ITV Studios, the production and distribution arm of UK comcaster ITV, increased its sales to streamers by 84% over the first half of 2021, according to ITV’s H1 report, published today.
The company said it was on track to double its revenue from streaming platforms this year, as compared to 2020, with the studio working on both scripted and unscripted productions including The Serpent, Snowpiercer and Cowboy Bebop for Netflix, Physical for Apple TV+ and Love Island Netherlands for Videoland.
However, the report said that producing so many content hours for streamers does not come without drawbacks: “Whilst diversifying our customer base with OTTs is extremely important for ITV Studios, producing more content for, and distributing more content to OTT platforms will impact our working capital going forward due to the upfront cash requirements and the extended payment profile from the OTTs.
“In addition, it limits the ability for us to maximise margins on high-value scripted titles as the OTT platforms invariably want worldwide rights for original commissions.”
Emerging from pandemic
Commenting in the report, Carolyn McCall, ITV Chief Executive, said that on the whole, ITV is “emerging from the worst effects of the pandemic” with total external revenue up by 27% in the first half of the year. This figure stood at £1.548bn for the period up to 30 June 2021, up from £1.218bn in the same period last year.
The total revenue for ITV Studios, which is also behind shows such as Pembrokeshire Murders and Line Of Duty, was also up by 26% in the period, to £798m from £632m in 2020, as the majority of programmes got back into production and shows were delivered earlier than anticipated.
ITV Studios external revenue was meanwhile up by 31% at £532m, while ITV ad revenue also showed strong recovery after the damage sustained following the first UK lockdown, with total ad sales standing at £866, up 29% on the previous year.
In particular, June 2021 delivered the largest advertising revenues for the month of June for ITV in its history, due to the easing of Covid restrictions and increased advertising spend around Euro 2020.
Total ITV viewing was reported as down by 6% in the first half of this year, while conversely VOD service ITV Hub saw an increase of 6% in viewing figures, with a 7% rise in registered users to 34.6 million.
The report also revealed that ITV and BBC joint-venture streamer BritBox has grown by more than 10% in the UK over the period up to 30 June 2021, to 555,000 subscriptions, with the report pointing to its “exciting pipeline of original content in H2 and 2022” with upcoming originals including Spitting Image and Magpie Murders.
The platform is reportedly performing strongly in the US, Canada and Australia with two million total subscriptions, up around 18%, and a South Africa launch coming next month.
“We are now a more flexible, more efficient and more digital business,” commented McCall. “We have successfully completed the first phase of our More Than TV strategy and look forward to building on this platform to accelerate our transformation to a digitally led media and entertainment company.
“We are optimistic about the future, despite the ongoing pandemic risk on our advertising and ITV Studios revenues.”