ITV Pledges £75 Million To Its ‘Subscale’ Online Business

ITV’s half-year online sales rose from £10 million last year to £12 million this year. But ITV (LSE: ITV) says: “However, the online business remains subscale given the size of the online video market.”

It says a £75 million investment fund has been set aside “for operating investments online, in content and in our digital channels over the next three years”. Plus, “the strengthened balance sheet may provide some scope for capital investments”.

ITV has slimmed its website down in recent years and is focusing mainly on delivering on-demand and simulcast video, certainly as far as monetisation goes.

Video views have been booming thanks to the ITV Player section, but this half-year showed video views dip by 14 percent to 100 million, even though unique users rose four percent.

In earnings, ITV’s EBITDA is back up to £165 million, from last year’s £46 million; ad sales are up 18 percent.

But new CEO Adam Crozier is laying down a five-year growth plan, pledging to “re-shape the economics of ITV“…

“For the past decade ITV has not faced up to the challenges presented by the rise of internet-based platforms, the continuing growth of pay TV and subscription services and the globalisation of content.

“Over time, we expect to move to a position whereby half of ITV’s revenue base will be derived from non-television advertising sources.”

Step #1: ITV is shifting its ITV2, ITV3 and ITV4 TV channels to be pay-for, HD-only channels on Sky+HD only, starting this autumn.

It’s unclear if other pay-TV platforms like Virgin Media (NSDQ: VMED) or Top-Up TV will get a look-in.