ITV has announced a new distribution and commercial partnership with YouTube, enabling viewers in the United Kingdom to watch popular ITV programming online through YouTube. The collaboration marks another step in the ITV strategy to broaden its digital reach and engage audiences beyond its traditional broadcast channels.

Programming will include not only shows seen on ITV but those produced by ITV Studios for the BBC, such as The Graham Norton Show.

The ITV commercial team will sell the full range of advertising opportunities around ITV and ITV Studios channels on YouTube.

ITV will be showcasing full episodes of the biggest shows across all genres from sport to entertainment, documentary and reality to daytime and news, including I’m A Celebrity, An Audience With Kylie, and the its soap opera serioal dramas.

Genre based channels including ITV News and ITV Sport will be developed alongside channels for ITV Daytime shows including This Morning and Loose Women and broader show specific offerings such as Love Island.

Zoo 55, the new digital label of ITV Studios, will manage ITV and ITV Studios YouTube presence.

In addition, ITV will be creating and developing clips, compilations and fan content around its most popular brands specially tailored for the YouTube audience.

Kevin Lygo, the managing director of ITV Media and Entertainment said: “This partnership is part of our continuing strategic approach to maximise reach and viewing opportunities for audiences, wherever they choose to watch, alongside the successful and thriving ITVX, and our market leading commercial TV channels.”

Kelly Williams, the managing director of ITV Commercial, added: “Working with YouTube provides our advertisers with even more ways to engage with audiences in premium brand-safe content from the nation’s best loved TV shows, with a wide selection of targeting options.”

The breakthrough seems to be that ITV will be selling its own advertising inventory, rather than handing it all over to Alphabet.

Alison Lomax, the managing director of YouTube in the United Kingdom and Ireland, said: “ITV is one of the UK’s most beloved TV broadcasters and is home to a hugely diverse range of content — from I’m A Celebrity to Bullseye. So we are thrilled to be strengthening our partnership, which will see hundreds of hours of programmes available on YouTube for the first time. Through full episodes, clips, compilations and brand-new fan content, audiences will be able to forge even deeper connections with the shows they love.”

Although it will no doubt be presented as complimentary to the ‘thriving’ ITVX, the online video app from ITV, the announcement appears to be a recognition that ITV needs to fish where the fish are, in the massive pool filled by YouTube, rather than the fishbowl that is ITVX.

Audience research suggests that in the first half of 2024 the average individual in the United Kingdom spent 38 minutes a day watching YouTube at home. Over a third of time spent watching YouTube at home is now on a television set, with those aged 25-35 watching YouTube on television for an average of 19 minutes a day.

In comparison, over 2023-2023, the average daily viewing of ITV on demand per person was under 4 minutes, compared to just under half an hour a day of watching ITV live or recorded.

The risk is that there are plenty more fish in the YouTube sea, and once viewers are drawn into watching ITV programmes there they might just keep scrolling and get hooked on something else.

www.itv.com
www.youtube.com

Warner Bros. Discovery will split its business into global linear networks and a separate streaming and studios division. It expects to complete the division of the business by the middle of 2025. Standby for more mergers and acquisitions, partnerships, and rebundling.

Warner Bros Discovery currently reports against separate segments of the business: studios, networks, and direct-to-consumer.

Under the new structure, the company will hive off the traditional linear networks and bring together the studios business with the online video platforms.

Global Linear Networks will include the traditional television networks providing news, sports, scripted and unscripted programming. That includes brands like CNN, TNT Sports, Eurosport, HBO, and Discovery Channel. It is charged with “maximizing profitability and free cash flow to continue deleveraging”. In other words, pay down its debt burden by milking the cash cow while it can.

Streaming and Studios will provide a globally scaled online video platform that currently includes HBO, Max, and Discovery+, and will include the entertainment studios, led by the Warner Bros brand, and their intellectual properties. It will focus on “driving growth and strong returns on increasing invested capital”.

The new corporate structure will also “increase optionality to pursue further value creation opportunities for both divisions in an evolving media landscape”.

“Since the combination that created Warner Bros. Discovery, we have transformed our business and improved our financial position while providing world class entertainment to global audiences,” said David Zaslav, its chief executive.

