ITV’s profitsfell sharply last year as the Broadchurch to Love Island broadcaster reported the steepest fall in TV advertising in almost a decade.
ITV’s pre-tax profits fell more than 10% to £500m last year as TV advertising revenue, which accounts for about half of its revenues, fell 5% to £1.6bn. In 2009, ITV’s TV ad revenues fall 9.4% amid the advertising recession. Its shares fell nearly 5% on the news.
The new ITV chief executive, Carolyn McCall, who joined from easyJet in the new year, blamed “ongoing economic and political uncertainty” for making brands wary about committing to advertising spending.
McCall said that overall the broadcaster performed well as ITV Studios, which makes shows such as Hell’s Kitchen, Victoria and The Voice, and growth in online TV helped push total revenues up 2% to £3.1bn.
Commenting on the bid for Sky by Comcast, which has in the past looked at ITV, McCall said it proved the value of strong producer broadcasters.
“[The bid] shows how much money there is around and how valuable content businesses and broadcast businesses are,” she said. McCall is in the process of a “rigorous and thorough refresh” of the strategy put in place by predecessor Adam Crozier seven years ago.
“The world has changed since the last strategy was set out. Traditional broadcasters are no longer our only competitors for viewers and advertising,” she said.
The profit and revenue fall took the gloss off a strong on-screen performance last year as shows including Broadchurch, ITV’s biggest drama, Victoria, I’m a Celebrity … Get Me Out of Here and breakout hit Love Island performed well.
ITV’s £1.1bn programming budget is dwarfed by deep-pocketed rivals such as Netflix ($8bn), but McCall said it could remain competitive in the face of spiralling content costs.
“It is a fact, you have to just deal with it,” she said. “ITV is formidable at commissioning and doing it at a cost level not as eye-watering as some of the others. We are having to be much more nimble and agile in that world. On the other hand, a lot of the people spending [big money] commissioning shows are our customers [for ITV Studios].”