ITV to cut another £40m in costs

ITV plans to cut another £40 million from its cost base from 2010 after posting a 15% drop in ad revenues for the first quarter.

In a trading update today, the broadcaster said its overall revenues were down by 13.6% to £425 million as the “market remains weak”.

However, ITV’s global content division saw its revenues fall just 3% to £56 million, while its online revenues remained static at £9 million, despite a 150% increase it the number of videos watched on ITV.com.

Michael Grade, ITV’s executive chairman, said: “The television advertising market remains weak. However, ITV continues to outperform the market [which was down 16%], reflecting the continued strength of our on-screen performance, particularly in peak time.”

ITV1’s share of commercial impacts was down 6% in Q1 2009 but it is managing to pip its rival BBC One in the peak time ratings, mainly as a result of popular shows such as Britain’s Got Talent and new drama Whitechapel.

Grade said the broadcaster was “making good progress” with plans outlined two months ago in response to tough market conditions.

The plans included reducing its programme budget and making 600 job cuts, in addition to the 1000 redundancies the broadcaster was forced to make last October.

Grade didn’t give any details of what aspects of the business would be affected by the latest £40 million cuts, only that they would be made from 2010 and as a result total cost savings would rise to £215 million in 2010 and an extra £285 million in 2011.

However, more programme cuts are expected to come into play, particularly from its drama and sci-fi budgets.