There are all sorts of concerns about ITV’s long-term future but the here and now is looking pretty good.
Indeed the company’s half year results, unveiled this morning, show it in the sort of shape that would intimidate a contestant on Love Island.
ITV’s share of television viewing has grown for a third consecutive year. It beat the BBC in the ratings during prime time for the first time since 2011. Carolyn McCall, ITV’s new chief executive, has plenty to sing about.
ITV can still put bums on seats in a way advertisers love. 26 million tuned in to watch England lose to Croatia in the recent World-Cup semi-final.
Love Island, on ITV2, is like catnip for the under 25s - regularly pulling in audiences of 3 million, a large number of them online. Coronation Street and Emmerdale are Britain’s most popular soaps.
But the sand is shifting beneath ITV’s feet. Viewing is heading online, advertising revenue will follow it. 75% of all viewing is live TV but just a few years ago it was 80% - the trend is clear.
Netflix and Amazon are ascendant and signing-up households to their online streaming services. Apple is preparing to get into television. Netflix will spend up to £10 billion making programmes this year. ITV will spend £1.1 billion.
McCall calls for tougher regulation of online rivals
“We can compete,” insists Carolyn McCall “We have no problem with competition, competition makes us better, but we want a level playing field.” This morning she called for ITV’s online rivals to be held to the same broadcasting rules and standards.
McCall said: “We are highly regulated. Our editorial content is highly regulated, our advertising content is highly regulated - that doesn’t exist in any other medium, it’s certainly doesn’t exist on the internet. We’re not moaning about the competition or about what Google or Facebook do...But we are saying they should be regulated.”
ITV may get its way. Ofcom, the media regulator, is sufficiently worried about the long-term future of public-service broadcasting - on the BBC, ITV, Channel 4 and Channel 5 - to have said so publicly.
It’s considering intervening to help them better compete with the threat of Netflix and the other tech giants.
The success of ITV Studios - which make programmes for ITV and its rivals - is impressive and has reduced the company’s reliance on advertising revenue, which for ITV is up slightly on last year.
ITV banked £890 million of advertising sales in the first six months of this year - that’s a very significant sum of money.
The government is consulting on whether to ban junk food TV advertising before 9pm. McCall wouldn’t say how much such a pre-watershed ban would cost ITV. It would likely be many tens of millions of pounds.
McCall doubts a ban would be effective and is not convinced there is a link between TV adverts promoting products that are high in fat, salt and sugar, and childhood obesity.
McCall doesn’t think the link between junk food TV ads and childhood obesity has been proven
“I don’t think that has been proven” she said. “There are many different research studies and Ofcom themselves did a study three years ago that did not evidence that. The evidence is very important”.
McCall is upbeat about ITV’s future. Today she set out her strategy for the company: take more money from advertisers; more money from platforms and broadcasters and increase marketing direct to consumers who love and trust the ITV brand.
It was fine-tuning rather than an overhaul. The share price barely moved - a sign perhaps that investors are undecided about the company’s long-term prospects.