With 30-second primetime TV ads during next month’s The X Factor final now selling for £250,000 ($400,000), no wonder ITV expects 4th quarter ad revenue to rise by 10%. ITV’s revenue over the first 9 months has risen to £1.46 billion compared with £1.31 billion last year. Ad revenue rose by 16% between July and September. Booming ratings for The X Factor and Julian Fellowes’ Downtown Abbey – hurriedly re-commissioned for a 2nd series – have been key revenue drivers. Downton Abbey’s final episode drew an audience of more than 10 million. PBS is due to start showing Downton as part of Masterpiece Theatre in January. Indeed, the figures are expected to be so good ITV is thinking about reinstating its shareholder dividend. ITV has not made a payout to shareholders for almost 2 years.
ITV Studios, the broadcaster’s in-house production arm, dragged down Q3 figures though. Its earnings fell 10% to £205 million as ITV struggles to create hit new shows in-house. Both Downton and The X Factor are made by independent companies, even if ITV does sell ad space.
Announcing this morning’s results, ITV boss Adam Crozier said: “The economic outlook for 2011 is uncertain and we continue to plan on a cautious basis.” There won’t be any football World Cup to lift next year’s 1st half, plus there’s not going to be much London 2012 bounce as the BBC controls all TV rights. Crozier has said he wants to wean ITV off being so reliant from ad revenue – he wants a 50/50 mix of ad revenue and other income sources within 3 years. City analyst Numis Securities tells me it expects ITV ad revenue only to grow 1-2% next year, while Royal Bank of Scotland is more upbeat at 3-4%.