ITV warns on falling television advertising revenues

ITV has warned that advertising revenue will fall 11 per cent in the first quarter as the UK’s largest commercial broadcaster unveiled flat operating profits following investment in its ITVX streaming service.

“The outlook for total advertising revenue is challenging given the current macroeconomic environment,” said ITV chief executive Carolyn McCall, although she said the group was becoming less dependent on scheduled television ads in favour of digital advertising.

While advertising revenue as a whole fell by 1 per cent to £1.9bn, digital revenue rose 17 per cent year on year to £343mn. McCall expects it will rise 25 per cent in the first quarter, a bright spot in the overall trend down.

Overall, the Love Island broadcaster reported annual revenue of £3.7bn on Thursday, up from £3.5bn in 2021. Pre-tax profit rose 4 per cent to £501mn. Operating profit remained the same as a year earlier at £519mn.

Shares in ITV fell 3.5 per cent in early London trading to 85p. They have dropped more than 22 per cent over the past year, with investors concerned about its ability to compete with deep-pocketed US streaming rivals such as Disney and Netflix.

ITV launched its free, ad-funded ITVX streaming platform, a successor to the ITV Hub, in December as consumers move away from watching timetabled programmes.

The company said there were 1.5mn user registrations for the platform in its first two months, with streaming hours growing 69 per cent on the year before. Subscribers to the broadcaster’s BritBox platform increased by a quarter to 3mn.

The ITV studios business, which produces popular content such as Coronation Street and Jeremy Kyle, recorded 26 per cent growth in the US, which the company attributed partly to the success of Love Island as well as comedy show Physical on Apple TV+.

ITV is also facing reputational challenges. Who Wants To Be A Millionaire game show host Jeremy Clarkson was widely condemned for a column he wrote in The Sun newspaper earlier this year in which said he dreamt of the Duchess of Sussex Meghan Markle being “paraded naked through the streets” while people threw “lumps of excrement” at her. He has since apologised.

McCall said the broadcaster was “contractually committed” to recording a further season of Who Wants To Be A Millionaire with Clarkson as host. “Neither Who Wants To Be A Millionaire, nor Jeremy Clarkson have been cancelled”, she said.

Meanwhile, regulator Ofcom has said it is still assessing complaints made by the family of deceased woman Nicola Bulley against ITV and Sky for allegedly invading their privacy following her death.

Kevin Lygo, ITV’s managing director of media and entertainment, said the broadcaster had a “fantastic” year coming up, with ITV claiming exclusive UK broadcast rights to the Rugby World Cup, a new season of reality television show Big Brother and I’m a Celebrity . . . Get Me Out of Here!

“If we can find another fun politician to throw in,” he added, in a reference to former UK health secretary Matt Hancock’s time on the series.