20 ITV plc Annual Report and Accounts 2023 ITV plc Annual Report and Accounts 2023 21 S OPERATING AND FINANCIAL PERFORMANCE REVIEW CONTINUED T R A T E G I ITV Studios benefits from scale, being the Over the last six years ITV Studios revenue Growing our C R largest producer in the UK, one of the (excluding acquisitions) has grown by around E P largest unscripted producers in the US and 5% CAGR, faster than the market of around O scripted business R one of the top three in the majority of the 4% CAGR (Source: Ampere Analysis – based T remaining international markets in which it on the ITVS addressable market). Growing our scripted business is operates. ITV Studios is a trusted supplier ITV with well established relationships with ITV Studios’ ambition is to be a leading force one of our key strategic priorities key content buyers and leading creative in the creation and ownership of intellectual Scripted content plays a key role in attracting talent in those markets; and with a property (IP), global content production and and retaining viewers and subscribers on combined content library of over 90,000 distribution. We are achieving this by both FTA and streaming platforms. This hours, it is also one of the pre-eminent focusing on our four strategic priorities to together with the increase in the number of global distributors. drive revenue and profit growth: streaming platforms has led to an increase in original scripted commissions in the UK, US, STUDIOS The global content market is large, (c.$226 1. Growing our scripted business to meet the Australia and Europe. Furthermore, over billion in 2023) and attractive with all growth in global demand recent years there has been increasing platforms needing a mix of content to 2. Growing our global formats business to demand for locally produced non-English succeed in a very competitive market. Going maximise the monetisation of high-value language scripted content. With our global forward, we expect to see growth in the key formats production presence and a strong track segments in which ITV Studios operates, 3. Diversifying our customer base to capture record for delivering high-quality scripted including content licensing and demand from the growth in content spend from local content, ITV Studios is well-positioned to streaming platforms for unscripted content and global streaming platforms cater to this demand, and importantly grow and cost effective premium scripted content its share of the market. which we are well positioned to take 4. All of which is underpinned by our ability to advantage of. We are confident that we will attract and retain leading creative talent. ITV has a portfolio of scripted labels in the continue to grow our market share to 2026 UK and internationally, which creates and driven by our scale; our diversification by We have KPI targets for 2026 which reflect produces high-quality content with global customer; geography and genre; a strong the key drivers of growth and value. See the appeal for both FTA and streaming track record of high-quality content; a very Strategy section within the CEO Report for platforms. We continue to see good strong slate for 2024 and beyond; and our more details on our KPIs, why they are momentum in our creative pipeline with leading creative talent. important and how they will enable us to several of our 2023 deliveries, such as Mr deliver total organic revenue growth of 5% on Bates vs The Post Office, Fool Me Once and average per annum over the five years from One Piece gaining global attention and 2021 to 2026 – ahead of the market, at an driving significant audiences on their adjusted EBITA margin of 13% to 15%. respective platforms. In 2023, ITV Studios high‑end scripted hours increased by 14% FOOL ME ONCE is a thriller made by Quay Street Productions year‑on‑year to 316 hours (an ITV Studios label) for Netflix. It is one of Netflix’s all-time top ten English language dramas. Image courtesy of Netflix. (2022: 276 hours) and we remain on track to produce 400 hours of high‑end scripted content per annum by 2026. ITV Studios is a scaled and global creator, owner and distributor Global Partnerships (previously Global of high-quality TV content operating in 13 countries and across Formats and Distribution) plays a key role in 60+ labels; diversified by genre, geography and customer in the growing scripted value across the business. Global Partnerships invests around £70 key creative markets around the world. million annually to acquire the distribution rights (across both scripted and unscripted genres) in ITV Studios-produced content and selective third-party content. Having the integrated producer-distributor relationship enables Global Partnerships to make strategic investment decisions around content funding. By finding co-production partners and licensees around the world for our scripted catalogue (of more than 22,000 ONE PIECE is based on a hours), Global Partnerships maximises the Japanese manga series and value of these projects over a long-term produced by Tomorrow Studios in the US (a partnership with sales lifecycle. ITV Studios) for Netflix. It has been recommissioned for a second season. Image courtesy of Netflix.