“Our new corporate structure better aligns our organization and enhances our flexibility with potential future strategic opportunities across an evolving media landscape, help us build on our momentum and create opportunities as we evaluate all avenues to deliver significant shareholder value.”

Currently, may appear to be a change in accounting policy, but it looks like something more substantial may be expected.

No less than three firms of financial advisers are involved in the announcement: J.P. Morgan, Evercore, and Guggenheim Securities.

Analysts suggest that it could unlock enterprise value by freeing a growing online business from billions of dollars of debt.

Warner Bros. Discovery was supposed to create scale and value by combining WarnerMedia networks like HBO and CNN with the Discovery properties. Its stock has sunk to about a third of its value since its creation in 2022. In August, WBD wrote down $9 billion off the value of its television assets. However, the markets appear to appreciate the latest announcement, with the share price up by about 15%.

Comcast last month announced plans to spin off several of its television networks, including MSNBC, USA, CNBC, Oxygen, and Syfy, into a standalone company.

Both WBD and Comcast are responding to the decline of traditional cable television and the apparent opportunities of online video. By separating their linear and online operations, they can position themselves for potential mergers, acquisitions, or spinoffs in the future. They may anticipate a regulatory environment that may be more conducive to mergers and acquisitions under the next government administration.

www.wbd.com

DAZN, which aims to be the Netflix of sport, may be seeking to gain a significant stake in the Foxtel business in Australia, after News Corp put its majority share of the company up for sale. Shay Segev, the chief executive of DAZN, is reported to have been in Australia, where he met both Rupert and Lachlan Murdoch. He is also reported to have met with Telstra. Meanwhile, Foxtel chief executive Patrick Delany has apparently been meeting Sky in London. If the deal proceeds, it could be a game changer in Australia.

DAZN, backed by the British-Ukrainian multi-billionaire Len Blavatnik, is based in London. A deal with News Corp could see it acquiring sports rights and an existing subscriber base in Australia to extend its global distribution.

DAZN may be particularly interested in Kayo Sports, the sports streaming service launched by Foxtel to some success in 2018. It is owned by Hubbl, formerly known as Streamotion, which is a wholly owned subsidiary of the Foxtel Group.

Foxtel is 65% owned by News Corp Australia, with the remainder owned by Telstra. News Corp effectively put its stake in Foxtel, which has debt of around $1.2 billion, up for sale in August.

DAZN has acquired international rights to a range of sports, including the NFL, NBA, and several football leagues, including the English Premier League and the UEFA Champions League.

In addition to its direct-to-consumer app, DAZN has distribution agreements with leading pay television and telco providers in many markets. For instance, the app is now available on Sky platform sin the United Kingdom and Republic of Ireland.

DAZN is reported to have 20 million subscribers, with a significant presence in Europe, and operates worldwide. The company reports revenues of $3.2 billion in 2023 and projects revenues of $3.5 billion in 2024, although in previous years it has reported annual operating losses of over a billion dollars.

Foxtel has 4.69 million paid subscribers in Australia. Of these, 1.2 million are residential subscribers for its television services. Kayo Sports has 1.55 million subscribers, and the entertainment service BINGE has 1.53 million.

Telstra, which is a minority shareholder in Foxtel, recently acquired majority control of Fetch TV to replace its own Telstra TV offering. Fetch TV was planning to include the DAZN app on its platform.

One possibility is that rival telco Optus could merge its Sports app in some way with DAZN, putting further pressure on Telstra.

Australian anti-siphoning laws prevent pay television providers from acquiring exclusive rights to specific sporting events such as cricket, golf, tennis and the football codes, together with the Olympic and Commonwealth Games, before free-to-air broadcasters have had the opportunity to bid for them. In July, the Australian government extended the scope to include online video online platforms.

DAZN recently announced that it would be the exclusive global provider of coverage of the new FIFA Club World Cup 2025, in which 32 clubs compete in 12 venues across the United States to become FIFA Club World Champions. Under a $1 billion deal with FIFA, DAZN will offer all matches online for free, with possible sublicensing to local free-to-air broadcasters.

www.dazngroup.com
www.foxtel.com.au