ITVX streaming news eclipses stellar results
Despite reporting a near 50 per cent jump in annual profits yesterday, shares in Love Island broadcaster ITV slumped as much as 25 per cent, with investors turning their attention to the upcoming launch of streaming service ITVX.
The market was left bewildered by the broadcaster’s plans for a new integrated advertising and subscription funded platform, which ITV chief Carolyn McCall said would boast the “familiarity of ITV, but the X content that you wouldn’t expect from ITV”.
ITVX will essentially replace the notoriously clunky ITV Hub, giving viewers the option to pay for a premium subscription, allowing them to dodge ads and access ‘exclusive’ content, including Britbox. But the point of confusion came when it was suggested that all content would eventually reach the linear ITV channel , drawing question marks about the viability of a premium service.
Tom Harrington, TV analyst at Enders Analysis, suggested that yesterday’s share slump was also down to “unfortunate timing” of ITV’s announcement, highlighting the increasingly saturated market and the recent disappointment in the likes of Netflix.
Nonetheless, ITV emphasised that the demand for advertising had remained strong, and pledged to invest around £1.23bn on content in 2022, rising to about £1.35bn next year.
But for Harrington, the move is a long time coming: “The transition to the digital environment has been slow for ITV because linear has been so profitable; they haven’t wanted to cannibalise the profitable parts of its business”, he said.
As such, he suggested that its budgets were still relatively modest compared to US giants, making the emphasis still very much on the money-making linear rather than a genuine digital experience push, which people would buy into.