Broadcasting giant ITV has revealed a 16% plunge in revenues from its production arm after taking a hit from last year’s US writers’ and actors’ strike.
The group behind the hit shows Mr Bates Vs The Post Office and Love Island said ITV Studios’ revenues tumbled to £382 million in the three months to March 31 from £457 million a year earlier.
ITV warned it also expects to see Studios’ revenues fall again over the second quarter after the strike action – one of the longest in the industry’s history – brought productions to a halt in 2023, sending shockwaves across Hollywood and globally.
The division is also being impacted by “weaker demand from free-to-air broadcasters in Europe who have been holding back spend until they see more certainty in the advertising market”, according to ITV.
ITV had previously warned that the strikes would delay around £80 million of revenues from 2024 into 2025.
But it said in its latest update that it expects ITV Studios revenues to be “broadly flat” overall in 2024.
The group saw total advertising revenues rise 3% in the first quarter and said it is expecting a jump of around 12% in the second quarter – up about 8% overall in the half-year to June 30 – with the upcoming Euros football tournament set to help drive ad demand.
The ad boost was offset by the production business woes, with total revenues down 7% at £887 million in the first quarter.
Carolyn McCall, ITV chief executive, said: “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, including Hell’s Kitchen USA, The Better Sister, A.C.A.B, Showtrial and Ludwig.”
She added: “Our group cost savings programmes are on course to deliver £40 million of savings this year as previously guided.”
Its trading update also showed further growth at its steaming platform ITVX, with total streaming hours up 16% and digital revenues rising by 11% in the first quarter.
Shares in the firm lifted 2% on Thursday morning.
Russ Mould, investment director at AJ Bell, said: “Facing a structural decline in traditional TV viewership and advertising, ITV is diversified in two areas.
“One of these – streaming and digital advertising – contributed strongly to its first-quarter performance, but the other – the ITV Studios production arm – detracted.
“Given this was largely thanks to an event which was completely outside of ITV’s control – the long-running US writers’ strike which eventually concluded last autumn – it is understandable that it is being given the benefit of the doubt by investors.”
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