Thumbs down for ITV’s big plans
ITV’s shares “crashed” 27% last week despite a rise in profits, as investors delivered a “damning verdict” on the broadcaster’s plans to invest heavily in “exclusive programming for a new streaming push”, says Ben Woods in The Daily Telegraph. ITV wants to combine its catchup player ITV Hub and subscription service BritBox into ITVX, a new streaming service that “will drive its attempts to double digital sales to £750m by 2026”.
There are several reasons why investors have been “spooked” by the plans, says Alex Ralph in The Times. They worry that the “costly” investment in streaming will lead to a “weaker short-term profit outlook”. They are extremely sceptical about whether it will pay off, especially given that ITV will be going up against “technology giants” such as Amazon and Netflix. They even fear that competition is so intense that ITV won’t be able to hold onto its existing viewers: the latest figures reveal “a decline in viewers across the broadcaster’s platforms”.
But the plans were hardly a “shocker”, says Nils Pratley in The Guardian. True, the move is “not risk-free”, especially given that ITV “will have to ramp up spending on programming”, resulting in “a couple of years of going backwards on profits”. But there “really ought to be room for a UK-focused streaming service to duck and weave between globally designed US output”. The alternative is to give up and let Amazon, Disney and Netflix “mop up every last digital pound in the UK”. In the meantime, ITV can still rely on Coronation Street and other “advertising home-bankers”.