Broadcaster in drive to save £40m
ITV has launched a fresh costcutting drive that will see it save up to £40 million by 2021 as the broadcaster continues to battle weak ad revenue growth.
Recently hired chief executive Carolyn McCall unveiled a strategy “refresh” which will address sector competition and ensure that ITV remains “a structurally sound business”.
It will involve a £60 million investment in the business over the next three years in part to ramp up its UK and global production, and create a “direct to consumer business”.
The broadcaster, which has studios at MediaCityUK, also outlined a raft of cost cuts, with plans to target £35 million to £40 million in savings between 2019 and 2021.
Ms McCall told journalists it was “too early” to say whether job losses would be necessary as part of the cost-cutting programme.
“We need to bring in more capabilities and therefore the net impact over three years is positive in terms of people, rather than negative, but it is a realignment around things we absolutely have to deliver to be a structurally sound and successful business in the next three to five years.”
Ms McCall, who took on the top job in January after seven years as chief executive of easyJet, said the broadcaster was well placed to take advantage of growing appetite for quality content through its new strategic plan.
“ITV will be more than TV it will be a structurally sound, integrated producer-broadcaster where we aim to maintain total viewing and increase total advertising revenue.
“We will deliver this strategy by building greater capability in data, analytics and technology as well as developing the great creative and commercial talent ITV already has.
Russ Mould, investment director at Salford-based AJ Bell said: “ITV’s new strategy to go beyond TV including data analysis capabilities and building a direct-to-consumer proposition effectively gives the business two choices.
“It can spend lots of money expanding its content business and go head-to-head with Amazon and Netflix in the world of streaming.
“Or it can admit defeat and accept that it is better placed as part of a larger company. Given that chief executive Carolyn McCall is still relatively new to the job, it is hard to see her going to down the second route. She will want to fight hard to adapt the group to fit in the modern media world.”
The news comes as the broadcaster reported an 8% rise in total revenue for the six months to June 30 to £1.8 billion.