28 ITV plc Annual Report and Accounts 2023 ITV plc Annual Report and Accounts 2023 29 S OPERATING AND FINANCIAL PERFORMANCE REVIEW CONTINUED T R A T E G I Product: Throughout 2023, we have Optimise Broadcast largely offset the decline in linear viewing, Strong linear and online C R implemented a series of enhancements to however November and December 2023 E advertising proposition P improve ITVX’s product and user experience. were impacted by the strong viewing O While the advertising market is getting more R This included the integration of deeper Continuing to deliver comparatives of the FIFA World Cup in 2022. competitive, ITV is in a good position to be T personalisation in Q4, driving content unrivalled audiences with Total broadcaster viewing (broadcaster recommendations specific to users. We have high-quality programming viewing across all devices) declined by able to compete for advertising in a long- started to see positive results with an uplift 3% in the year and total broadcaster and term growing advertising market with its in MAUs and streaming hours, and an Within our Broadcast business, we operate subscription streaming service viewing unique combination of mass simultaneous increase in repeat visits by lighter users, who the largest family of free-to-air commercial (viewing of all broadcaster and subscription reach, targeted advertising and commercial are harder to reach and a key target for us to television channels in the UK. These streaming servicecontent across all devices) and creative partnerships. ITV has deep attract to the service. In addition, ITVX Kids channels provide unparalleled audience declined by 1% (Source: ITV, BARB). relationships with agencies and advertisers; launched in the second half of 2023 as a fully scale and reach, as well as targeted brand-safe and measured advertising and a digital experience; and over 90% of our demographics demanded by advertisers. Despite the challenging linear viewing strong track record of commissioning and content on ITVX is now subtitled. Despite the growth in streaming viewing, landscape, our share of the top 1,000 producing content which appeals to UK linear TV remains important for both our commercial broadcast TV programmes was audiences. In the first half of 2024, we will continue to viewers and advertisers.91% in 2023 (2022: 93%) and our share of 3 Mass simultaneous reach integrate personalisation across the user To optimise Broadcast and maintain our USP commercial viewing was 32.6% (2022: experience and utilise it as a driver for 33.8%) and we continue to have the largest Television continues to be a highly effective marketing. We will further monetise our of delivering mass audiences for advertisers, share of commercial viewing versus our and efficient medium for advertisers to inventory, by introducing features such as I’M A CELEBRITY…GET ME OUT we will continue to invest in live content, such commercial competitors. Content such achieve mass scale and reach. As the viewing Pause Ads, which seamlessly play ads when OF HERE! returned in 2023 for its as sports and large entertainment shows, as as I’m A Celebrity…Get Me Out Of Here!, and advertising landscape becomes more 23rd series in the UK. It was the well as dramas, factual and news. In total ITV a user pauses content, and roll-out new ways year’s most-watched programme Love Island, Unforgotten, The Bay and the fragmented, the scale and reach provided by for clients to sponsor collections of content for 16-34s on any channel.invests over £1.2 billion annually in our Rugby World Cup, all contributed to our television, and particularly ITV, becomes across the service. We will also be content budget across all our linear TV viewing KPIs remaining ahead of our even more valuable to advertisers. With UNFORGOTTEN is a UK crime channels and ITVX in order to drive these introducing subtitles on adverts, something drama. It returned for its fifth 2026 targets, in the year. global steaming platforms entering the that is extremely important to our series in 2023 with the final mass audiences on our linear TV channels, advertising market and introducing ad- advertising clients.episode being the most-watched and live and on demand viewing on ITVX. We have an exciting schedule for 2024 to supported tiers to their subscription plans, programme on ITVX. ITV’s USP as the largest commercial public Over the last few years, linear TV audiences keep our audiences informed and Distribution: The integration of ITVX into entertained. This includes entertainment service broadcaster in the UK remains third-party platforms substantially in the UK have gradually declined with shows Celebrity Big Brother and Wheel of incredibly important. The advertising and increased in 2023, with over 40 new ways audiences spending an increasing amount Fortune, new dramas Breathtaking, viewing proposition ITV provides to clients is for a user to access the service. We have of time on streaming platforms, both Protection and Ruth Ellis, along with sporting unparalleled, and something that no improved the discoverability of ITVX on ad-funded and paid. In 2023, total ITV events including UEFA Euros and both men’s streamer can match. third-party platforms which has