ITV CEO Carolyn McCall said Wednesday that the U.K. broadcast giant will focus on growing its content business and direct-to-consumer offerings under her leadership as part of a strategic refresh. She talked up the potential for a new subscription streaming service in the U.K., a major move for a company that has been built on TV advertising revenue. Talks are underway with “a range of potential partners,” the ITV chief said.
“We have done a lot of analysis as part of the strategy refresh and what comes out very clearly is that there is a real demand for British, distinctive, content – 92 of the top 100 programs in Britain today are British programs,” McCall said. “There is a demand from people to have that content and they are willing to pay…There is a bit of a gap and a bit of a window.”
With the BBC and AMC, ITV already operates the BritBox streaming service in North America. In the U.K. it has ITV Hub+ and SVOD will be a focus for the company. Unveiling a strategy dubbed ‘More than TV’ ITV said it will concentrate on three areas – growing the domestic and global content business, creating a direct-to-consumer business, and its traditional broadcaster-producer activity.
“ITV will be more than TV,” McCall said. “It will be a structurally sound integrated producer broadcaster where we aim to maintain total viewing and increase total advertising revenue; it will be a growing and profitable content business, which drives returns; and it will create value by developing and nurturing strong direct consumer relationships, where people want to spend money on a range of content and experiences with a really trusted brand.”
The new strategy, which is a “a refresh not a reboot,” will have £40 million ($52.6 million) behind it in 2019, and £60 million over the next three years. That outlay will be offset by up to £40 million in cost savings.
McCall would not be drawn on whether ITV was interested in buying Endemol Shine, which is on the block and attracting big-name suitors. “We will look at M&A in a very returns-focused way,” she said. ITV has been an active acquirer of production businesses in recent years, notably in the U.S.
Outgoing CFO Ian Griffiths addressed ITV’s ambitions in U.S. drama production and said there will not be a major acquisition, with talent deals seen as the way forward. “We’re looking at investing in U.S. scripted, [but] not in scale, and one of the things we are ruling out is a significant M&A investment,” he said.
The company upped revenues for the six months to end-June. They came in at £1.6 billion, an 8% increase year-on-year. ITV Studios continued to perform well with half-year revenues of £803 million, a 16% uptick. EBITA profit declined 7% to £375 million, with a 12% decline in broadcasting and online partially offset by 7% growth at ITV Studios. ITV said World Cup costs hit the broadcasting segment.