ITV and BBC announce online streaming service to rival Netflix

ITV has reported boosted revenue this morning as the broadcaster announced it is in final talks with the BBC to launch Netflix rival Britbox.

The figures

Total external revenue was up three per cent to £3.2bn and total non-advertising revenues grew five per cent to £1.9bn, ITV said in its full-year year results for 2018. Meanwhile, total ITV Studios revenue increased six per cent to £1.6bn.

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The company reported a one per cent increase in total advertising revenue driven by a 36 per cent rise in online advertising which offset a decline in TV commercials.

However, adjusted earnings before interest, taxes, and amortization was down four per cent to £810m, and adjusted earnings per share also fell four per cent to 15.4p.

Total ITV viewing was up three per cent to 17.1bn hours driven by an increase in viewers of daytime TV shows including The Chase and Good Morning Britain, while Love Island was the most watched programme on any digital channel with 4m viewers.

Why it matters

The broadcaster has faced competition from online streaming services such as Netflix and Amazon Prime, which the creation of Britbox is designed to tackle.

The paid-for online streaming service, which is expected to be launched in the second half of this year, will offer British boxsets and will commission new programmes from British production companies.

The channel has struggled with declining revenues from advertising during television commercial breaks.

The company launched its “More than TV” last year, which aims to focus on content production and reposition the broadcaster as a creative brand.

What the company said

ITV chief executive Carolyn McCall said: “ITV is making good progress as we invest in our More than TV strategy – repositioning the ITV brand, developing our data and digital capabilities, increasing our ability to offer addressable advertising and expanding our direct to consumer activities. Cost savings, which will partly offset this essential investment are on track.

“We are in the concluding phase of talks with the BBC to establish a strategic partnership to bring BritBox, an exciting new SVOD service, to UK audiences.

This will provide an unrivalled collection of British boxsets and original series in one place. We have agreed a joint vision for the service and are now working on a formal agreement.

We anticipate that other partners will be added to BritBox and we will both speak to regulators and the wider industry about our proposals.

“We have started 2019 with strong onscreen and online viewing. However, the economic and political headwinds for the UK will have an effect on the advertising market and while ITV is increasingly diversified, we remain sensitive to this.

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We continue to be very focused on delivering in the areas we can control and actively mitigating the factors outside the company’s control.

“We have a robust balance sheet which enables us to make the right investment decisions to build a growing and sustainable business for the future and to deliver returns to shareholders.”