ITV posts strong third quarter results in 2015 despite X Factor viewing figures and the end of Downton Abbey
ITV's top shows might be haemorrhaging viewers (The X Factor) or ending (Downton Abbey) but that hasn't stopped it posting strong results for the three quarters of the year so far, powered by double-digit growth in its production arm ITV Studios.
The figures
Revenues at the broadcaster rose 13 per cent to £2.04bn in the nine months to 30 September, with ITV Studios revenue jumping 28 per cent to £782m as the firm looks to build its in-house proposition.
Broadcast and online revenues rose seven per cent to £1.53bn, with the online, pay and interactive division up 29 per cent.
As a result, ITV said it was on track for "strong double-digit profit growth" for the full year, adding that the initial outlook for next year was "encouraging".
Why it's interesting
ITV was at a crossroads a few years back, where it was home to some of the most successful formats in the country – or the world – such as The X Factor, Britain's Got Talent and I'm A Celebrity, but received relatively little for that privilege.
On top of this, there was the growing challenge presented by the rise of PVR, meaning everyone is skipping through adverts.
As a result, ITV embarked on an acquisition trail, scooping up independent producers such as Graham Norton's So TV, The Garden, 12 Yard, Big Talk, Two Four and most recently The Voice producer Talpa. It's no coincidence that The Voice is no longer going to be shown on the BBC.
All this is helping ITV Studios become a bigger and more profitable, not only future proofing the business, but theoretically allowing it to expand internationally – as long as it produces globally appealing formats.
What they said
Chief executive Adam Crozier said: "We're on track for another year of double digit profit growth as we continue to strengthen ITV in the UK and internationally.
"As we expected, share of viewing has improved in the second half driven by strong performances in daytime, the soaps and the Rugby World Cup, and continuing this trend remains a key focus for the business. We're also strengthening our broadcast business with the proposed acquisition of the television assets of UTV.
"ITV Studios goes from strength to strength with revenue up 28 per cent driven by good organic growth, particularly from the US and global entertainment, and our acquisitions, including Talpa our largest to date, are continuing to deliver.
"Our US dramas have performed well with Aquarius and The Good Witch both recommissioned while in the UK we have a strong pipeline of new drama coming through including Beowulf, Jericho, Victoria and Tutankhamun as well as returning dramas Unforgotten and Poldark.
"Looking forward we expect ITV Family NAR to be up at least five per cent over the full year, again ahead of our view of the TV advertising market, with growth across all key advertising categories. We are confident of further good growth across ITV for the remainder of this year and into 2016 as we continue to exploit our integrated producer broadcaster model in the UK and to build a global content business of scale."
In short
The X Factor might be struggling to pull in viewers, but ITV is rising above it thanks to a more diversified approach to the business.