helped viewing (which includes viewing of all ITV and women’s international football qualifiers. drive bigger audiences to our content and content, across all devices) was down 5% to Targeted advertising – Planet V the service is now available in almost 100% 13.1 billion hours. For the first ten months of the year, the growth of ITV’s digital viewing Planet V is ITV’s wholly-owned, scaled of UK households. programmatic addressable advertising platform with an intuitive self-service The introduction of ITVX on Sky Q in Q1 2023, interface that allows agencies and combined with stronger partnerships with THE FIFA WOMEN’S WORLD CUP took place in July 2023 with the tournament advertisers to seamlessly and cost- both Sky and Virgin has resulted in streamed, reaching 22 million viewers and having over 16 million streams on ITVX. effectively buy highly targeted video on demand viewing with targeted advertising, Marketing: Our marketing strategy following ITVX Premium offers users the opportunity advertising on ITVX. Planet V is the replacing viewing recorded by users which ITVX’s launch has been focused on driving to enjoy all ITVX programming ad-free plus second-largest programmatic video cannot be monetised. We can now deliver awareness, consideration and viewing to the exclusive content and access to BritBox UK advertising platform in the UK after Google targeted advertising across all our channels service to support the delivery of our KPIs. (content from the ITV and BBC libraries). and utilises ITV’s extensive data assets and on mobile and web, enabling better We have seen awareness for both adults and Although the main focus of ITVX’s launch has capabilities to provide compelling advertising monetisation opportunities across light viewers grow strongly and our been to promote the ad-funded service, we products for advertisers. ITVX has over these platforms. campaigns have helped contribute to the have improved the premium offering by 40 million registered users, giving ITV and its increase in MAUs and streaming hours incorporating additional content from our advertisers one of the largest first party data In 2024, ITVX will roll-out on PlayStation 4 during the year. partnership with StudioCanal and worked sets in the UK. Being wholly owned ensures and 5. We will further improve the with third-party platforms to enable greater that all the returns generated by the platform discoverability of ITVX on third-party Marketing is an important tool to continue to prominence on device interfaces. We are go directly to ITV without any value leakage platforms through creating additional links attract users and viewing on ITVX, and also now simplifying our viewer proposition for through third-party commissions. that bring users directly into ITVX on our linear TV channels. We see an ITVX Premium and taking ownership of the programmes from the main screens of their opportunity to adopt a more responsive relationship with the subscribers. As a result, The platform is used by over 2,000 users in devices. The launch of Freely, the new TV approach helping highlight popular programs in 2023, UK streaming subscriptions declined the UK and offers agencies and advertisers streaming service which combines live TV to commercial valuable audiences. The marginally to 1.3 million (2022: 1.4 million) as access to over 20,000 data-targeting options and catch up of the FTA broadcasters will 4 opportunity and returns from this area are we transitioned users from our standalone to create sophisticated audience segments. also help make ITV, along with the other very attractive. In 2024 we will increase our app, BritBox UK, to ITVX Premium, combined They can also incorporate their own PSB’s, more accessible. All of this will further marketing spend by £15 million to drive both with the closure of the Amazon ITV catch up first-party data in a GDPR-compliant expand our distribution footprint, making our streaming and linear viewing. This will include channel. environment using InfoSum (an identity content more widely available. investing in data and on the prominence of infrastructure provider) and monitor their our content on third-party platforms; In addition, in 2024 the BritBox UK service on campaigns through a custom-built user campaigns to engage more 25-54 year-old Amazon Prime Video Channels and the interface. Advertisers are prepared to pay light viewers – who are highly valuable to BritBox UK standalone app will also close as more for this increasingly sophisticated and advertisers – showcasing the breadth and we further simplify our offering. This will valuable ad inventory. depth of our quality content; along with consolidate all our subscribers under one continuous focus on measurement and ITVX Premium brand, and will give us optimisation of our investment. We will complete ownership of the subscriber base. continue to evaluate content and marketing The closure of these services is expected to 3. ITV’s share of viewing as a proportion of all commercial ROI and adjust as necessary.impact subscriber numbers and subscription ad-funded channels in the UK revenues in 2024. 4. The accuracy of our Video-On-Demand audience data has been subject to independent verification by PwC.