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ITV CEO on Planned U.K. Ban on Junk Food TV Ads for Children: “We’re Going to Have to Mitigate It”

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U.K. TV giant ITV got only 45 percent of its total revenue from non-advertising sources in 2016, while this year it will get 60 percent from production and digital businesses, CEO Carolyn McCall told an industry conference in London on Tuesday. And her team is “pretty confident” that these growth businesses will account for about two-thirds of total company revenue in 2026.

Speaking during a keynote interview at the Royal Television Society’s (RTS) London Convention 2024, she also discussed ITV’s digital transformation, including its advertising-focused ITVX streaming service, how the streaming business is integrated with its linear networks, the growth of its production arm ITV Studios, which has continued to build via acquisitions, and why her team invests in such shows as Mr Bates vs The Post Office.

“We are getting more frequency,” and “the dwell time has gone up,” she said about the encouraging usage and engagement trends at ITVX, McCall said.

She also agreed with Channel 4 CEO Alex Mahon that digital eyeballs are worth more than linear eyeballs, emphasizing a higher cost per thousand impressions because “you pay more for that very personalized targeting.” However, the ITV boss also highlighted: “But there’s no substitute for the volume of money” you get for one big event that draws 15 or 20 or 22 million people watching at the same time.”

But things turned more contentious when McCall was asked about the Labour Party’s government’s plan to go ahead with a plan devised by Boris Johnson’s former Conservative Party government to ban junk food ads on TV before 9 p.m. to fight childhood obesity. “95 percent of adults watch ITV, 95 percent of kids are on YouTube,” she said in questioning the effectiveness of the plan. “Kids 16 to 25 are not on TV much. … We’ve done loads of research to say this is not going to make a dent in obesity, but it is a political thing, and so we’re going to have to mitigate it in any way we can.”

What’s the financial impact on ITV? “We haven’t put a number on it,” the CEO said. “But it’s millions and millions, so we’re going to have to look at what we can do to mitigate that, and that comes in at the end of next year.” The ITV boss concluded: “We’ll find our way through it.”

In March, ITV unveiled a new strategic restructuring and efficiency program “to reshape the cost base, enhance profitability, and support the growth drivers of Studios and streaming.” By the end of 2024, the firm expects the program to have delivered incremental annualized gross savings of at least £50 million ($64 million) per year.

The company recently forecast that ITV Studios’ full year 2024 was expected “to deliver record profits driven by an increase in higher-margin catalog sales and continued action to drive efficiencies,” but annual revenue will drop slightly, impacted by the 2023 Hollywood writers and actors strike, which will delay around £80 million ($103 million) of revenue from 2024 to 2025, as well as “lower demand from free-to-air broadcasters in Europe in the short term.”

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