ITV Half-Year Earnings Rise Amid Dip In UK Viewing; ITV Studios Profits Up 18%

itv logoThe home of Downton Abbey will lose that flagship show at the end of the year, but growth at ITV continues across the board with double-digit profit increases in each sector — and the outlook is positive. Despite a 4% drop in UK viewership, there was a 5% hike in advertising revenues in the half-year ended June 30, and a 6% increase is expected on the horizon through September. Total revenues for the broadcaster and aggressively acquisitive content company were £1.356B ($2.11B), up 11% from the comparable time frame, with pre-tax profits of £391M ($608M) for a 25% rise.

Production arm ITV Studios grew its revenues by 23% to £496M ($771.8M) and profits by 18% to £85M ($132.3M). ITV boss Adam Crozier noted that more than half of ITV Studios’ revenue now comes from outside the UK; it owns several U.S. prodcos including Thinkfactory Media, High Noon Entertainment and DiGa Vision. Among its big purchases this year were The Voice creator Talpa Media as well as Britain’s Poldark producer Mammoth Screen and umbrella shingle Twofour Group. Crozier said ITV would continue “to look for acquisition opportunities in line with our strategy… At the moment, we are in some ways a consolidator. I think the market will continue to consolidate, not just on the content side, but on the broadcast side.”

The Broadcast and Online business of ITV boosted profits by 26% to £315M ($490.1M), helped by 5% growth in advertising revenue and the launch of pay channel ITV Encore. Viewing figures were down 4%, but up 2% on the digital side. ITV noted that the total market “is becoming increasingly difficult to measure, particularly in the short term, as all broadcasters have different definitions and include sources of revenue other than pure spot advertising.” Therefore, ITV is no longer reporting a figure for market share but estimates it is currently slightly behind at the half-year, anticipating a reversal of that for the full year.

ITV is overall bullish on the rest of 2015, with “a lot more money going into drama”, said Crozier, along with new entertainment formats and the improvement of traditionally big hits. New drama series including epic mini Beowulf, supernatural adventure drama Houdini & Doyle, and Jericho with Jessica Raine; as well as Simon Cowell’s Britain’s Got Talent and a revamped X Factor UK; plus a recent deal for Seth MacFarlane’s Family Guy and American Dad, will also bolster the offer in the coming months. Looking forward to 2016, ITV has joint rights to Six Nations Rugby and the European Football Championships which will be held in France next summer.

Speaking on the issue of the BBC, whose charter is being revisited as the government reviews critical aspects of its future, Crozier said, “We think the BBC needs to be more distinctive.” He pointed to Strictly Come Dancing as an example, but added “it’s about appropriate funding and governance… We think they should be an enabler and a partner to the commercial sector rather than a competitor.”

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