Earnings: Ailing ITV Merging Online/TV Units; Henry Out; Web Ads Slowing
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ITV (LSE: ITV) is folding its online unit in to its broadcast operations as it struggles to meet optimistic web targets made harder by the economic downturn. Jeff Henry, the MD of the consumer unit who set the goal of making £150 million from online by 2010, is leaving the company in the restructure, which effectively extends director of television Peter Fincham’s role to include online. Consumer unit COO Ben McOwen Wilson will also become a dedicated online director, however.
SEE ALSO: ITV Web Target Hugely Optimistic, Analysts Cut Forecasts
Engineered in ITV’s turnaround plan last year, the target for making £150 million a year from online by 2010 always looked ambitious (it’s already been postponed by two years). Though the target pre-dates recent financial turmoil, ITV is now able to pin the slow progress on the economic downturn…
Reporting earnings today, ITV said it made £25 million from online in the nine months to September 30 - that’s just £1 million more than that period a year ago. Its outlook for the full year now expects online to be “impacted by the advertising slowdown, with profitability further impacted by investment in Kangaroo”.
The restructure points to a desire for more cross-selling of advertising. ITV executive chairman Michael Grade had some fighting talk in the release: “Now is the time to integrate our online video sites editorially with our broadcast business as mass-market channels in their own right and drive the advertising opportunity from that proven consumer demand.”
Not clear if this will come with job cuts, but ITV was already looking for heads to lop off so these synergies won’t harm that. ITV’s online assets Friends Reunited, ITV Local and ITV.com. More highlights from the interim statement after the jump…
—Online grows: Citing Omniture data, ITV claims 82 million video views across its sites for the nine months to September, an average of 5.9 million monthly unique users for itv.com and a peak of eight million in October.
—Revenues down, commissions up: Overall revenue was down only one percent to £1.47 billion, with broadcasting revenue down five percent from £1.25 billion to £1.2 billion. The company did well from selling its shows, making £206 million compared to £153 million in the same period last year, a 35 percent rise, helped by increased commissions from the BBC and Channel 4. ITV’s SDN Freeview multiplex expects a revenue hike from the addition next year of the Discovery (NSDQ: DISAB) Channel to the lineup. And as with almost every media business at the moment, the uncertainty of the economic situation means that “trading conditions across ITV are likely to remain challenging in 2009”.
—Advertising revs down but outperforming the market: Plucky, ITV expects to hold on to its share of national TV advertising revenue year-on-year for the first time in more than 25 years. ITV as a whole saw its net advertising revenue fall 2.5 percent to £1.04 billion, with the TV market as a whole down 3.2 percent. It expects Q4 ad sales to dip nine percent year-on-year.
—Cost-cutting: ITV reiterated its plan to save £40 million in 2009 and £35 million in 2010 from structural reorganisations and making some 1,000 staff redundant.
@psmith
Nov 5, 2008 4:58 AM ET
Posted In: Media & Publishing, TV, Money, Earnings, Companies, ITV
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