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ITV Turnover Dips 2% for 2023 While Production Arm ITV Studios Climbs With Hits Including ‘Fool Me Once’

U.K. commercial broadcaster ITV’s annual results for 2023 were revealed Thursday.

Total group revenue was down 2% and total external revenue was down 3% to £3.6 billion ($4.6 billion). Total revenues at ITV Studios, which produces shows including “Fool Me Once” and “Love Island,” grew 4%.

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The U.K. media conglomerate also revealed linear advertising had dropped by 15%. The group adjusted EBITA (Earnings Before Interest, Taxes and Amortization) was down 32% to £489 million, reflecting the decline in linear advertising revenue and investment in streamer ITVX. EBITA was £404 million, down from £668 million in 2022. Statutory profit before tax was £193 million down from £501 million in 2022.

There was positive news on the digital front, with streamer ITVX performing strongly. Monthly active users were up 19%, and total streaming hours increased by 26%, which drove 19% growth in digital revenues to £490 million. ITV said it is on track to deliver at least £750 million of digital revenues by 2026.

The company said that it expects to marginally reduce content cost in 2024 to some £1.2 billion and increase marketing spend by £15 million to drive both streaming and linear viewing.

“We are now in the early stages of a new strategic restructuring and efficiency program across the group to reshape the cost base, enhance profitability, and support the growth drivers of Studios and Streaming. By the end of 2024 we expect the program to have delivered incremental annualised gross savings of at least £50 million per year, giving a £30 million in year gross benefit in 2024. The ongoing program is designed to deliver further material incremental savings over a number of years,” said CEO Carolyn McCall.

“In 2023 we saw the benefit of the actions we have taken to reposition ITV towards higher sustainable growth. Our Studios business recorded the highest ever revenues and profits and in its first year ITVX delivered strong growth in viewing and digital revenue with investment on plan. This growth in production and streaming substantially offset the challenging linear TV advertising market conditions.”

“2023 was the year of peak investment for streaming, which together with the successful execution of our strategy and the efficiencies delivered to date have made ITV more robust. ITV has a leading, scaled, global Studios business, a high growth Streaming service and a cash generative linear advertising business. This ensures that we are well placed to grow profits from here as we continue to drive material efficiencies, invest behind our strategic priorities and deliver returns to shareholders.”

Last week ITV revealed it had sold its stake in streamer Britbox International to BBC Studios for for £255 million ($322 million).

It’s been a rocky 12 months for ITV, who have faced a downturn in advertising revenue (along with the rest of the TV industry) as well as inflation. They also faced the loss of their two longtime anchors on ITV’s flagship daytime show, “This Morning,” following the exit of Philip Schofield and later his co-host Holly Willoughby.

The media conglomerate has also continued to take big swings, from launching its proprietary streaming platform ITVX in Dec. 2022 to nabbing the Oscars telecast from Sky, who held the rights for two decades.

In a call with journalists following the results McCall declined to say whether the “restructuring and efficiency” program would include lay-offs, describing it as an “acceleration” of a long-term future-proofing plan that had long been implemented across the company. “It’s way too early I’m afraid to say specifically [if there’ll be lay-offs]…. it’s a big program internally.”

Asked about whether the commissioning downturn could impact ITV Studios, McCall indicated the market is still volatile following last year’s dual writers and actors strikes with “quite a big chunk of productions” delayed from this year to next.

She added that the strikes had also slowed down the production pipeline for ITV Studios because they put a spoke in all commissioning conversations. “Pitches, ideas, discussions, anything that would build a pipeline didn’t happen for quite some months and that has just delayed what you would expect to see,” McCall said. “It’s delayed commissioning decisions.”

That has meant they are having “lots and lots of commissioning conversations now. But it takes 18 months to make a drama.”

Kevin Lygo, ITV’s head of entertainment, also said no decisions have been made on the network’s relationship with controversial host Jeremy Clarkson, who currently hosts “Who Wants to be a Millionaire?” for ITV. He indicated that there are still a number of unaired episodes of the gameshow still to run before they make a decision about re-newing his contract but added: “We’re delighted with his performance so far.”

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