It’s no surprise that ITV’s advertising revenue is suffering given the current backdrop but that doesn’t make it any less sobering.
At a time when the company is trying to get its ITVX platform off the ground it is particularly unhelpful that advertising is challenging. The business is having to flex the balance sheet to invest in ITVX with net debt increasing materially, while profit is also down.
AJ Bell’s Russ Mould said: “Early reports on ITVX since its December launch continue to be positive and you can see a slight gap in the market for a free platform given many people are cutting back on streaming subscriptions thanks to cost-of-living pressures.
“ITV still needs the content to attract sufficient eyeballs to drive advertising spend to the platform and it cannot afford to spend the kind of sums Netflix, Amazon and Apple do on programming.
“Perhaps with judicious use of its back catalogue and smart acquisitions the company can establish itself as a real presence in the streaming market. The strong showing for its ITV Studios production business at least shows it knows how to make good TV.
“Coming up on its 70th birthday ITV needs to prove it is not set for retirement and can remain relevant in a highly competitive entertainment market.”