ITV chief executive Adam Crozier has admitted that the broadcaster “didn’t get everything right” in its schedules in 2014, and said it had taken action to halt falling viewing figures.
Speaking on a call with journalists after the publication of 2014 results showing a 23% rise in pre-tax profits, Crozier pointed to the additional £20m the broadcaster is investing in programming, including new dramas.
Crozier said: “On screen largely last year we lost out to the BBC who’ve been outspending everyone. We didn’t get everything right on our own schedule and we’ve put a lot of work into improving that.
“Our digital channels were down last year for the first time in many years, but if you look at their performance in the first half of the year, they were down 10%, if you look at the second half of the year they were down 2% and year to date they are up 4%.”
“I think we’ve gradually turned those back round, and on the main channel we are still a little down, but that it takes a little bit longer to fix because the things we are going to fix that with are a little more high investment, they take longer to come through.”
Crozier said the channel would be investing an additional £20m in programming in 2015, taking total spend to £1.04bn, having upped spend by £35m last year.
He added: “When we look at the schedule going forward, with the amount of extremely high quality drama coming into the schedule, the Rugby World Cup and a number of big entertainment shows we can be reasonably confident we can move that forwards.”
The group’s share of viewing fell 5% in 2014, compared with a 4% rise in 2013, largely due to a weaker performance from its main ITV1 channel.
ITV’s advertising revenue rose 6% in 2014, and is forecast to be up 11% in the first quarter, and up 4% to 7% in April.
Crozier said this was due to the broadcaster’s ability to deliver the mass audiences advertisers want, despite falling viewing share and increased fragmentation.
He added: “What is right at the heart of the commercial proposition we do is unrivalled ability to reach those mass audiences. We have 99.4% of all commercial programmes delivering an audience of more than 5 million, we have 95% of all commercial programmes delivering an audience of more than 3 million.
“That is what the major brands want is the ability to reach large numbers of people over short periods, and that is what we sell ourselves on. As the media world has become more fragmented and it becomes harder to reach big audiences, ITV becomes the antidote to that fragmentation.”
Crozier hailed the profitability of the broadcaster’s online pay and free to watch services, which he said delivered £33m profits on £35m revenues.
“Online is very profitable for us, online pay and interactive together,” he said. “Our CPMs are roughly five times what we charge for linear TV because it’s a more exclusive product where we carry less advertising.”
Crozier said that while ITV “remains very interested in sports”, Premier League football rights were now out of reach for terrestrial broadcasters.
“If you look at the Premier league, that’s at a level of bidding now where that is beyond any terrestrial broadcaster,” he added.
“I saw the incredible number the other day where with the number of premier league matches, their share of viewing is 0.6% of total viewing in the UK, but accounts for 17% of the programme spend. That will rise to 25% with the new deal.
“That’s something no terrestrial broadcaster could ever afford. The Premier League is beyond us, but beyond that most of the other competitions we should be able to compete more and we will.”
He said ITV’s decision not to compete for the highlights rights used by the BBC for Match of the Day was a “purely commercial decision” based on the difficulty of generating ad revenue at the time of day the package has to be broadcast.
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