Soccer and sex boost British broadcaster ITV
London — The World Cup and reality show Love Island boosted on-air and online performance at British broadcaster ITV as it reported an 8% rise in first-half revenue.
CEO Carolyn McCall, who joined in January, said the commercially run ITV’s share of viewing rose 9% to a 10-year high and its studios production arm increased revenue and profits.
Under the leadership of her predecessor, ITV reduced its reliance on advertising by buying production companies.
Revenue from its studios, which make The Voice, rose 16% to £803m, about half of its total, it said on Wednesday. Overall revenue rose to £1.59bn.
McCall said ITV had been right to shift focus and its next step would be in the subscription video-on-demand territory staked out by Netflix.
She said ITV had seen a jump in demand for its ad-free ITV Hub+, driven by holiday makers in Europe who wanted to see World Cup games or Love Island, but it could go further.
"We see an opportunity to create a subscriber video-on-demand service on the back of our brand, our content and significant cross-promotional activity," she said.
"We are actively reviewing what our video-on-demand service proposition will be and we are talking to potential partners." She said there was "real demand for British distinctive content", adding that Britain’s regulator had said it would support more collaboration between public service broadcasters. An earlier attempt to create a combined video-on-demand platform was blocked in 2009.
"Online VOD growth represents a massive opportunity for ITV, especially as it is high margin and ITV’s share of VOD is only circa 6% versus circa 45% in linear TV," Liberum analysts said in a research note.
ITV shares were up 0.6% before midday, outperforming a broadly weak UK equities market.
ITV said economic uncertainty would result in flat ad revenue in the third quarter, despite the period including England’s World Cup semi-final against Croatia, watched by 26.6-million viewers.
ITV’s total advertising revenue rose 2% in its first half, with 48% growth from online.
Its online platform is attracting the 16 to 24-year olds highly prized by advertisers, with about 75% registered.
Love Island achieved an average online audience of 300,000, in addition to more than 3-million broadcast viewers.
ITV is producing the show for seven markets, McCall said, and it would take it into another as-yet-unannounced market.
ITV reported adjusted earnings before interest tax and amortisation (ebita) of £375m for the six months to end-June, down 7% but ahead of analyst forecasts of £361m.