Streaming profitability beckons, but owes much to the profitable services folded into companies’ DTC segments alongside the headline streamers.

There is a broader move towards bundling and price rises. The former bolsters subscriber additions and lifetime value but is ARPU-dilutive, while price rises will bump up both ARPU and churn.

2024 marks the first year with multiple players at scale in the ad space, as Prime Video entered the market. Other streamers with high CPMs and lower scale may be forced to re-examine their offerings.

As guided, ITV’s advertising performance was down 8% year-on-year (£1.8 billion), while Studios performed slightly better than expected (+4%, £2.2 billion): meaning that adjusted EBITA, while challenged (-32%, £489 million) could have been worse given the trials of H1

Unsurprisingly, ITV has announced an acceleration of its cost-cutting measures which intensifies an earlier hiring freeze: costs have risen 19% since before COVID, while revenues are only up 10%

ITVX continues its strong growth, and although we think that this needs to be contextualised, there are unintended but encouraging signs for the broadcaster

As viewing moves online, broadcasters’ on-demand players make up a growing proportion of viewing, becoming central to their future strategies.

However, even though SVOD viewing might have begun to plateau, BVOD growth cannot yet balance the decline of linear broadcast.

Of this shrinking pie, 2023 saw most of the major broadcast players increase their viewing shares.

Disney's bottom line results were flattered by a year-long cost cutting drive: the decline in linear entertainment revenue is accelerating and direct-to-consumer subscriber growth has temporarily stalled.

A new sports JV with Warner Bros. Discovery and Fox, along with other announcements are designed to grab attention in midst of turbulent shareholder rebellion.  Disney also—at last—unveiled a new games initiative with a $1.5 billion equity stake in Epic Games and a major immersive universe to attract younger audiences.

Disney's approach to the licensing of content to third parties is nuanced and so will be its effect on the perception of Disney+'s exclusivity.

ITV Studios (+9%, £1.52 billion) continues to prop up the company's advertising business (-7%, £1.23 billion)—which faces macro headwinds—helping external revenues for the first nine months of 2023 slightly upwards to £2.53 billion

Q4 is shaping up as a particularly difficult period for advertising with the lead up to Christmas potentially down by 15% YoY

ITVX continues to show growth; given that this is mostly a result of cannibalising ITV's linear audience, there is a ceiling on its potential

On 18 May 2023, Enders Analysis co-hosted the annual Media and Telecoms 2023 & Beyond Conference with Deloitte, sponsored by Barclays, Financial Times, and Salesforce.

With over 550 attendees and over 40 speakers from the TMT sector, including leading executives, policy leaders, and industry experts, the conference focused on how new technologies, regulation and infrastructure will impact the future of the industry.

This is the edited transcript of Session Three, covering: public service broadcasting and its path to a digital future. Videos of the presentations will be available on the conference website.

We forecast broadcaster viewing to shrink to below half of total video viewing by 2028 (48%)—down from 64% today—as streaming services gain share of long-form viewing time.

On the key advertising battleground of the TV set, broadcasters will still retain scale with a 63% viewing share by 2028, even as SVOD and YouTube double their impact.

Short-form video will continue to displace long-form as video-first apps (e.g. YouTube, Twitch, TikTok) gain further popularity and others (e.g. Facebook, Instagram) continue a relentless pivot to video. This will expand the amount of video watched and transition habits—even amongst older demographics.

ITV's total advertising revenue (TAR) in Q1 was down 10% year-on-year, which was marginally better than expected; Q2 is forecast to be down 12%. However, digital advertising has seen strong growth and now makes up 21% of TAR

ITVX is growing as it continues to offer more exclusive content. However, it is too early to tell whether growth is being driven by newer audiences or if it is just viewing that would have taken place on linear anyway

The publication of the draft Media Bill gives some certainty around the direction that the government will pursue in its update of the legal and regulatory framework for broadcasting. However, there remain a number of blanks left for Ofcom to interpret

Broadcaster decline accelerated in 2022, with record drops in reach and time spent. This was primarily driven by the lightest and youngest viewers leaving broadcast television while over-65s also reduced their viewing for the first time.

Loss of lighter viewers threatens the future viewing base of broadcasters and relevance to a new generation. Further, broadcaster status as the home of mass audiences becomes compromised.

However, retention of lighter viewers is not yet a lost cause. They are amongst the heaviest Netflix viewers, and the very lightest are spending more time in front of the TV set than previously—suggesting enduring appetite for TV-like content.

Structural shifts in the delivery of video are causing long-form viewing to coalesce around fewer programmes—this comes despite an explosion in the volume, spend and perceptual accessibility of content

For the time being this theoretically favours the largest of shows, along with the declining number of content providers that are able to create and distribute them at scale, forming critical masses of interest

Incoming technologies leveraging AI and virtual production will have the ability to drastically lower production costs. But until that happens the spend on most programming will become increasingly less efficient