ITVX: X marks the spot

It’s a marathon not a sprint for ITV, which saw its new streaming service ITVX get off to a steady start eight months on from launch.

“When running a streaming service there is no finishing line,” Rufus Radcliffe, MD, Streaming, Interactive & Data, ITV told IBC365.

“If someone had said this time last year ‘would you take where we are now?’ we’d have bitten their hand off. We’re really pleased so far but conscious that there’s always more to do to delight our viewers and our advertisers. We are far from resting on our laurels.”

The key metrics ITV looks to are monthly active users and streaming hours which, when compared to ITV Hub, are up 29% (to 12.5 million) and 33% (to 737 million) respectively for the first half of 2023 over H1 2022.

That includes some incremental distribution. The app is now on Sky Q and it is also ‘single illuminated’ on Virgin - the only place you can watch nonlinear content on Virgin Media now is through the app.

“Even if you strip that out the growth is really significant,” Radcliffe said. “Streaming is really competitive. Every night is a battle for eyeballs. We are really pleased with these numbers but we’ve spent a lot of time and focus on building capabilities to be a successful streaming service. The digital marketing capability we have now is far stronger than it has ever been before. Our ability to target very specific audiences using digital channels (via digital ad platform Planet V) and social media is also far better than ever.”

He hailed the launch of ITVX for the way content, product, marketing and distribution all united “in a cross functional” way.

ITV gave its digital and marketing teams a double challenge in the run up to launch that was not just to release the platform but to do so timed for a major live sports event - rife with technical pot holes.

“We knew the FIFA World Cup would guarantee awareness of ITVX but it was a fixed deadline and meant we had a very galvanising launch date,” Radcliffe said. “We hit those timings and fortunately we did it with a service that performed very well during the World Cup.

“When you’re running a streaming service in live sport the amount of people landing on the site at any one time is enormous so when England crashed out in the quarter finals we were getting over 2,500 starts a second and had 2.5 million concurrent streams but the service performed very well.”

He said they managed to launch ITVX onto 12,970 individual devices. “A crazy number but one that illustrates the complexity of the streaming landscape where every platform has a multitude of different devices within it.”

Its primary focus to date has been on the free ad funded streaming service that contains a 16,000 hour library. An additional 6,300 hours is in its SVOD tier.

“One of the big things we needed to do was establish the core proposition at launch. We had a hugely scaled up AVOD proposition that was free for users. ITV Hub was always conceived as a 30-day catch up service and we were quietly scaling up the number of hours on it over the course of 2022. Eighteen months ago, there were 1,500 hours on ITV Hub compared to 16,000 on ITVX today. So, across all genres and all types there is a lot more content on ITVX.”

This includes original drama that debuts first on the streaming service. Ambitious content like A Spy Among Friends, Nolly and The Twelve – “big ticket shows that put ITVX on the map as a content destination,” said Radcliffe.

“ITV Hub had a very ingrained viewer behaviour which was, if miss you a show you could catch it on the Hub. We wanted ITVX to be a place that when you switch on your TV or device you go there and discover what to watch. The exclusives have a brand value in terms of defining what the ITVX proposition is and they’ve also done big audience numbers.”

Box sets of drama will also land on ITVX after the first episode premiers on ITV1, such as crime drama Unforgotten, while there have been simulcasts of soccer and also reality show Love Island.

ITV calls this a transformational year. It is in the process of migrating everyone who currently subscribes to BritBox to the ITVX premium tier and will focus on growing its subscription service next year.

All of this has worked to drive awareness of ITVX as a brand and source of content to over 90 per cent, according to Radcliffe. In April, ITVX overtook Disney+ and All 4 as the UK’s fourth most considered streaming service, according to figures from YouGov’s BrandIndex.

The number of UK households with at least one SVOD fell in the first quarter of 2023 to 16.10 million versus 16.91m in 2022 and 16.95m in 2021. Yet, Kantar’s research showed that ITVX (and Apple TV+) bucked that trend by gaining the most number of new subscribers in the quarter.

