Earnings Call: H2 2018

Feb 27, 2019

Think that's everyone. Good morning, everyone. Thank you for joining us at ITV's 2018 full year results. I'm joined by Chris, who started officially just last week. First, I want to take you through the financial and operational performance for 2018, and I'm going to update you on our strategic progress since we launched our More Than TV strategy in July. We are really pleased, of course, that Chris has joined ITV, and he will spend a few minutes talking about where he's going to be focusing his efforts and attention in the coming months. We will then have time, of course, for your questions. Many of our senior management team are here today. You will have met them all at our Capital Markets Day. Please feel free to ask them any questions you may have, either in the call at the end of this or afterwards. As usual, before we start, I'd like to show you a video. It wouldn't be an ITV presentation without a video showing you our fantastic content. Our creativity and the quality of our programming is at the cornerstone of our strategy. It has helped to deliver our best viewing performance for ten years. In addition, as a result of producing more and more content globally through studios, we are increasingly diversified by revenue, by geography and by customer as this Sizzle will illustrate. People do bad things for lots of reasons. But some people deserve the consequences more than others. We give this everything we've got. But you lost, Steve. Oh, you know it alright. That's right. He wants to be a millionaire. I'm new chief constable. He's an American. She's a survivor. She will be okay. Embassy. Smiths. Do you want justice? All we want is hope. Snowpiercer is all that's left of the world. I'm signing you to the home secretary. Very good, love. This is about to be epic. ITV has delivered a strong operational performance in 2018 with, as you've seen, strong on screen and online viewing and good growth in studios. We are really focused on executing our strategy to create a stronger, structurally sound business, building on this operating performance and on our creativity. We're really pleased to have been able to announce this morning that we are concluding talks with the BBC to establish a strategic partnership to bring BritBox to The UK. More on that later. Now the economic and political environment has rarely been less certain, but we are delivering in the areas of the business which are under our control. And we will report today on progress in each of those areas of strategy. We have a solid balance sheet and good access to liquidity, which gives us the flexibility and capacity to invest to strengthen and grow the business and deliver returns to shareholders. Our financial results are slightly ahead of expectations with a stronger end to the year for advertising than we were expecting and higher organic revenue growth in studios. Total revenues up 3%, driven by 5% growth in our non advertising revenues, but profits were down as a result of the higher program budget with the Football World Cup. Our cash generation remains strong at 88%. Our leverage is 1.1 times net debt to adjusted EBITDA, which provides good flexibility as we implement our strategy. Reflecting these strong cash flows and the Board's confidence in the business, we will, as already committed, pay a dividend of 8% not 8%, 8p, up 3%, not 8%, 8p. Looking at Broadcast in more detail, we delivered 1% growth in total advertising, strong growth in VOD, up 36%, more than offsetting the decline in spot revenues. Our direct to consumer revenues have grown 25%, and we see that as a growth opportunity. In total, Broadcast and Online revenues were up 1% over the year. On the cost side, our scheduled costs were up £30,000,000 as we previously guided. While we continue to manage costs tightly, our non program costs were higher as we highlighted in the first half. Variable costs were impacted by our investment in Hub, Hub plus and pay per view and also the increased bandwidth and rights costs as a result of our significant growth online. Our infrastructure and overhead costs have also increased, partly driven by currency on our euro denominated transmission costs and partly as a result of increases in our property costs for our new London buildings. As a result, total Broadcast and Online delivered £555,000,000 of profit at a 26% margin with profits down 7% on last year. On to the financial highlights from Studios now. We delivered 6% growth in total revenue with organic revenues up 4% and our portfolio of acquisitions continued to perform. Total EBITA was £255,000,000 up 5% at a 15% margin firmly within our target range. Looking at revenue in a bit more detail, The UK was broadly flat with sales to ITV up 5% with the successful return of Dancing on Ice, an extended run of Love Island and an extra episode of Coronation Street. Our off ITV revenues in The UK were down 7% with growth in drama such as Bodyguard and Age Before Beauty offset by a decline in entertainment and comedy deliveries. Our international revenues continue to grow. ITV America revenues were down 21%, including the unfavorable currency impact. Excluding this, they were down 18%. This was because we didn't have a series of Hell's Kitchen after having two series in 2017. Hell's Kitchen have been picked up, which so we're starting production again this year. So we'll see Hell's Kitchen again in 2019. There were fewer episodes of some of our entertainment shows, but these were partly offset by new series such as The Four, Emmy award winning Queer Eye and Good Witch. ITV Studios Rest of the World delivered 32% revenue growth, driven by good performance in France with production of The Voice and Voice Kids as well as production of our other formats across key territories and our growing European drama capabilities. Global Entertainment grew revenues 14%, driven by our strong