ITV, led by CEO Carolyn McCall, announced a decrease in advertising revenue alongside a 4 percent increase in ITV Studios revenue in its first-quarter 2026 update, while confirming ongoing discussions with Sky about a potential media business sale.
Active Discussions With Sky
Since November 2025, ITV has been engaged in negotiations with Sky regarding the sale of its media and entertainment business, which includes ITV's commercial free-to-air TV channels in the U.K. and the ITVX streaming platform. According to ITV, "We will update the market in due course." If a deal proceeds, ITV Studios will continue as an independent entity.
Revenue Performance
During the first quarter, ITV Studios experienced a 4 percent revenue rise, while media and entertainment revenue fell by 2 percent, leading to a total advertising revenue decrease of 1.5 percent. ITV previously forecasted good overall growth for ITV Studios in 2026, driven by external revenue, with expectations for revenue, margins, and profits to be more substantial in the year's latter half, owing to the timing of scripted content deliveries and high-margin licensing deals.
Digital and Internal Revenue Insights
The studio's first-quarter growth was fueled by an 8 percent increase in external revenue, particularly from deliveries to global streaming platforms. Notable projects included "Skyscraper Live" for Netflix, "Rivals" season 2 for Disney+, and "Love Island U.S.: Beyond the Villa" season 2 for Peacock. Internal revenue, however, declined by 7 percent due to fewer soaps and daytime content, aligning with earlier strategic scheduling and production changes.
Advertising Outlook and Digital Growth
ITV expects a 10 percent increase in total advertising revenue during the second quarter, attributed to high advertiser demand surrounding the men's soccer World Cup. Despite geopolitical challenges, ITV remains focused on its controllable factors, anticipating solid revenue growth in ITV Studios and robust digital growth in media and entertainment this year.
Additional Q1 figures from ITV highlighted a 12 percent growth in digital revenue, which nearly compensated for linear advertising revenue declines. Digital advertising revenue jumped 14 percent, with ITVX streaming hours up 13 percent, thanks to popular content like the drama "Gone," "Love Island: All Stars," and the Six Nations rugby championship. However, non-advertising revenue in media and entertainment declined by 8 percent, meeting ITV's projections.
Carolyn McCall concluded, "Our strategic priorities of expanding ITV Studios and supercharging our digital media & entertainment business continue to deliver clear and positive results."
Source: https://www.hollywoodreporter.com/business/business-news/itv-q1-earnings-report-ad-revenue-studios-sky-deal-talks-1236592752/