The strong performance for ITVX helped drive a 24 per cent increase in digital advertising revenues at the broadcaster to £218m. Yet ITV’s total ad revenue dropped 11 per cent in the first half of the year to £811m as brands cut back spend.

“Clearly there’s a cost of living crisis and consumer confidence crisis,” Radcliffe said. “People act rationally and will look at what they are paying for. The price point for ITVX price is very competitive (£5.99 for premium service). We are not operating at the price point of some other streaming services.

“Another thing that differentiates us from the US streamers is that we are a British brand. We have a news feed as well as FAST and live and VOD all constantly evolving so that’s why we claim to be the freshest streaming service but always with a British sensibility that US streamers don’t have.”

Another focus will be on optimising the roster of FAST channels available on ITVX. Radcliff pointed out that the broadcaster has been expert at channels since 1955 and is keen to explore its next evolution.

“There is still quite a lot of additional work we’re doing on the FAST channel experience in terms of how do we best surface content on the homepage and how we merchandise it but the fact we can now present 20 channels on ITVX and we can optimise it according to what is working or what is not working is appealing to our viewers.”

It will take the next year or so to test, learn and iterate its FAST proposition. “We’ve got FAST channels., our main ITV1 and digital channels (ITV2, ITV3, ITV4) and we can reconfigure all of that in a FAST environment and test what works to maximise the audience.”

Expect more live streamed pop-up channels too. Water sport SailGP began streaming live on ITVX in June in the first standalone live sports commission for the service. This was a test for future events “which will accelerate moving forward,” said Radcliffe, including for Big Brother.

The reality show that began life at Channel 4 before being revised at Channel 5 in 2018 returns to screens in the autumn (produced by Initial) and will include a live feed exclusively on ITVX following the main show on ITV2.

The other big content moment is September’s Rugby World Cup the audience for which ITV hopes to convert to regular ITVX users. It will be broadcast live on ITV1 but with additional content and highlights as well as live streamed matches on ITVX.

“We are still giving people the mass reach experience on the linear channel but we’re then able to exploit that out on ITVX with a richer experience. There’s not a scenario where we’re putting big premium sports rights on ITVX exclusively. Our linear channel and ITVX will work in complementary way.”

That we are in the midst of the transition of ad spend away from linear broadcast and into streaming is clear.

“ITV is very ambitious about ITVX but it’s still early so it will be some time before we know whether it’s succeeded,” said Ed Barton, Research Director, Caretta. “ITVX (and Planet V) are ITV’s attempt to capture some of the spend instead of seeing it all go to big tech.”

Barton notes that linear TV is “stagnant and coalescing around the largest channels and shows” whereas he expects a few more years of rapid growth in spend on ad supported streaming.”

ITVX is currently selling around £180 million pa and they should be able to triple this by 2027.

“Generally, people know what content they’re prepared to pay for, and what they expect to get for free,” Barton said. “The quality and volume and what you can get for free in the UK is better than it’s ever been so I think it’s getting harder to convince people to pay for content. The current ‘death by 1000 subscriptions’ approach adopted by the streaming industry will sort itself out as the market shakes out services that don’t scale.”

Last month ITV CEO Carolyn McCall, expressed optimism that ITVX would help the broadcaster reach its goal of at least £750m of digital revenues by 2026.

To do this Barton said ITV must make ITVX the primary way of engaging with its audience and make shows everyone wants to watch and premiere them on ITVX – obvious strategies perhaps but not to simple to execute.

He also advises ITV to “hire ad tech developers, or work with a really good ad tech vendor, to stay at the leading edge of this fast-evolving segment.”

The line from ITV is that the free to air broadcaster offers brands the best of both worlds.

“We are the only place you can get these huge audiences for big entertainment shows and live sports and have amazing targeting capabilities,” Radcliffe said. “So, if you are an advertiser you can come to ITV and get both of those commercial propositions. The prerequisite to be able to offer multiple different advertising audiences is to have a really big audience every day and that is what we are able to do. ITV is only place in town where you can reach millions of people all on all in one go and be able to segment that audience.”