Crozier delivers at ITV as increased production revenues boost profits

ITV Boss Adam Crozier has delivered some of what he has been promising with 2011 profits up 14 per cent to £327m on a not-quite-so-exciting revenue increase of four per cent to £2.1bn.

Hero of the hour is ITV Studios, now run by highly-paid former Channel 4 programme chief Kevin Lygo. Non-advertising revenue was up £93m to £922m with ITV Studios contributing £612m. External sales were £320m.

Online revenues from digital advertising and the ITV Player grew 21 per cent to £34m, decent enough but more evidence that ITV’s hopes that digital can match broadcast ad revenue one day are far-fetched.

TV ad revenue grew by just one per cent to £1.5bn but that follows a storming performance in 2010 when, helpfully, there was a World Cup. Banker shows like the X-Factor seem to be losing some of their appeal, creating a poser for ITV.

The obvious strategy is to make more big-rating shows in-house and ITV is banking on new series Mr Selfridge, based on the retail tycoon who founded the London store and written by celebrated TV dramatist Andrew Davies, to produce a Downton Abbey-style performance over its ten episodes. Unlike Downton, which is a co-production with NBC Universal, ITV will keep all the loot.

So it’s plain sailing now for Crozier, sales boss Fru Hazlitt and chairman Archie Norman?

Not quite as TV advertising is resolutely cyclical; Crozier admitted that sales growth had slipped back in the early part of 2012. Also ITV’s improved programme performance is bound to attract the attention of predators including Apple and Google who need content for their own developing internet TV businesses.

ITV is currently valued at just over £3bn. A bid would have to be £4.5bn or above to have any chance of success but Apple and Google could easily afford such a sum. Crozier and Norman, if they’re resistant to the idea of a bid, may have to get their cheque book out, first perhaps by buying STV or UTV Media or both.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.

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