ITV and the BBC will launch BritBox, a jointly owned subscription streaming service, in the second half of 2019 as the broadcasters grapple with a viewing environment upended by the digital era.
The new service will be closely modelled on a US streaming platform owned by the two groups, which has more than 500,000 subscribers. Carolyn McCall, ITV’s chief executive said the new BritBox would be “distinctively British”, commissioning new and original British programming as well as streaming library programming from both broadcasters.
“We’re putting more money into British programming . . . it’s very good for British creative industries,” she said.
The advertising decline that hit ITV in the final months of 2018 has continued into this year with the UK’s largest commercial broadcaster blaming “economic and political uncertainty” for a projected 3-4 per cent drop in ad buying in the first quarter.
The UK media outlet said consumer goods groups, airlines and travel companies were reducing advertising spend to maintain margins while the struggles of the British high street had knocked spending by retailers.
Shares in ITV fell 3 per cent on Wednesday morning to 127p.
ITV plans to make a net investment of £25m in BritBox this year with an anticipated investment of £40m next year. “The majority of that is content and customer acquisition,” Dame Carolyn said, adding that BritBox would celebrate “the best of the past” and “the best of today”.
The two broadcasters were in the “concluding phase” of talks on the service. “We anticipate that other broadcasters will be added to BritBox and we will both speak to regulators and the wider industry about our proposals,” she added.
Tony Hall, director-general of the BBC, said the new offering would have “everything from old favourites to recent shows and brand new commissions”.
This tie-up comes a decade after an initial plan to launch a joint service, dubbed “Project Kangaroo”, was blocked by the Competition Commission. Since then, Netflix and Amazon have built large streaming operations with hundreds of millions of global subscribers and other companies, notably Walt Disney and AT&T, are poised to enter the market this year.
The new BritBox project has been driven by Dame Carolyn and Lord Hall, with their good personal relationship and shared vision for the streaming service overcoming decades of rivalry between the two UK broadcasters.
ITV, declined to provide subscriber targets or a cost for the new service, has made a concerted push to diversify its revenues, building a large production business, and an ad-free catch-up service — ITV Hub Plus — which has 265,000 subscribers.
ITV’s revenues for the full year rose 3 per cent to £3.21bn while non-advertising revenues were up 5 per cent to £1.97bn. Revenues at ITV Studios, the company’s production arm, increased 6 per cent to £1.67bn. Pre-tax profits rose from £500m to £567m.