National broadcaster ITV has announced that it is extending the deadline for its online business to achieve annual revenues of £150 million as the company announced a drop in profits by 28 per cent a predicted a difficult immediate future for the network.
ITV said its online business now has an extra two years to achieve its target of £150m annual revenues, the target is now aiming for 2012; the previous target was 2010. The broadcaster said the extension was required due to regulatory delays imposed on the Kangaroo online broadcasting technology service that it developed in conjunction with the BBC. ITV said, “We expect to meet the revised online target without relying on substantial acquisitions.”
Profits at ITV for the first half of 2008 fell by 28 per cent. Net advertising revenue (NAR) increased by just one per cent for the ITV group, which it dubs the ITV family. Online revenue increased by six per cent.
The mid-term future doesn’t look good for the broadcaster either, with NAR for the eight months to August down by one per cent year-on-year and that September’s NAR will be down by 20 per cent.
The ITV business is under-going a wide ranging cost savings drive and announced a new target of achieving £35m by the end of 2010 and is on target, it said, to achieve savings of £41m by the end of 2008 and £40m by the end of 2009. “We are implementing a new cost efficiency plan which will deliver £35m in additional annual savings by the end of 2010,” said Michael Grade, the ITV executive chairman and former chairman of the BBC.
“Almost a year into the Turnaround Strategy, we have made considerable operational progress,” Grade said. “Our Global Content business is growing strongly and our presence online is strengthening, notwithstanding the delay in launching Kangaroo.”
Earlier this year technology and search giant Google overtook ITV in advertising revenues. Grade is pressuring the government to release it from regulations put in place to ensure quality British products are broadcast by ITV so that it can reduce costs by importing productions from overseas.