ITV has said that disappointing financials at ITV Studios underline the need for creative renewal at the broadcaster. The production and distribution division UK free-to-air broadcaster reported revenues of £293 million for 2010, a £42 million decline year-on-year. Profit came in at £81 million, a £10 million decline on the 2009 figure.
The revenue reverse came as the overall ITV Group turned in an impressive performance, increasing revenue and profit and outperforming the wider TV advertising market in the UK with 16% year-on-year growth.
ITV CEO Adam Crozier has outlined a five-year transformation plan for the broadcaster and said it is currently in phase one of that, which involves ‘fixing’ problems at the business before moving to stage two, strengthening and growing the business. ITV Studios, which produces content and distributes it internationally, will play a key part.
Crozier delivered a damning verdict on ITV Studios performance in recent times. “ITV Studios’ creative content pipeline had depleted over time with no major new entertainment programme format created since 2006,” he noted. “This impacted our ability to sell programmes both in the UK and internationally. ITV Studios’ share of ITV commissions has been falling for a number of years and a fragmented approach to rights ownership and management hindered our ability to exploit our content. We were slow to exploit our programme and channel brands outside of the traditional broadcast arena.”
The renewal plan will see ITV Studios work more closely with the Broadcasting and Online division to create a creative process with a focus on long-running returnable franchises.
“We must own the rights to programmes and formats so that we can exploit the long tail value of them,” Crozier noted. “In the shorter term we may look to acquire rights to distribute internationally with our own content to help drive revenues while we develop our own pipeline.”
He added: “Over the next five years we will increase our number of production bases to ensure we have a presence in key global territories. We can enter new markets organically, as we did in France in early 2010 for less than £1 million or we may invest or partner.”
Wholesale management changes at ITV Studios include the departure of Lee Bartlett, Peter Iacono and Remy Blumenfeld and appointment of Kevin Lygo as managing director and Denise O’Donoghue and Maria Kyriacou as UK MD and MD of ITV Studios Global Entertainment respectively.
Within ITV Studios, 2010 UK production revenues were down £7 million at £64 million; international production revenues down £32 million at £106 million; and distribution revenues down £3 million at £123 million. ITV Group revenue was up 10% at £2.1 billion.