ITV has reported a 10% drop in advertising revenues in the first three months of 2023, with overall media and entertainment revenue falling to £495m. The broadcaster warned of a “challenging” outlook as businesses cut marketing budgets amid an economic slowdown and cost of living crisis.
The company predicted a further 12% decline in ad revenues in the second quarter, including a 14% fall in June alone. However, chief executive Carolyn McCall noted that the first-quarter decline was smaller than the wider TV advertising market.
Digital revenues provided a bright spot, rising 29% to £87m, driven by the ITVX streaming service launched in December. Streaming hours increased 49%, and digital ad revenues are forecast to grow more than 20% in the second quarter. ITVX attracted large audiences for exclusive series such as Nolly and The Twelve.
ITV Studios revenues were flat at £457m. McCall highlighted popular live simulcasts of shows like Love Island and the FA Cup, and expressed optimism for the third quarter with Love Island and the Rugby World Cup. The company aims to deliver at least £750m of digital revenues by 2026.
Analyst Sophie Lund-Yates of Hargreaves Lansdown said ITV’s digital transformation is showing resilience in digital advertising, but traditional broadcasting remains deeply rooted. ITV is targeting £15m cost savings this year as part of a £50m package by 2026. Shares fell 4.5% on Thursday.
