ITV has announced plans to cut costs by an additional £20 million, in addition to the £40 million already planned, due to the negative impact of the Hollywood writers’ and actors’ strikes on its revenues. The major terrestrial channel saw a decline in sales, particularly in its ITV Studios arm, leading to a drop in group revenues by 8 per cent to £2.74 billion for the nine months up to September compared to the same period last year.
The decline in revenues was primarily attributed to ITV Studios, the production business responsible for popular shows like Rivals for Disney+ and Ludwig for the BBC. Studio revenues fell by 20 per cent to £1.21 billion as a result of the strikes affecting various productions, causing around £80 million in revenues to be postponed to the next financial year. Additionally, lower demand from free-to-air broadcasters in Europe further impacted the Studios business.
To address the revenue challenges, ITV announced plans to cut costs by an additional £20 million this year, with £10 million coming from reductions in content costs. This is in addition to the £40 million in cost savings already planned. ITV Chief Executive Carolyn McCall acknowledged the challenges posed by the strikes and the softer market from free-to-air broadcasters but highlighted the company’s strong strategic progress and creativity.
Despite the cost-cutting measures, shares in ITV fell by 7.4 per cent on Thursday morning following the announcement. The media company is facing tough market conditions, but McCall remains optimistic about ITV Studios’ performance and the company’s overall strategic direction.
The impact of the Hollywood strikes on ITV serves as a reminder of the interconnected nature of the entertainment industry. Disruptions in one part of the world can have far-reaching consequences for companies like ITV, highlighting the importance of diversification and adaptability in the face of external challenges.
As ITV navigates through these challenges, investors and industry analysts will be keeping a close eye on how the company manages its costs, sustains its creative output, and continues to deliver value to shareholders. The media landscape is constantly evolving, and companies like ITV must stay agile and innovative to thrive in a competitive and ever-changing environment.
