×
You will be redirected back to your article in seconds

ITV Chief Carolyn McCall Talks Direct-to-Consumer Plans, Endemol and Netflix Effect

CANNES — ITV is joining the growing list of traditional media heavyweights looking to move aggressively into the direct-to-consumer subscription TV arena.

Carolyn McCall, ITV’s newly appointed CEO, made it clear that she sees the need for the U.K.’s largest commercial broadcaster to be a player in the streaming marketplace and to take advantage of the fan base generated by shows on the network and those produced by ITV Studios. McCall spoke Monday during the keynote conversation that kicked off the four-day Mipcom international TV sales conference.

“We wouldn’t be making the right shifts, looking at the world around us, if we weren’t doing something direct-to-consumer,” McCall told journalist and media commentator Kate Bulkley.

Since McCall took the CEO job in January, ITV has devoted more resources to data analytics and the art of understanding more about its viewers.

“We’re creating a division that is about directly connecting with the consumer, which they really want,” she said. “We have communities of fans that want to have a deeper relationship with us.”

ITV plans to launch an augmented streaming product next year for the British market, which will showcase “British-originated content” from ITV and possibly other suppliers. The service will combine ITV’s existing advertiser-supported VOD services. It will not have original content at the outset but that is a future goal, she said.

“It will become much more of a destination,” she said, noting that the service will offer users more options for personalization and recommendations. “It will become a much richer user experience.”

ITV’s service will have a “phased” rollout as the company experiments with the best interface and content options for viewers. She emphasized the importance of “a human connection” in assembling such a service. Pressed by Bulkley as to whether ITV sees Netflix as its primary streaming competition, McCall noted that the two companies are in business together in some areas — through ITV Studios — and competitors in others.

“I think they’re more friends than enemies,” she said of Netflix. McCall credited Netflix and Spotify with training a generation of consumers to pay for content delivered online.

“It is a significant shift for consumers to say ‘I want to pay for what I want in content,'” she said. “Netflix is an important client for us and they’ve changed the way consumers view (television). We just have to respond to that change.”

McCall also spoke to a clutch of reporters ahead of her keynote. She addressed ITV’s now-ended courtship of Endemol Shine, the production and distribution giant is on the block. ITV had been seen as a frontrunner to buy Endemol until it officially pulled out earlier this month. “It’s not that it wasn’t a good fit,” McCall told Variety. “Strategically we know it inside out; it’s a studios business. Strategically it made sense and our shareholders would have expected us to look at it.”

McCall said the decision came down to “many factors” including the price tag Endemol is seeking, reported to be around $2.4 billion. Industry sources at the Mipcom market have predicted the final sales price will be below $2 billion. But McCall said ITV’s talks with Endemol “didn’t get onto price.”

The timing of taking on another big acquisition of production assets wasn’t optimum for ITV. During the last decade, the company went on a buying spree of content companies, mostly focused on unscripted product, on the watch of McCall’s predecessor, Adam Crozier.

“It will always come down to ‘is it the right time to put in a bid for this asset’ and it didn’t feel like the right time,” McCall said. She added that ITV is not likely to make a run at scripted companies any time soon. 

“We don’t need to do that, we feel that would not be the right use of our capital,” she said.

Before coming to ITV, McCall ran Britain’s EasyJet Airline Co. for eight years. Before that she was CEO of Guardian Media Group. She proved during her Mipcom address to have a deep understanding of the TV business. She pushed back against Bulkley’s question about how ITV and other traditional media giants may struggle to complete with the enormous balance sheets of the FAANG tech giants.

“Ten years ago you could get 70% reach in Britain by using ITV. Today you can get 70% reach by using ITV and hub. There’s been no diminution of reach as a result of all the changes that are taking place,” McCall said. 

ITV’s revenue base is about 60% dependent on advertising, with the rest coming from the bulked-up ITV Studios operation. However, profits are about 70% driven by advertising because it is a higher-margin business for ITV than content licensing.

There’s been speculation that ITV may have to restructure that operation after paying top-dollar prices. But McCall remains bullish on the studio operation as a competitive advantage for ITV, in the linear business as well as with its streaming ambitions.

“We do believe the global content business is going to grow for some time to come,” she said.

McCall also called it a “misnomer” that teenagers and young adults no longer watch linear TV. ITV’s reality hit “Love Island” draws the 16-to-34-year-old demographic in droves, as do other hits like “Saturday Night Takeaway.”

With all of the gyrations in the media marketplace, McCall indicated that running ITV is not as stressful as the responsibility she shouldered as CEO of the low-cost EasyJet airline.

“Having run a safety business, not a lot keeps me awake at night,” she said. “Now it’s just about speed, agility and flexibility and making sure you have the right skills moving in the right direction and you are really listening to your consumers.”

More TV

  • Grime Star Stormzy Joins Upcoming BBC

    Grime Star Stormzy Joins Roc Nation Exec Produced BBC Drama ‘Noughts & Crosses’

    “Noughts and Crosses” just added another musical heavy hitter with grime supremo Stormzy set to star in the adaptation of the Malorie Blackman novels for the BBC. Jay-Z’s Roc Nation is already on board and will exec produce, as will Participant Media. Stormzy has an on-screen role and will play Kolawale, a newspaper editor and [...]

  • Cineflix Alum Launches New Banner Fugitive,

    Cineflix Alum Launches New Banner Fugitive, Tees Up Alex Gibney, Yolanda Ramke Shows

    Anthony Kimble, formerly of Cineflix, National Geographic, and Viacom’s Channel 5, has launched Fugitive and will develop, finance, and exec produce drama and unscripted TV through the new banner. Its first projects include “Uncanny Valley: The Truth About Thinking Machines,” which comes from producers Topic and Jigsaw. A series about A.I. and the future of [...]

  • Cineflix Rights Scoops Icelandic Political Series

    Cineflix Rights Scoops Icelandic Political Series 'The Minister'

    Cineflix Rights, a leading U.K. content distributor, has acquired “The Minister,” the anticipated political drama series headlined by Icelandic star Ólafur Darri Ólafsson (“Fantastic Beasts: The Crimes of Grindelwald”). Produced by the Icelandic company Sagafilm, “The Minister” centres on Benedikt Ríkhardsson (Ólafsson), a populist politician who becomes Iceland’s Prime Minister. However, Benedikt is suffering from [...]

  • WGA Authorizing Managers, Lawyers to Make

    WGA Authorizing Managers, Lawyers to Make Deals if Agents are Fired

    The Writers Guild of America has authorized managers and lawyers to negotiate deals for writers in place of agents — if the guild tells members to fire their agents on April 7. The guild’s negotiating committee notified members of the plans in a message Wednesday. The WGA and the Association of Talent Agents having made [...]

  • Rachel Bloom and Aline Brosh McKenna'Jane

    Rachel Bloom on the 'Beautiful Mystery' of the 'Crazy Ex-Girlfriend' Series Finale

    While four seasons of “Crazy Ex-Girlfriend” have explored musical genres from boy bands to country, the one type of music series co-creator and star Rachel Bloom admits the show will not explore before the end is Rebecca’s own style. “Basically the idea is that part of the music in her mind is her looking inside [...]

  • Netflix's Lisa Nishimura Named Indie Film,

    Netflix's Lisa Nishimura Named Indie Film, Documentary Features Head

    In the wake of Bela Bajaria’s recent move to lead Netflix’s international non-English original TV series, the online streamer is shuffling its leadership team to more clearly distinguish between development of its English and non-English language content. As a result, Netflix has elevated Lisa Nishimura to vice president of independent film and documentary features, a [...]

More From Our Brands

Access exclusive content