Eight weeks into her new job, ITV CEO Carolyn McCall is implementing a “strategic refresh” at the U.K.’s biggest commercial broadcaster, with conditions tough in its domestic market but healthy revenue growth from its U.S. and international businesses.
A double-digit increase in 2017 revenues at ITV Studios helped offset a decline in the core broadcasting numbers at ITV in what McCall described as a “challenging environment.” Delivering her first full results announcement, she said: “We are very focused on our strategic refresh. This will enable us to define a clear strategy and priorities that will highlight the opportunities and address the challenges that we face in an increasingly competitive media landscape. This project is well underway.”
But she declined to go into detail of her new approach, saying it was too soon. “We are focusing very much on some big themes….It won’t surprise you to know they are really around the areas of online, content and distribution, and advertising,” she said on a post-results call.
ITV’s overall 2017 EBITA profit fell 5% at £842 million ($1.2 billion), while revenues increased 4% year-on-year, taking the total to £3.7 billion. ITV Studios, which encompasses the U.K.-listed company’s large U.S. division and its international production and sales operations, posted revenues of £1.6 billion, a 13% uptick on the previous year. Its EBITA profit was flat year-on-year.
Outside of the U.K., ITV America posted a 33% increase in revenues of £313 million and sales at the Global Entertainment distribution division were up 4% at £187 million. ITV, in association with the BBC and AMC, backs the U.S. streaming service Britbox, which reported 250,000 subscribers. ITV said it is looking at adding original content to the service and rolling it out internationally.
ITV will up its dividend payment, and McCall said that despite a fall in advertising revenues, the fundamentals of the business were strong. “ITV delivered a great viewing performance on-screen and online and double-digit revenue growth in video on demand advertising and ITV Studios,” she said. “This gives us a solid foundation to build on for the next phase of ITV’s development.”
McCall’s predecessor, Adam Crozier, embarked on a massive turnaround plan when he took the helm at the broadcaster, reducing its dependence on ad revenue and pushing deeply into production. The new strategy is not likely to be a complete overhaul of ITV’s operations. “The reason we have called it a ‘refresh’ is because genuinely we are not trying to uproot everything because we don’t need to,” McCall said. “The world has changed since the last strategy was set out, so it’s really identifying any gaps that we might have and any areas we need to up-weight rather than looking to uproot everything we have done,” she said.
McCall was asked about her take on Comcast’s bid for Sky. “Quite unexpected but very interesting,” she said. “It just shows how much money there is around and how valuable content businesses and broadcast-type businesses are.”