The UK’s biggest commercial broadcaster, ITV, has attributed its drop in advertising revenues to uncertainty over a hard or soft Brexit. It registered a 4 per cent fall in advertising in the three months to the end of September, compared with the same quarter in 2015. The broadcaster predicted a further 7 per cent fall in the final quarter of 2016 and consequently forecasts a drop of 3 per cent for the whole of 2016. This will undoubtedly disturb the television industry as it looks ahead to unprecedented levels of uncertainty in 2017.
However, the broadcaster emphasised that its recent push to boost other revenue streams, such as its production arm, ITV Studios, would help to offset the disappointing advertising figures. The broadcaster’s chief executive, Adam Crozier, said: “ITV is now a much more balanced and resilient business. Even against the current uncertain economic backdrop, we expect 2016 earnings to be broadly in line with last year.” Still, Mr Crozier admitted that profits in the studio division were likely to be flat in 2017.
In terms of viewing figures, the group experienced a boost with the main ITV channel’s share of viewing up 3 per cent. Its online viewing numbers jumped 49 per cent year-on-year in the first nine months of 2016. Analysts at Citi stated that ITV’s cost-cutting programme and solid onscreen performance meant the company was better equipped to deal with what could be a bumpy 2017, as the advertising market tightens due to the economic uncertainty caused by Brexit. “The point is that ITV’s earnings per share feels better shielded than in the past in the face of falling NAR (net advertising revenues)” Citi analysts said.