British broadcaster ITV reported a steep drop earnings today as it grapples with the downturn in the advertising market.
The streaming giant said their group adjusted EBITA plummeted to 52 per cent to £152m in the six months ending June 30, down from £318m in the first half of 2022.
ITV said this reflected “the challenging advertising market and the planned investment in ITVX”, their video on-demand service.
Total external revenues reached £1.64bn, a 2 per cent dip compared to the same period in 2022, while ITV’s Media & Entertainment segment revenues declined by 9 per cent to £964m.
Overall advertising revenue dropped 11 per cent, as expected, but within this, digital advertising revenue rose 24 per cent to £179m.
Shares poked up almost two per cent on market open as ITV Studios revenue grew 8 per cent to hit £1bn in this half of the year for the first time due to “strong and growing global demand for ITV’s content”, according to ITV boss, Carolyn McCall.
She said: “The continued momentum behind ITV’s strategic transformation delivered strong growth in Studios and Digital revenues in the first half of the year, largely offsetting the expected weakness in the UK advertising market.”
ITV said they remain confident they can deliver at least £750m in digital revenue by 2026.
Earlier in July, ITV U-turned out of a potential acquisition of All3Media, amid concerns any deal would not represent fair value for money.
“With economic uncertainty mounting and marketers clutching purses tightly to their chest, this was always going to be a difficult time,” said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.
She added: “Away from the short-term bumps, there’s a structural decline happening in the TV space – broadcast ads simply don’t pack the same punch they used to, thanks to the rise of streaming and the fact many of us spend our evenings glued to our phones too.
“To that end, it’s encouraging to see the Studios business picking up the pace – making content for the new binge-watching culture is a good place to be. ITV are up against stiff competition here too though and we’re still some way off from ITV being solely reliant on this more lucrative revenue stream,” Lund-Yates said.