Coronavirus forecast to dent ITV's ad revenues
ITV may see as much as a 10% drop in its advertising revenues in April, the broadcaster has warned, as the spread of coronavirus prompts travel brands to delay their TV campaigns.
In its full-year results for 2019, ITV said it had seen an impact from "travel advertising deferments" in March and April, though added that it is "too difficult to assess the further implications of the coronavirus [at this stage]".
Meanwhile, the broadcaster reported a -1.5% decline in its total ad revenue for the year, which it claimed was "better than previously guided". Ad revenue dropped by £27m to £1.77bn.
Broadcast revenue was also down - falling -2% to £2.06bn - although online revenue reportedly grew by 21%.
Total external revenue was up 3% to £3.3bn, compared to £3.2bn in 2018 - including a 7% rise in non-advertising revenue. However, profit before tax fell by 7% to £530 million in 2019, down from £567 million.
Following the release of its results, shares in ITV fell by nearly 8%.
Nevertheless, Carolyn McCall, ITV's chief executive, said the broadcaster's full year results had come in "ahead of expectations", with revenue growth in ITV Studios, advertising and online during the second half of the year.
ITV has also forecast a 2% rise in ad revenues over the first quarter of 2020.
"We are making good progress in each area of our strategy and our investments in data, technology, online and in streaming will enable ITV to be a sustainable, diversified and structurally sound digital media and entertainment business," McCall added.
Meanwhile, earlier this week ITV announced that it would be expanding BritBox - its joint SVOD service created with the BBC - to Australia before the end of the year. ITV has yet to release subscription numbers in the UK, however it is estimated to be in the hundreds of thousands.
Noting that the uptake of Britbox has been "slow" since launch and that the streaming service has "struggled to reach younger audiences", Luke Bozeat, chief operating officer at MediaCom UK, has argued that ITV will need to invest in new, original content "that supplements its long-standing legacy" if it is to "turn its fortunes around".
"Love Island is an example of a programme that is so much more than just a show. It has attracted the following of millions and, despite lower winter viewing figures, has created a sense of loyalty through its Aftersun spin-off, podcast series and mobile app," Bozeat said.
"All of these added platforms create the opportunity for brands to partner with publishers and creative talent to build an ongoing narrative past each standalone episode. More innovative programming that can capture the imagination and interest of younger audiences will be key to ITV’s future.”