ITV pivots to streaming and studios as linear ad revenue declines

The shift illustrates the survival strategy for terrestrial broadcasters: transitioning from audience-aggregators for local advertisers to becoming global arms-dealers for premium content. By scaling ITV Studios, ITV is diversifying away from a volatile UK ad market and tapping into the production budgets of US-based streaming giants. This decoupling of production from distribution allows ITV to monetize its IP across multiple rival platforms. Investors should monitor whether the potential sale of the broadcasting arm to Sky materializes, as a deal would finalize ITV’s transformation into a pure-play content studio.

The strategic rebalancing at ITV occurs as the UK advertising market undergoes a significant digital transformation. Per Guideline, December 2025, linear TV ad spending was forecast to decline 12% for the year, while connected TV (CTV) investment was projected to rise 15% in 2026. This shift is mirrored by marketer sentiment; according to Comcast Advertising research from November 2025, 77% of UK marketers planned to increase their investment in streaming TV platforms in 2026, the highest intent level among all major European markets.

Simultaneously, ITV is navigating a challenging landscape in its production division. While external sales to global streamers have grown, ITV Studios has faced internal revenue declines due to strategic scheduling changes in its UK soap and daytime lineup, per ITV's May 2026 trading statement. This internal shift is designed to focus resources on higher-margin scripted drama and reality franchises that have proven successful on ITVX, such as 'Love Island: All Stars' and 'Gone.'

Consolidation rumors continue to dominate the outlook for ITV. Reports from the Financial Times and Enders Analysis in late 2025 and 2026 have consistently highlighted preliminary discussions between ITV and Sky’s parent, Comcast. The proposed £1.6 billion deal for the Media & Entertainment unit would potentially combine ITV’s local reach and ITVX tech with Sky’s existing streaming infrastructure to create a dominant domestic champion capable of competing with Netflix and Disney+.