ITV PLC (LON:ITV) is restructuring its broadcast division and reducing London office space as it reacts to changing viewing habits and more flexible working.
The FTSE 250-listed group said it has created a new division called ‘Media and Entertainment’ that will incorporate its Broadcast and On-Demand arms, separate from its Studios production business.
Broadcast will centre on its output in ‘linear’ TV, such as its ITV, ITV2 etc, with On-Demand focused on growing its digital footprint by providing new content targeted at on-demand audiences and will include the ITV Hub website and app and its BritBox joint venture with the BBC.
Numbers of registered users of the free ITV Hub online streaming service topped 30mln last year, helping it pass 500mln hours of streaming for 2019. BritBox has accumulated more than 1mln paying subscribers since its launch three years ago.
ITV said the move will clearly align the company’s resources and investments to “the two main ways of viewing” and cut costs, with the restructuring process having already started and expected to be complete by the end of March 2021.
To grow the online offering, the company said it will “provide new content that appeals to audiences who already do most or all of their viewing on demand”.
Already on the rise in recent years as the likes of Neflix and Amazon Prime invest billions in producing new content for on-demand viewing, streaming demand has accelerated further during the lockdowns of 2020, which have also seen cinemas closed across the world.
The group said its plans to reduce London office space reflected “changing needs in the context of its digital transformation and the move towards more flexible working”, with a time frame “over the coming years”.
Chief executive Carolyn McCall said the new division “will enable ITV to continue to deliver mass, live audiences while investing in the future to create the sort of content and viewing experience that younger, and other harder to reach viewers want”.
With most ITV shows, from Love Island to X-Factor to Coronation Street, still watched live and expected to continue to attract brand advertising, she said, “linear channels will be around and be profitable for many years but we also need an on-demand business which will increasingly be the focus of our new investments in content and technology and which will be our growth engine attracting younger and more targeted audiences to ITV.”
Analysts at Shore Capital said they “welcome any changes aimed at sharpening ITV’s digital focus – a key performance driver going forward”.
Streaming giant Netflix Inc (NASDAQ:NFLX), which has over 13mln subscribers in the UK, will be in focus later with the posting of its third-quarter results, where the company has guided to 2.5mln global net subscriber additions, revenues of US$6.3bn and operating profit of US$1.25bn.
Also under the spotlight will be the group's new content pipeline, which has been held up by the pandemic restrictions on travel and social distancing.