Love Island broadcaster ITV reveals fall in revenues from production arm

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 per cent in the first quarter and said it is expecting a jump of around 8 per cent in the half-year to June 30, with the upcoming Euros football tournament expecting to help drive ad demand.

The ad boost was offset by the production business woes, with total revenues down 7 per cent at £887m in the first quarter.

Carolyn McCall, ITV Chief Executive, said: "ITV continues to execute its strategy successfully.

"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 Hells Kitchen US, The Better Sister, A.C.A.B, Showtrial and Ludwig.

"ITVX continued to build on its strong first year and delivered double-digit growth in both digital viewing and digital advertising revenues in Q1 (the first quarter) and we expect continued strong growth in both throughout the year.

"Total advertising revenue grew 3 per cent in Q1, in line with guidance, with good momentum continuing into Q2 (the second quarter) benefitting from the Euros in June.

"Our group cost savings programmes are on course to deliver £40m of savings this year as previously guided. Overall we expect to continue to make good strategic progress and we remain on track to achieve our KPI targets for 2026."

Victoria Scholar, Head of Investment, at interactive investor said: “ITV Studios took a hit last quarter from the US writers’ and actors’ strike and its performance is expected to be broadly flat this year.

"But after a tough period last year, shares in ITV have been rebounding in 2024. In March the company said it was seeing more confidence in the advertising market and it enjoyed its biggest drama success in more than a decade last quarter, Mr Bates vs The Post Office, helping to boost investor confidence in the business.

"ITV is also hoping for a boost from programmes like Hells Kitchen US in the second half of the year and it also pinning its hopes on stronger ad revenues around the Euros football championships which begin in June.”