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ITV is positioning itself to take advantage of the Hollywood writers strike by supplying more of its programmes to the US to fill emptying schedules, if the impasse with the studios continues into the autumn.
The group warned that advertising revenues had fallen more than a tenth in the past six months as companies reined in marketing spending, sending pre-tax profits sharply lower.
Dame Carolyn McCall, chief executive, said on Thursday that the media group was going through the “worst advertising recession that we’ve seen since the global financial crisis”.
However, the 11 per cent fall in total advertising revenues for the first six months of the year was partly offset by the growth in its studio production business, which makes programmes such as Love Island.
ITV could benefit from strikes held by Hollywood writers if US broadcasters need to fill schedules with pre-made programmes later this year.
ITV Studios boss Julian Bellamy said the broadcaster had a television catalogue of more than 90,000 hours “so we’re in a good position to take advantage of any opportunities”. McCall added: “What we’ll be doing is talking [about] whether we can help fill their schedules.”
However, ITV’s US scripted TV production business could also be hit by the strikes. Bellamy said that “if the strike goes into the autumn it will potentially start impacting production”.
The British broadcaster said total external revenue dropped by 2 per cent for the first six months of 2023 to £1.6bn, with growth in its studio production business offsetting the 11 per cent fall in total advertising revenue for the first six months of the year.
Pre-tax profits fell to £45mn, from £219mn in the first half of 2022, as a result of the fall in traditional TV revenues.
ITV Studios revenue rose 8 per cent to £1bn, but traditional linear and digital TV businesses in the media and entertainment division saw a 9 per cent fall in revenues to £964mn.
The company has also been investing in ITVX, with spending on the new TV streaming service expected to peak this year.
Advertising groups have in recent weeks warned over a slowdown in the sector, spurred by lower spending by tech companies in particular, which is affecting ad-supported broadcasters such as ITV.
However, while advertising on its linear TV channels has struggled, digital advertising across its streaming service grew by 24 per cent.
McCall said that ITV’s strategic transformation — focused on expanding its non-linear TV operations in studios and streaming — had helped offset the weakness in the UK advertising market.
She was more confident about advertising later this year, saying that advertisers were expected to build new campaigns around audiences drawn to the Women’s World Cup, the Rugby World Cup and the return of Big Brother.
Despite the focus on increasing studio revenues, ITV said this month that it had pulled out of talks to buy All3Media, the production company behind Gogglebox owned by Warner Bros Discovery and Liberty Global, which is also a shareholder in ITV.
A deal for All3Media would also have potentially given the market a better gauge of how much the studios business was worth, with analysts saying that it is being undervalued in the market at present. McCall said that — like many consumer-facing businesses — ITV was “frustrated” by its share price.