slate of drama, deliveries and entertainment IP. Now as you know, you were all here, I think, last July, we launched a new strategy and vision last summer in response to the changes we are seeing within the media market. There is no doubt that the pace of change is rapid, and our strategy is going to continue to evolve. Our priorities are clear, and we will ensure that ITV is the preeminent integrated producer broadcaster for viewers and for brands in The UK, a leading direct to consumer business in The UK and a world class creative force in global content production. There's been a lot of commentary about changes in viewer behaviors, so we thought it was important today to first look at that in a little bit more detail. Viewers in The UK watch one hundred and ninety two minutes of TV per day. This is down 5% on the previous year, but over 70% of all viewing across TV and non TV devices remains live. This is robust when you consider the profusion of other entertainment choices people have. Against this background, ITV's viewing performance has been very strong. Our total viewing was up with total linear viewing up 2% as well as significant growth in hub viewing up 32%. We continue to be the home of mass quality commercial audiences with 98% of all audiences over 5,000,000, and our share of viewing was up for the third year running. 16 to 34s are clearly watching differently. But look at this chart, and you will see that if you deliver them content that they want, they will watch it. Love Island is not the only example of this. ITV main channels volume of 16 to 34 viewing was up 2% year on year. ITV family volume was down only 2% against the market down 13%. ITV's share of this demo is also up, 13% for family, 10% on ITV2, and ITV accounts for 77 of the top 100 programs on TV for sixteen-34s. This included 3,000,000 average audience for sixteen-34s on I'm a Celebrity and 1,800,000 for BGT, for example. So TV and specifically ITV remains the only place to get a scaled, simultaneous, quality young audience, and that is very good news for advertisers. Of course, we're also driving significant audiences on ITV Hub. Total registered users has grown again, actually, and our average monthly active users have increased 64% following compulsory registration on connected TVs, meaning we are reaching our users more often, which is again, of course, important from an advertiser's perspective. Simulcast viewing is also showing strong growth, up 34% as viewers and particularly young viewers use devices to watch TV. 79% of all 16 in The UK are registered on the ITV Hub, up four percentage points on last year. So despite 2018 being affected by economic and political uncertainty, we increased our total advertising revenue after two years of declines with VOD revenues offsetting the decline in spot revenues. This is because ITV's overall proposition remains extremely strong. ITV gives immediate reach and scale that cannot be achieved anywhere else. It provides a safe, trusted, transparent environment in which to advertise, and it generates the highest return on any investment of any media. Broadcasters still deliver the same reach for advertisers as they did ten years ago with £1,000,000 spend, but now through a combination of linear and VOD, as you can see on the chart, and we've only put this chart up for 16 to 34 year olds. There is no question that the makeup of TV advertisers is changing as new categories and markets are being disrupted by insurgent brands. Some categories are growing rapidly. Telecoms, entertainment, leisure, government spending are all up. The key standout here are the online brands, which grew their spend by 10% and as a category are now the second largest category behind retail. It is these brands who see the immediate benefits of TV advertising and its return on investment. However, the well publicized issues with the High Street and also, of course, Retail and FMCG, they have definitely put their budgets under a bit of pressure, and they are spending less and have generally reduced spend across all media. So there is clearly a great deal of change in advertising trends and viewing trends, and we are keeping that under constant focus. Our strategy is designed to address those challenges and also the opportunities that they present. So very quick reminder of our strategy: one, strengthening the integrated producer broadcaster two, growing UK and global production three, creating a scaled direct to consumer business. You're very familiar with this chart now. So first, the IPB. Our plans for the IPB have five key components. We will now briefly illustrate how we are doing against each of them and our priorities for 2019. Much of what we've done so far builds the foundations for what we will deliver in 2019, so this year. We have clear measures of success that are set out on this slide. A highlight for 2018 has been our viewing performance, as you've already heard. The strong performance comes right across the schedule. Daytime is up for each of our three morning programs. Our new and returning dramas such as Trauma, Innocent, Vera and Endeavour have done really well. The enduring appeal of Coronation Street and Emmerdale, Britain's two top soaps. Our big entertainment shows, such as Britain's Got Talent, The Voice and, of course, I'm a Celebrity, which delivered its biggest audience ever, which was nearly 12,000,000 people. And the phenomenal success of the Football World Cup with a peak audience in the semifinal of 26,600,000 people. It's this great schedule and the continuous improvement in the ITV Hub, which has driven the strong online metrics as well in terms of viewing users and revenue. The first part of our IPB strategy and investment is to reposition ITV to drive more like viewers and increase reach. As we've highlighted before, ITV has a brand perception challenge. People love our content, but they don't necessarily