ITV has blamed the knock-on effects of the US actors and writers strike for a hit to its revenues – but expects the Euro 2024 football tournament to contribute to a bounceback later this year.
The UK’s largest free to air broadcaster said last year’s Hollywood strikes had dented the performance of its ITV Studios division, which has made shows such as Love Island and Mr Bates vs the Post Office.
ITV said revenues had fall by 16% to £382m in the first three months of the year owing to knock-on delays in commissioning new projects as the industry continued to recover from the strikes in the US. ITV previously said the Hollywood strike would push about £80m of revenue from 2024 into 2025.
Revenues at the studios division are expected to remain broadly flat on last year, with the first quarter decline offset by a promising pipeline of programmes, including Hell’s Kitchen US for Fox and The Better Sister and Lazarus for Amazon Prime Video.
Despite attracting huge audiences with Mr Bates vs the Post Office, ITV revealed last month that it had lost £1m on the agenda-setting drama about the Horizon IT scandal.
The TV and film production industry has faced multiple headwinds, as a slowdown in the advertising market combined with the US strikes and a slump in commissions caused companies to struggle. Many film- and TV-makers were forced into “heartbreaking” decisions to retrain.
But ITV shares rose almost 2% after the broadcaster reported that advertising had started to recover in the second quarter. The recovery, it said, had been bolstered by improving consumer confidence as well as advertisers taking airtime for the Uefa Euro 2024 football championships in June.
ITV’s total first-quarter revenue was down 7% at £887m, as the growth in total advertising revenue was offset by the decline in revenue from its studios division.
Total advertising revenue rose by 3% in the first quarter, with an increase of about 12% expected in the second quarter.
The recovery in ad revenues is significant for ITV, which was badly hit by last year’s brutal drop-off, reporting a 15% fall in linear TV advertising in 2023. Carolyn McCall, its chief executive, said last July that ITV was facing the worst advertising crisis since the advertising downturn that accompanied the 2008 financial crisis.
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McCall said on Thursday: “Over the full year we expect ITV Studios’ revenues to be broadly flat. We have a strong pipeline of programmes, good demand for our quality content as we increasingly diversify our customer base towards streamers and the phasing of deliveries is heavily weighted to the second half of the year.”
ITV has already announced a cost-saving programme that it hopes will provide savings of £40m this year, helped by making its operations more efficient and by new technology.