ITV CEO McCall lays out global ambition and what’s next for ITVX
The Media Leader Interview
How hard is it for a traditional broadcaster to build a streaming service?
“It’s a really easy thing to say, it’s quite a hard thing to deliver,” ITV CEO Carolyn McCall told The Media Leader‘s editor-in-chief Omar Oakes at the Future of TV Advertising Global.
McCall described launching ITVX as from “a standing start” with a two-phase strategy dubbed internally as “More than TV”.
This focussed first on transforming ITV’s whole broadcast division, including augmenting its Studios division content, and understanding direct-to-consumer (which ITV had no experience of previously), and then secondly to move on to “supercharge streaming” and “optimise broadcast”.
‘ITV on steroids’
“If you come from that background of TV there is a mindset, there is a way of doing things,” she said.
It’s very TV centric, and I had to get people to see that we were no longer just TV that we had to be much more than TV to succeed and thrive in the future. And therefore we set out our stall to say we have got to be a digital player, but we had to build all of it.”
McCall said that when she started at ITV six years ago it was an analogue linear company and “everything revolved around that”, and ITV Hub was “not really a platform” but “a very basic catch-up service”.
The process and strategy to build ITV’s streaming service, ITVX, goes back several years, pre-dating the pandemic, and involved bringing in “quite a lot of capabilities” from data scientists, to building a tech stack.
McCall described ITVX, which launched last year, as “like ITV on steroids” and “an infinitely better” user experience than Hub which was “a real barrier to people coming in to the newer future side of ITV.”
ITVX future ‘will always be AVOD’
The service ow has 40 million registered users and has racked up 2.5 billion streams, she said. McCall revealed around 1.3-1.5 million are on the ad-free premium tier, and said she thought broadcasters “underestimate” direct-to-consumer subscription revenue as “an important profit stream” to have.
However, McCall stressed: “It’s not more important than AVOD [ad-funded video on demand]. I think AVOD is where our future business is always going to be.”
Recent updates to the ITVX platform include more personalisation and a rail of news with regional updates.
“The most pleasing thing for me is that we’re attracting more light viewers as a result of it,” McCall said, reeling off stats that monthly active users have gone up 20- 25%, light users were up 96% and 88% of people that cone to watch “big flagship shows” are staying to watch other things
“Those things matter as much as the big launch and the brand of ITVX,” she commented. “People see it as more contemporary more modern and much more usable. So that’s where we are today and there is still loads more to do.”
‘We will always be a national champion’
But how will ITVX stand out in a crowded marketplace of broadcasters, streamers and hybrids, Oakes asked, especially if it carries content from SVOD players?
“What we will always be is a national champion,” McCall insisted. “So ITV is UK in terms of viewers, but it has a very large global footprint because we’re in 13 countries around the world already with ITV Studios, and they make programmes for all of the streamers and broadcasters and cable and pay, so it’s really expanded that global footprint.
“We’re already in collaboration with broadcasters across Europe and I think we’ll do more of that with Planet V. I think the more important thing for us than is to have a really diversified business.”
ITV Studios revenue is higher than its advertising revenue, with high-profile successes including ITV Studios produced Squid Game: The Challenger top on Netflix at the moment.
She added: “Studios I think will continue to grow, it is a growth business so the market is growing at 1- 2% Even now. So that’s the most important thing, strategically five to be is to do everything we can on linear but to really really resource ITVX and make sure that is getting as much digital revenue as it can and to do partnerships across both and then to have a diversified studios business which is growing as well.”
Be forceful and loud about TV
A common thread at The Future of TV Advertising Global were speakers urging broadcasters to go after more performance or digital budgets amid declining linear viewership.
McCall said: “Totally honestly, we’re very realistic about linear TV. There is definitely a cyclical effect, so there is this cost-of-living and all that I’ve just described.
“There’s also structural effects. The skill is to really make sure that as a company you are getting the transition right to ITVX to IP and more.
“It’s big for audiences to be able to access you wherever they want, whenever they want, but you’ve got to make sure that transition is a very profitable transition.”
Unlike the BBC for example, ITV has to think about the commercial model al the time when making these kind of transitions, she added.
She also noted: “It’s an important transition. I believe there will always be for some time to come, if you look at the next eight to 10 years, mass reach through linear will still be an incredibly important thing to advertisers. But so will digital targeted advertising. It’s important for us that we take our place in that digital revenue bucket that marketers have to think about all the time.”
As for whether to go after digital spend, McCall urged the audience to be “much more forceful” and “loud” about TV’s outcomes.
McCall said she was afraid a lot of people in agencies were “loading up on digital” because it is what clients expected, since they associate it with performance, but it was not always working.
She explained: “If you talk to the agencies, they’ll say that’s not always effective, but we’re under pressure to do it. So we’ve got a job to do that I think as TV and not just TV as a digital kind of entity, to say you have got to look at this.
“We have to talk to clients about that because I’m not sure the agencies will do as much as they can but we have got to get to clients and look at the outcomes, how effective we can be by using targeted advertising, mass reach, product placement, creative partnerships.”