associate it with ITV. So we started developing this year. And in January, we evolved the brand into a more creative contemporary position, which is now visible on ITV and the ITV Hub. The ITV Hub's new branding is now on app tiles, on product and in pre rolls featuring our More Than TV brand line. On the main channel, as you've seen in the sizzle, it includes idents and on screen presentation. We rolled out ITV Creates on January 1, with 52 different artists creating a new ident for each week. This has been so positively received by our viewers and also by the creative industry. We launched our brand advertising in January with our Great Characters Make Great Drama campaign featuring Roger Allum and Brenda Blethin. It has already got people talking about our content. We are now developing consistent off air marketing across multiple media channels, which has helped to successfully launch a range of key shows in 2019, as you may have seen, Cleaning Up, Manhunt and Vera. We've used it across established media, of course, and also social media. There is lots more communication to come in 2019 around our drama launches and, of course, the Rugby World Cup. Although early, we have already seen an improvement in brand consideration for light viewers, up nine percentage points in January year on year. So we're pleased with that. The second component of our IPV investment is the ITV Hub, which has shown strong growth in viewing and revenues, as you've seen in 2018, with a continuous improvement in content, experience and in distribution. We're enhancing and evolving the underlying online video platform. We delivered seamless live streaming at real scale with ads inserted. And at no time was this more apparent than during the World Cup semi final with nearly 1,000,000 viewers and Love Island, which was on really at the same time, which was averaging 300,000 viewers per episode. That's real scale. We enhanced the box set experience, introduced next episode signposting, implemented cross platform resume and trialed recommendations on iOS. In 2019, we will continue to enhance the viewer experience on Hub and start to really bridge the gap between ourselves and others in the market. This year, you will see us roll out a newly designed ITV Hub, which will create personalized experiences for all 28,000,000 registered users with program recommendation and prompts for new series. We will develop features that drive engagement such as video promos, resume play across all platforms, not just iOS. We will make the experience consistent across all devices. So wherever you see ITV Hub, it should look and feel the same. Our third area of investment in the IPB is in our tech capabilities and platforms. You know we have already strengthened our skills in key areas. We will continue to do so through 2019. We're innovating and developing our core technology. In 2019, we will increasingly invest in technology to deliver the specific priorities of our strategy, and that includes the launch of BritBox in The UK, our new SVOD proposition. We will be working with strategic partners to develop and launch a programmatic and data driven ad tech platform, enabling new commercial opportunities. And of course, we're using technology to automate operational processes and increase efficiency and productivity internally. In 2019, we're exploring ways to use digital workflows and data led decision making and scheduling our content and managing our rights. Technology, of course, enables our data strategy that's completely interlinked. We have significantly strengthened our data capabilities and have established a center of data excellence covering the full range of data and, most importantly, insight. That includes data science, analytics and research so we can understand, predict and affect behaviors across all ITV touch points. We are just at the start of the process, but we are increasingly collecting data across linear viewing, online viewing and every touch point we have with our users. We're beginning to unify it by matching this across data sets, enriching it with third party data and using automated tagging generated by our AI algorithms, all the while, of course, protecting the privacy of our users as well as the security, quality and consistency of our data. We are really focused on generating value and revenue in three key areas: driving viewing, accelerating consumer revenue and advertising. A great example of this is how we are driving viewing on the Hub by optimizing and personalizing the Hub experience and more efficiently reengaging with inactive users by using targeted marketing to draw them in. Data enables us to improve ad monetization, delivering advertisers more tailored audiences. For example, creating audience segments for advertisers around viewing behavior on the hub or complementing a linear campaign. The capture and analysis of data is helping us to build our direct to consumer business as well. We'll use AI to do predictive and prescriptive modeling to understand what drives our consumer our customer acquisition and retention for SVOD, and we will understand what actions are most helpful in improving that. Now just advertising specifically. We have restructured our commercial team. We have built a new client team and strategy to enable us to build long term partnerships with our advertisers. We have invested in creative partnerships team to provide original, engaging and brand defining marketing campaigns, which are embedded. The John Lewis Christmas Piano ad campaign with Elton John, which many of you, I hope, will have seen and the Suzuki ads featuring Take That are really fantastic examples of that. On addressable advertising, as we said at our Capital Markets Day, our priority is to deliver scaled addressable advertising around our premium VOD, and we have made really good progress. We have already significantly increased our addressable