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CEO Carolyn McCall said ITV was on track to launch its new Netflix competitor, ITVX, later this year and is still “confident that we will deliver at least £750 million of digital revenue by 2026,” McCall said. The new platform will make money from both subscriptions and advertising, using a tiered model similar to Spotify.
Shares in ITV dropped 14% when the broadcaster first announced the plans in March as investors fretted about the cost and competition in the market. ITVX will cost the company £180 million over the next two years as it spends money on exclusive shows and marketing.
- ITV to take on Netflix with new Spotify-style streaming platform ITVX
- Netflix loses $47 billion in value as stock plunges 30%
- Can Netflix get its magic back?
The outlook for the streaming sector has only worsened since ITVX was first announced. Netflix announced its first fall in subscriber numbers in a decade last month, news that wiped billions off the company’s value. Shares are now down 70% since the start of the year.
Netflix’s woes have prompted concerns that the streaming boom could be over, with soaring inflation prompting many viewers to review their subscriptions.
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“As Netflix has shown us, streaming is an incredibly competitive place to be, and even the industry stalwarts are struggling,” said Sophie Lund-Yates, an analyst at Hargreaves Lansdown. “The true final scale of ITV’s digital business is hard to predict, but any market share will be very hard won.”
ITV said today it is “successfully working with distribution partners to ensure that ITVX will be widely available at launch.”
The broadcaster, behind hit shows such as Love Island, saw revenues jump 18% to £834 million in the first three months of the year, boosted by growth at both its studios business and from advertising.
However, the company said ad revenue was set to dip in the coming months due to “macroeconomic and geopolitical uncertainty” and the lack of major sporting events. This time last year revenues were boosted by the Euros.
CEO Carolyn McCall said ITV enjoyed “a robust operational and financial performance”.
Shares rose 1.1p to 68.2p.
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