It was hard to miss the media news last week that ITV announced a new service coming to our screens later this year: ITVX.   

In today’s mailer, we wanted to set out what we know so far about this significant development to the UK VOD market – and some potential implications. 

Happy reading! 

So what exactly has happened? 

ITV made this press release about its new VOD service, ITVX. The service is said to be “the UK’s first” integrated advertising and subscription funded streaming platform in the UK; viewers will be able to either access for free, with adverts – or ad-free (with access to extra content) via a subscription.  

Other noteworthy features and details we know about the service so far:  

  • Bingeing on ITV’s drama and comedy commissions: content will be made available in one go on ITVX, as soon as the first episode has aired on ITV’s linear channels. 
  • Exclusive content that can only be watched on ITVX: some titles will be available 6 or even 9 months before they hit linear TV. 
  • Britbox: If viewers opt for the SVOD tier, they’ll gain access to Britbox and all its associated content from ITV, BBC, Channel 4 and Channel 5. (ITV has actually bought out BBC’s share in Britbox UK in order to give greater control over its integration with ITVX). 
  • “FAST Channels” (Free Ad-supported TV Channels): themed pop-up channels based on the viewers’ preferences, designed to give “a scheduled experience” as part of the streaming offer (something that we have tested at MTM for other VOD services).  
  • Free Blockbuster films: ITV has stated they plan to stream 500 in their first year 
  • Additional access to US content: due to ITV’s deal with WarnerMedia (The 100, Supernatural, The Sex Lives of College Girls, plus noughties classics like The OC and One Tree Hill), where it plans to make many more deals to increase its content load. 

ITV has stated that it has dedicated a £160 million budget for digital-first content, as it plans to launch ITVX with around 15,000 hours of content – nearly quadruple ITV Hub’s current 4000 hours. 

What’s behind this major move? 

This big transition is part of ITV’s “digital first” strategy. Firstly, its Managing Director has stated that the strategy reflects the fact that “viewing habits are changing rapidly”. It’s almost like the ‘BBC Three going digital’ decision that was made in 2015; the ambition of getting ahead of the curve, of being ‘the first’ UK broadcaster to offer a substantially different model and way of viewing. Except this time of course, ITV is drawing on years of more established VOD behaviour – so perhaps it’s less likely we’ll see any return to the ‘status quo’ in the future.  

Secondly, 2021 was reportedly a record year for both ITV Hub and Britbox. Evidently ITV wants to capitalise on this and convert both these audiences to ITVX (presumably alongside attracting new users). And while Britbox was said to have a record year, it’s clear that the SVOD service has struggled to really make inroads with a British audience (contrasting with its international performance). So you can see the potential benefit of collapsing it in to another service.  

Thirdly, ITV hopes that ITVX will “enable ITV to double streaming viewing, double monthly active users, double subscribers and deliver valuable addressable advertising inventory at scale”. Ultimately, it’s a way of reaching more eyeballs whilst expanding its revenue streams (via both the AVOD and SVOD tiers). Perhaps ITV hopes a subscription income will be more stable, and less susceptible to the ups and downs of the ad market (and in turn, the economy).

What has the response been like?  

So far, the reaction to the new venture has gained a mixed reception. Whist last year ITV enjoyed an increase in revenue and viewership across the board, this announcement led to a significant share price drop. Shares are slowly rising back up but are yet to reach the former price.  

A big reason for the drop is cynicism from investors about ITV’s huge spending plans; it has ramped up its budget for new content streaming production to £1.23bn in 2022 and £1.35bn in 2023. The 2023 figure is said to be £200 million more than anticipated.  

It can be argued that this major investment in content is needed in order to take on the streaming giants, but some commentators claim it could be ‘too little too late’ in such a highly competitive and expensive market.  

Others have voiced their approval of ITV’s strategy. Rhiannon Murphy of The7Stars sees the shift as the “only right move” they could make to progress their business, and “totally makes sense” to behave more like other SVODs. It’s also worth noting that Disney+ seem to be discussing the option of an AVOD tier in addition to the SVOD tier – suggesting that this part of the plan does indeed have some credence.  

And lastly, what might the implications be?  

Audiences’ needs are increasingly met by VOD services, but broadcaster VODs in the UK have struggled to significantly shift perceptions from ‘catch-up’ to content destinations in their own right. And while it’s clear that ITVX’s ambitious product will help start to turn that dial, we think embedded perceptions and behaviours will take a little time to really shift.  

Further, ITVX’s nod to becoming an aggregator is interesting (they mention they’re open to future partnerships with other VOD services, in addition to Britbox). In the UK, Sky Q has set the bar high in a complex area of the market. While consumers vocally yearn for simplicity and aggregation, it’s quite a challenge to offer this in a usable and intuitive way that supports content discovery.   

Finally, for consumers, the switch from ITV Hub / Hub+ and Britbox to a singular brand and product entity – with an altered proposition – won’t necessarily be straightforward. ITV’s brand and marketing strategies will need to answer three key questions to make a success of this venture;  

  1. How do we transition current users? 
  2. How do we attract new users? 
  3. And, how do we foster an ongoing relationship with them?  

This is the kind of stuff we love – we can’t wait to get talking to viewers and finding out what they make of it all!