ITV announced on Wednesday that it will cut its content budget by £25 million (€30 million) due to a big drop in advertising revenue. The broadcaster expects total advertising revenue for its television and streaming business to decline between 5% and 10% in the fourth quarter compared to last year. This forecast is worse than analyst expectations, which ranged from flat revenues to a 5% drop. For the full year, ITV anticipates a revenue decline of 2% to 3%.
Key Details
The cuts will mainly affect small external commissions, pushing many projects into 2027. ITV's total content budget for 2026 is projected to be around £1.2 billion. The decision to cut costs comes as brands reduce advertising spending amid economic uncertainty and increased competition from digital platforms like Netflix and YouTube. ITV also mentioned new rules that restrict advertising unhealthy food before 9 PM as a factor in the revenue decline.
In July, ITV agreed to sell its television channels, streaming service, and advertising operations to Sky for up to £1.6 billion (€1.9 billion). However, the deal is under review after a public intervention notice from culture secretary Lisa Nandy, which has led to a probe by Ofcom and the Competition and Markets Authority. ITV still expects the transaction to complete in the second half of next year.
Background
The British Film Institute reported that spending on UK film and high-end TV productions fell by £2.08 billion over the past year, reflecting broader challenges in the industry. Total spending on production in the UK was £5.2 billion for the year ending in September, a 40% decrease from the previous year.
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ITV's budget cuts and declining advertising revenues could lead to fewer new shows and more repeats. This may impact viewer engagement and potentially affect share prices. The downturn in the advertising sector may also influence other media companies facing similar challenges. Investors will watch for ITV's upcoming quarterly earnings report, which will provide further insights into the company's financial health.
Based on reporting by: irishtimes.com, theguardian.com