ITV banks on World Cup boost as Sky talks rumble on
ITV is eyeing a rebound in ad revenue in the second quarter as the broadcaster bets on the World Cup to power a summer recovery.
The broadcaster and producer behind Love Island and Rivals posted flat revenue for the first quarter, with growth in ITV Studios and streaming platform ITVX offsetting weaker ad sales.
Total revenue rose one per cent in the three months to March 31, while total advertising revenue fell 1.5 per cent – a smaller drop than ITV had previously guided.
Chief executive Carolyn McCall said the company had maintained “good momentum” despite continued pressure on traditional television advertising markets.
“Our strategic priorities of expanding ITV Studios and supercharging our digital Media & Entertainment business continue to deliver clear and positive results,” McCall said.
ITV expects total ad revenue to rise around 10 per cent in the second quarter, with a “strong July” driven by advertiser demand around the Men’s football World Cup.
The update comes as ITV remains in talks with Comcast-owned Sky over a possible sale of its Media & Entertainment division, which includes ITVX and its broadcast channels.
Reuters reported on Wednesday that discussions were progressing towards a deal worth around £1.6bn, including an earn-out structure potentially worth a further £200m depending on performance.
ITVX growth offsets TV decline
ITV Studios revenue rose four per cent during the quarter, helped by deliveries to global streaming platforms including Netflix and Disney+.
The production arm benefited from titles including Skyscraper Live for Netflix and Rivals S2 for Disney+, while internal revenues fell seven per cent following previously announced cuts to soaps and daytime programming.
Media & Entertainment revenue fell two per cent overall, although digital revenues rose 12 per cent and digital advertising climbed 14 per cent.
ITV said ITVX hailed a “record-breaking” start to the year, with streaming hours up 13 per cent.
The broadcaster said it remained on track to deliver full-year guidance, with ITV Studios expected to post “good revenue growth” and ITVX continuing to drive “strong profitable digital revenue growth”.
Shares in ITV have risen this year amid optimism around the possible Sky deal and continued momentum at ITV Studios, which has increasingly become the group’s growth engine as demand for streaming content rises globally.