ITV and BBC plan to launch Netflix rival later this year

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British television giants the BBC and ITV have announced that they will establish a strategic partnership to bring a new streaming service to UK audiences – with the aim of challenging Netflix.

The BBC and ITV have agreed a joint vision for the service, called BritBox, and are now working on a formal agreement. The two companies believe other broadcasters will look to join in due course.

BritBox would be a streaming service that provides a collection of British boxsets and original on-demand series. The aim is to launch the service in the second half of 2019.

Carolyn McCall, CEO of ITV, commented: “I am really pleased that ITV and the BBC are at the concluding stage of discussions to launch a new streaming service.

“BritBox will be the home for the best of British creativity – celebrating the best of the past, the best of today and investing in new British originated content in the future.”

BBC Director-General, Tony Hall, said: “I am delighted that the BBC and ITV are working together on something truly special – BritBox. A new streaming service delivering the best home-grown content to the public who love it best. The service will have everything from old favourites to recent shows and brand new commissions. It’s an exciting time for the viewing public.”

The BBC and ITV will provide a further update when a formal agreement is reached.

ITV’s net revenue rose 3% to £3.2bn, driven by continued growth in the Studios business. However, the higher revenue was more than offset by cost increases in the broadcast & online division which, dragged full year earnings per share down 4% to 15.4p. The shares fell 1% on the news. The final dividend of 5.4p takes the full year payout to 8p per share, up 3% on 2017.

George Salmon, Equity Analyst at Hargreaves Lansdown:

“Not only is the way we watch TV changing, the rise of Google and Facebook means the way advertisers promote their products is too. All the while, a tighter economic background brings more pressure. These factors explain why ITV is seeking to modernise, and evolve away from its traditional model.

“ITV continues to grow its pay-per-view offering and its studios business, which sells content to other channels, while a new partnership with the BBC should help it adapt to the brave new world of on-demand streaming led by Netflix and Amazon. The BritBox service has been successful in the US, and ITV is hopeful it can replicate this success at home.

“While the strategy makes sense, and ITV is impressively growing its share of viewing, there’s no getting away from the fact the world is changing fast and the group’s core business is facing a battle to stay relevant. That’s a significant challenge.”

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