ITV unveils new five-year plan
BROADCASTER ITV has today unveiled details of a five-year “transformation” plan aimed at reshaping the organisation.
The broadcaster said that it is planning a major shake-up of its digital and online offerings, as well as attempting to create more formats within its ITV studios business that it can sell around the world.
It is also moving into pay TV by offering its ITV2, ITV3 and ITV4 channels in HD as part of Sky’s HD package from next year – a move which chief executive Adam Crozier said would mean the broadcaster will “receive carrier revenues for our HD Channels as well as increasing their reach.”
The company behind Coronation Street and the X-Factor, announced the shake-up of its strategy while unveiling a strong set of interim results which showed that its earnings before interest, tax and amortisation increased to £165m from £64m a year earlier. It also said that its net advertising revenues increased by 18% – outperforming the general market upswing of 15%.
As a result, the firm was able to reduce its net debt to £437m – down from £612m at its financial year end.
Chief executive Adam Crozier said: “The good financial performance we have reported today has enabled us to reduce our debt significantly but does not disguise the underlying challenges we face.
“We are under no illusion that ITV needs to change substantially. For the past decade ITV has not faced up to the challenges presented by the rise of internet-based platforms, the continuing growth of pay TV and subscription services and the globalisation of content.”
He said the company’s priority for the next 18 months would be to make the organisation a “creatively dynamic and fit-for-purpose organisation while maintaining strict financial controls”.
The programme budget for ITV1 has been capped for the next two years at £800m, but an additional £75m has been set aside for investment in both its online performance and its digital channels.
Mr Crozier admitted that ITV’s online offering had fallen behind competitors. He also added that capital investments could be made from its strengthened balance sheet.
The broadcaster made no announcement, however, on a potential move to Peel’s MediaCityUK development or on the future of its 24-acre Quay Street site in central Manchester.
Mr Crozier added that the firm eventually expects to generate more of its revenues from selling its content across different platforms – whether free-to-air or on pay TV – as well as generating more content and formats which it can sell in the global market.
As a result, he said the broadcaster would eventually be far less reliant on advertising revenues – he anticipates that within a decade only around half of the firm’s revenues will come from TV advertising.
“There are no quick fixes, no silver bullets. This is about taking action over a five-year period.”
