided.
Within this digital advertising revenue (a component of digital revenue) was up 14%.Total M&E non-advertising revenue was down 5% driven by the expected decline in partnership revenue as we improve the viewer proposition and our monetisation of ITVX.
- ITVX’s strong performance has continued in Q1 with total streaming hours up an aforementioned 16% and monthly active users continue to grow in line with expectations.
- Digital revenues grew 11% with strong growth in digital advertising revenues partly offset by the short term impact of the actions taken to simplify its paid streaming proposition.
- ITV said it maintained strength in delivering mass reach for advertisers, with 91% of the top 1,000 commercially broadcast TV programmes and 33.7% share of commercial viewing on ITV linear television channels.
Outlook:With the continued strong strategic progress we are making, ITV says it remains on track to deliver its 2026 KPI targets.As previously guided, ITV expecst to deliver a total of £40 million of cost savings in 2024 – made up of £10 million from its 2019 to 2025 cost savings programme and £30 million of additional in-year savings as part of its strategic restructuring and efficiency programme which were announced as part of the 2023 full-year results and are already being executed upon.ITV Studios:
- ITV expects ITV Studios total revenues to be broadly flat over the full year 2024 with good underlying growth offsetting the impact of the US writers and actors strikes which, as previously guided, will delay around £80 million of revenue from 2024 to 2025. Q2 will also see revenue decline year on year but ITV stresses it has a strong pipeline of programmes with deliveries heavily weighted to H2.
- ITV Studios remains on track to deliver total organic revenue growth of 5 per cent on average per annum from 2021 to 2026 – ahead of the market, and at a margin of 13 to 15 per cent.
- ITV says it is confident that it will continue to grow market share to 2026 driven by its scale; diversification by customer, geography and genre; a strong track record of high-quality content; a strong slate for 2024 and beyond; and its leading creative talent.
Media & Entertainment:
- ITV remains on track to deliver at least £750 million of digital revenues by 2026.
- ITVX has started the year strongly and will continue to build on its content, product, distribution and marketing.
- Compared to the same period in 2023, TAR is expected to be up around 12 per cent in Q2 and up around 8 per cent in H1 2024 benefitting from the Euros in June, with continued strong growth in digital advertising revenues.
Commenting on the results, Fiona Orford-Williams, Director at TMT at Edison Group, said: “Q1 for ITV was always going to look a bit difficult on paper, given the ongoing repercussions of the US writers’ and actors’ strikes on ITV Studios. This is built into forecasts, though, and the outlook for the full year from ITV Studios is unchanged, with revenues weighted to the second half”.More positively, there is good progress at ITVX, with a strong uplift of 16% in total streaming hours and it is progress here that will underscore the proposition for advertisers. Digital advertising revenue is building well, up 14%, with Total Advertising Revenue up 3% in Q1, in line with expectations. Q2 ad revenues should see a boost from the Euros and the guidance is for TAR to be up 12% in the quarter,” she added.
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