Although strategically vital, the value of online video still remains marginal compared to traditional television channels. ITV, the main commercial broadcaster in Britain, delivered a pre-tax profit of £398 million for 2011, up 24% on the previous year, on total revenues that increased just 4% at £2.14 billion. Only 1.6% of that total revenue was derived online. It works out at about six pence a week per online visitor.

“We’re now almost two years into our five-year transformation plan and our continued growth in revenue and profit — at a time when the advertising market is broadly flat — demonstrates that we’re performing in line with our strategic priorities,” said Adam Crozier, the chief executive of ITV.

“We have seen strong growth in online video views as ITV Player was rolled out across more platforms,” he said. “The VOD and pay deals we recently signed with Sky, Netflix and LoveFilm open up new pay revenue streams, which we will continue to build as part of our pay strategy.”

Whether online can be described as one of the “engines of growth” for ITV is questionable. Online revenues were up 21% to £34 million, compared to £28 million the previous year. It represents 1.6% of total ITV revenue.

That £34 million is revenue, not profit. It will cost a significant proportion of that to manage and operate the online services. It does not even begin to contribute to the cost of programme production. The total ITV programme budget is around a billion pounds a year.

One could see online distribution as incremental revenue, so long as it does not begin to eat into traditional television viewing. That is hardly a real risk at the moment, but ITV needs to continue to invest in online distribution in order to demonstrate to viewers and shareholders alike that it remains relevant.

The ITV Player is now available on Apple and Android devices, Freesat satellite receivers and PS3 game consoles. That contributed to a 44% increase in long-form video views across all platforms to 376 million over the previous year. That is “video views” not programmes, or hours of viewing. However, ITV reported 180 million long-from video views for the first six months of the year, so the increase in the second six months is relatively modest.

ITV did not report the number of unique online video viewers, but it reached up to 10.8 million unique users a month in the first half of the year. Online revenue therefore works out at about 6 pence per visitor per week. That includes display as well as any video advertising.

For comparison, informitv estimates the BBC iPlayer generated around 1-1.5 billion video views in the same period. Even these impressive figures are nothing compared to traditional television viewing, which in the United Kingdom last year amounted to around 85 billion hours.

ITV channels account for about 23% of viewing, with ITV1 and ITV+1 generating 15% of all viewing in the country. That is about 13 billion hours of ITV1 programming viewed, or in advertising terms a mind numbing 234 billion commercials viewed by adults. In all, ITV accounts for almost 40% of all commercials viewed on television in the United Kingdom.

The problem is that television net advertising revenue remains relatively flat, and the more channels there are, the smaller the share likely to be available to ITV.

ITV has belatedly been pursuing a pay-television strategy, which includes high definition channels on Sky and online programme deals with Sky, Netflix and LoveFilm. ITV plans to launch its own pay to view online video later in the year and is considering international options. It says that YouView, in which it is a shareholder, will “also launch in 2012”. That hardly raises expectations.

While ITV needs to invest more in new forms of distribution and advertising, and to generate additional revenue streams, traditional television remains a cash cow. It may not be the licence to print money it once was, but it still generated nearly £400 million in earnings on revenues of £1.8 billion.