ITV Studios, Love Island help UK broadcaster fight advertising lull

Love Island CBS

ITV Studios’ shows including Love Island and Snowpiercer are set to boost the revenues of the UK broadcaster’s production arm by more than 5% this year.

ITVS has been ramping up its stakes in production assets over the past five years, with deals for companies including Cattleya in Italy, US-based Tomorrow Studios and Piv Bernth’s Apple Tree Productions.

That strategy has helped the division secure £1.1bn ($1.4bn) revenue for the nine months to September, up 1% on the same time last year, with estimates of annual revenue for 2019 standing at £1.8bn, up 5% on 2018.

Carolyn McCall

Carolyn McCall, ITV’s CEO, said the production arm “will benefit from a very strong second-half delivery schedule” and added that the quarterly results reflected this surge.

Driving the growth, McCall added, has been ITV America, which houses producers including High Noon Entertainment, Leftfield Pictures and Thinkfactory Media.

The US group’s output is behind shows including Love Island US for CBS, which has been renewed for a second season and is produced by ITV Entertainment.

ITV’s American arm is also behind Hell’s Kitchen for Fox, while scripted series Snowpiercer is from Turner’s Studio T and Tomorrow Studios, the joint venture launched by ITVS and Marty Adelstein in 2014. The show will debut in 2020 on TNT and TBS.

“We expect this performance to continue in Q4, and over the full year we are confident that we will deliver at least 5% growth in ITV Studios’ total revenues at a margin of 14% to 16%.”

This is expected to impact ITVS revenue next year, McCall admitted, but she also pointed to shows such as Zero Zero Zero, Suburra and Queer Eye as evidence of a strong pipeline.

Unveiling the third quarter results, McCall said she was pleased with feedback from recently launched streamer BritBox, operated with the BBC, and said forthcoming shows including Mike Bartlett drama Sticks And Stones and the UK version of The Masked Singer would benefit the broadcaster’s UK operations.

Total external sales stood at £2.2bn for the first nine months of 2019, down 2% on last year, while advertising revenue was down 3% at £1.2bn. Ad sales are predicted to be 2% down over the year as a whole.

Elsewhere, the UK commercial broadcaster said its viewing figures were boosted by the Rugby World Cup but were down 700 million to 12 billion.

McCall said: “ITV’s overall performance for the first nine months of 2019 was as we expected, and although the economic environment continues to be uncertain, we are making good progress in executing our strategy.”