ITV news: share price as production arm hit with 16% earnings drop amid US writers' strike fallout

Broadcaster ITV has revealed a 16% decline in its production arm’s earnings, which were impacted by the US writers' and actors' strike that occurred last year.

Revenue dropped to £382 million in the three months to 31 March from £457 million in the same period last year, said ITV Studios, the group behind the popular shows Mr. Bates Vs. The Post Office and Love Island.

The 2023 strike action, which was among the longest in the history of the entertainment industry, caused productions to stop, sending shockwaves through Hollywood and the world.

ITV issued a statement warning that it expects further a decline in Studios' earnings during the second quarter of the year. It had previously warned that the strikes would delay around £80 million of revenues from 2024 into 2025.

But it said in its latest update that it expects ITV Studios revenues to be “broadly flat” overall in 2024.

Join the thousands of people who’ve signed up for a National World newsletter

The division is also being impacted by “weaker demand from free-to-air broadcasters in Europe who have been holding back spending until they see more certainty in the advertising market”, according to ITV.

The group saw total advertising revenues rise 3% in the first quarter and said it is expecting a jump of around 12% in the second quarter – up about 8% overall in the half-year to 30 June – with the upcoming Euros football tournament set to help drive ad demand.

The ad boost was offset by the production business woes, with total revenues down 7% at £887 million in the first quarter. Carolyn McCall, ITV chief executive, said: “Over the full year, we expect ITV Studios revenues to be broadly flat.

“We have a strong pipeline of programmes, good demand for our quality content as we increasingly diversify our customer base towards streamers and the phasing of deliveries is heavily weighted to the second half of the year, including Hell’s Kitchen USA, The Better Sister, A.C.A.B, Showtrial and Ludwig.”

She added: “Our group cost savings programmes are on course to deliver £40 million of savings this year as previously guided.”

Its trading update also showed further growth at its streaming platform ITVX, with total streaming hours up 16% and digital revenues rising by 11% in the first quarter. Shares in the firm lifted 2% on Thursday morning.

Russ Mould, investment director at AJ Bell, said: “Facing a structural decline in traditional TV viewership and advertising, ITV is diversified in two areas.

“One of these – streaming and digital advertising – contributed strongly to its first-quarter performance, but the other – the ITV Studios production arm – detracted.

“Given this was largely thanks to an event which was completely outside of ITV’s control – the long-running US writers’ strike which eventually concluded last autumn – it is understandable that it is being given the benefit of the doubt by investors.”