ITV has said that growing its direct-to-consumer business will be a “key focus” of its new strategy as the UK broadcaster aims to be “more than TV”.
In its half year report, ITV indicated that it plans to make a bigger push into the subscription video-on-demand (SVOD) space, claiming that UK consumers are “willing to pay for high quality British television that they can watch on their terms – accessible anywhere, anytime and without ads.”
“We see an opportunity to create an SVOD service in the UK on the back of our brands, our content and significant cross promotion capability,” according to the ITV report. “Our research has shown that around 25% of people who already subscribe to a service are ‘very likely’ to subscribe to more SVOD services in the next two years.”
ITV said that while it is currently reviewing what its SVOD proposition will be, its “nascent” ITV Hub+ offering – a £3.99 per-month ad-free version of its catch-up service ITV Hub – has already seen subscriptions grow 500% over the past year. It plans to invest in distribution, functionality and the ability to segment pricing and propositions to drive this further.
Going forward, ITV plans to manage Hub as a core part of the ITV offering – a move if claims will allow it get the “full value” from the service. ITV Hub has historically been run as a separate, standalone business.
ITV said it is focused on improving the user experience of ITV Hub by introducing more personalisation, evolving the product and content offering, and making it consistent across all platforms.
“This will deliver more engagement and viewing – particularly with younger demographics,” said ITV. “Over the next three years our goal is to increase registered users from 25 million to 30 million. We will also aim to increase our monthly active users to increase reach, engagement and frequency.”
With the establishment of its Centre of Data Excellence, ITV is investing in marketing and data and it aims to both grow the number of consumer relationships it can monetise, and the average revenue per relationship.
It is also creating a dedicated team to create events ideas and is looking at opportunities to develop new content and experiences around gaming, pay-per view and merchandising.
“There’s never been a better time to be a creative entertainment company with viewers’ appetite higher than ever for quality content and this is set to grow by around 5% globally over the medium term,” said CEO Carolyn McCall.
“ITV is well placed to take advantage of this opportunity and our strategy refresh which will enable us to drive profit from three separate sources – advertisers, broadcasters/platforms, and consumers.
“ITV will be more than TV – 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.”
For the six months to June 30, 2018, ITV reported a strong operating performance with its share of viewing up 9% in the period thanks to the success of Love Island and the World Cup.
Total advertising revenue was up 2% year-on-year to £890 million, while ITV Studios’ revenue was up 16% to £803 million. Overall external revenue was up 8% at £1.59 billion with non-advertising revenues up 14% at £958m. Adjusted EBITA was down 7% at £375 million.