ITV rolls out new streaming service despite ad spend hit
ITV has warned of a hit to advertising sales from the war in Ukraine and the cost-of-living crisis as it forges ahead with the rollout of its streaming service ITVX.
The broadcaster behind shows such as Love Island and Trigger Point warned that ad revenues are likely to go into reverse in the coming months following a 9pc rise in April.
Performance is being measured against strong numbers last year, when the Euro 2020 football championship pushed ad revenues up by 89pc.
ITV is also hampered by wider uncertainty amid the cost-of-living crisis and the Ukraine war.
Dame Carolyn Mccall, chief executive, said the company is on track to launch its new on-demand platform in the final three months of the year. It hopes that this will generate at least £750m in digital revenues by 2026.
The group unveiled ITVX with its annual results in March, alongside plans to spend more on digital content.
ITVX is expected to cost £160m next year, while the company’s total spend on programmes is estimated to reach £1.2bn this year.
The company’s total external revenue grew in the first three months of the year by 18 per cent to £834m. Advertising
sales rose 16pc. Shares in the FTSE 100 company lost 14pc after the announcement, as investors were concerned about a drop in viewers and a cut to profit forecasts.
The stock rose nearly 2pc yesterday, but it is still 40pc below January levels.
The new ITVX platform will replace the ITV Hub brand and will give subscribers the choice of watching adfunded content free of charge, or to trade up and buy ad-free content, such as Britbox.
Dame Carolyn said: “We are making good progress in our goal to supercharge streaming by increasing our hours of content by 50pc in the quarter to 6,000 hours and making available the majority of scripted programmes in full for streaming at the same time as the initial broadcast.”
ITV is seen as a likely suitor for Channel 4, the state-owned broadcaster that the Government is planning to privatise.