ITV shake-up aims to boost streaming and cut costs

Chris Johnston
·2 min read
Love Island
Love Island

ITV will cut costs and reduce office space under plans to boost its streaming operations amid the rise of competitors such as Netflix and Disney.

The commercial broadcaster will create a new media and entertainment division made up of two new business units - broadcast and on-demand.

Director of television Kevin Lygo will be managing director of the division and head the broadcast unit, while chief marketing officer Rufus Radcliffe will lead on-demand.

The on-demand unit will take in ITV's catch-up service Hub, the subscription and advertising-free version Hub Plus as well as BritBox, its streaming joint venture with the BBC. 

Chief executive Dame Carolyn McCall said the new media and entertainment division would allow ITV to continue delivering mass, live audiences to advertisers while also creating programming that would appeal to younger viewers. 

"Linear channels will be around and be profitable for many years but we also need an on-demand business which will increasingly be the focus of our new investments in content and technology and which will be our growth engine," she said.

Tom Harrington at Enders Analysis said the move appeared to be an attempt to put some distance between ITV Hub and the broadcasting business.

"Hub has always been hamstrung somewhat by broadcast - compared to other broadcasters there has been noticeably less enthusiasm to build up Hub to the detriment of linear and the bulk of ITV's advertising," he said.

Markets Hub - ITV PLC
Markets Hub - ITV PLC

ITV also announced plans to reduce its London office space in the coming years and move towards more flexible working.

"No decision about exactly what this means for ITV’s current London offices has been made as the company assesses the sort of space needed to support the business in the future," Dame Carolyn added.

ITV's profits were almost wiped out in the first half of the year after suffering the worst decline in advertising revenue in the FTSE 250 company's 65-year history. It made pre-tax profit of just £15m for the six months to June 30, down 93pc from £222m for the same period last year. 

ITV also has a highly successful Studios division that makes programmes for its channels such as Love Island and The Voice, as well as other broadcasters, with hits including Bodyguard and Line of Duty for the BBC 

Shares fell 2.3pc to 72p, valuing the company at £2.9bn. The stock has halved since the start of the year.