ITV Studios revenues down by 25% as COVID impact revealed, but BritBox subs grow

Carolyn McCall

ITV Studios (ITVS)’s revenues have taken a 25% hit over the past year after COVID impacted operations at the UK broadcaster’s global production and distribution outfit, but subscribers to its joint venture streamer BritBox are ahead of projections.

The UK commercial broadcaster’s global SVOD activities now have over 2.6 million subscribers, with BritBox UK surpassing its target of hitting half a million subs by January, according to ITV CEO Carolyn McCall as she announced the company’s end-of-year results.

BritBox UK is run as a joint venture with the BBC – with ITV holding a 90% stake – but McCall also pointed to growth for the international versions of BritBox, which are operated as 50/50 JV’s with BBC Studios. The streamer is now available in Australia while BritBox US passed 1.5 million subs in October.

Speaking to analysts this morning, McCall said that BritBox subscriptions were “fluid” and that the company would announce retrospective numbers on a regular basis.

The streamer has become an increasingly important focus for the commercial broadcaster after suffering ad declines in its home market. BritBox revealed it would be launching in South Africa later this year as part of a plan to expand into up to 25 new countries over the next few years, while Reemah Sakaan was appointed international CEO to drive growth.

Originals & VOD

McCall said that the windowing strategy for BritBox was “critical” with an emphasis on ‘event TV’ like Dr Who specials and added that “being distinctive” with originals was important, highlighting Spitting Image.

Four new originals will be launched this year via BritBox, including The Beast Must Die and The Secrets Of The Krays in the first half, with the second season of Spitting Image and Irvine Welsh adaptation Crime coming up in the second half, she added.

McCall said that ITV was “very happy” with the half million subscriber milestone, given that it was a national, niche SVOD offering.

ITV’s CFO Chris Kennedy said that BritBox UK had made a £59m (€68.7m) venture loss last year after payments to ITV for advertising and content had been taken into account, adding that the SVOD was still “a very young venture”.

McCall also highlighted progress made with the company’s Planet V addressable advertising platform and the transformation of its UK on-demand service ITV Hub.

She said that advertisers were now thinking “very specifically” about what they could do on VOD and some big advertisers were running VOD-only campaigns, thanks to the capabilities of Planet V.

ITV & ITV Studios revenues hit

There was less positive news for the broadcaster and its global production-distribution division, ITV Studios, which were badly hit by the COVID-19 pandemic.

ITV saw its revenues for the year drop by 16% to £2.7bn, with ITVS down 25% and broadcast revenues down 8% due to an advertising slide of 11%. On the upside, VOD advertising revenues were up 17%.

Adjusted group EBITA was down 21% at £573m, which the group said was better than external expectations. ITV pointed to an upturn in Q4 and its success in keeping costs down, with £116m of overhead savings delivered over the year.

However, the broadcaster expects advertising revenues for Q1 this year to be down 6% year-on-year, despite growth in VOD advertising. The company pointed to an upturn this month and an expected growth of between 60%-75% in April as the lockdown winds down.

More cost-cutting

McCall said the company was “encouraged by the roadmap out of lockdown” and said it could see “more positive trends” in the advertising market in March and April.

She added that the majority of ITV’s programmes are now back in production but added that there would be further cost-cutting, although not offering details of where this could fall.

“There remains uncertainty in all markets around the world with the potential risk of lockdowns, which if they materialise will affect revenues,” she said.

“We are committed to taking further cost out of the business while further investing to accelerate the delivery of our strategy and digital transformation. We have restructured theBroadcast business to create the Media and Entertainment Division to better respond to changing viewing habits. ITV Studios is well positioned to take advantage of the continued strong growth in the demand for quality content internationally.”