advertising inventory. In 2017, around 15% of our VOD inventory was addressable. Today, that is now 75%. However, it is a very manual process currently. We are very focused on creating an AdTech solution in 2019 to create a fully automated and data driven platform, and that will enable efficient, seamless and cost effective bookings from advertisers. We're in the process of having very positive discussions with third parties about about how we deliver this in the most efficient way, and we will update you on that as soon as we can. Let me just remind you why VOD inventory our VOD inventory actually is premium and highly demanded. One, it has verified completion rates and is non skippable. Two, it's full screen with the sound on and viewed by human beings, not bots. It's high quality programs. It's brand safe with broadcast level compliance. We know advertisers see this as the best of both worlds. We will continue to deliver mass simultaneous reach on our linear channels with integrated creative solutions and more tailor made and addressable targeting at scale around premium inventory on the ITV Hub. That doesn't exist anywhere else in the market. Now the second big piece of our strategy is, of course, our focus on studios. Our aim here, as you know, is to be a leading creative force in global content. ITV Studios is now a scaled business delivering good growth at a stable margin. Our plan for organic growth requires only modest investment over the next three years, as we said in July. Demand for great content, again, as you know, has never been stronger. It continues to be a real growth opportunity. We are well on track to deliver the targets we set out with good revenue growth at a 15% margin and a 5% increase in total production hours. So some of the highlights from 2018. We're delivering growth across our key genres. We sold 57 different formats globally. We're increasing, growing internationally, and 56% of our revenue is from outside The UK now, up two percentage points on last year. We are selling more to OTT platforms with original hours commissioned up over 35%. So let me give you a little bit of detail on some of these areas. We've seen good growth in all our key genres with particularly strong growth in scripted. As I said, the business is predominantly unscripted in terms of scale, but scripted, especially driven by demand from the OTT platforms, is likely to be an area of higher growth over the medium term. We're seeing increasing demand from platforms internationally for original, long form and secondary rights. In 2018, we produced and jointly commissioned a number of scripted and unscripted programs, including Vanity Fair with Amazon, Queer Eye for Netflix. In 2019, we have an original commission, Cowboy Bebop for Netflix. We are in development on a number of shows for Quibi, the new smartphone platform set up by Jeffrey Katzenberg and in which we are an investor. A key strength of ITV Studios is the very large portfolio of successful formats that return and travel, which we are strengthening each year. For example, in 2018, with The Voice Senior from Talpa and Britain's brightest family from The UK. Increasingly, we are also producing them locally, therefore, capturing the full margin, including The Voice and Love Island in seven countries, with Love Island also being produced in The U. S. In 2019 for CBS. As we look to 2019, we are clear on our priorities. Key to our success is, of course, attracting and retaining great talent. We will invest in building our creative talent, collaborating with innovative and entrepreneurial creatives with minimal risk and attractive returns as we have successfully done historically with producers in The U. S. Such as Jason Bloom and Marty Adelstein. We are also very focused on maximizing the value of our formats and IP internationally. There are exciting opportunities to license our brands and library content and drive value through merchandising using our significant capabilities across our network of labels and our global relationships. We see good growth opportunities for European scripted content, as I mentioned, with strong demand from broadcasters and OTT platforms for local content with global appeal. We strengthened our portfolio in this area with our acquisitions of Tetra and Cataleya. Cataleya, based in Italy, is very much on the vanguard of the growth into non English language drama with Saburo, which launched just last week on Netflix and zero, zero, zero to come this year on Sky, Canal plus and Amazon. And 2019 is set to be another strong year for TETRA with Vernon Subutex for Canal plus and the return of Profilage, Julian, you can say that, for TF1. We have a strong pipeline of new and returning shows, and we've already secured £100,000,000 more revenue than this time last year, which gives us confidence that we will deliver good revenue growth again in 2019. The third area of our strategy was very much about future growth, as you know, and it's all about the consumer. And we now have created a direct to consumer business. We're making good progress. Our revenues were up 25% to £81,000,000 We now have 8,500,000 paying relationships, which are up 27% on last year. This has been driven by good growth in our competition portal, live events such as Ninja Warrior Aqua Park and the Coronation Street Tour, our pay per view boxing events, which we've extended into 2019 with the rights agreement with Hayman Sports as well as our existing SVOD and pay propositions, ITV Hub plus BritBox in The U. S. And Canada and Circus in The Nordics and Germany are all performing well and demonstrate our ability to compete in this market. Hub plus subscribers have actually tripled in 2018 to 265,000 subscribers. BritBox U. S. And Canada has reached 500,000 subscribers. So BritBox is our exciting U. S. Thought proposition, which will provide an unrivaled collection of British box sets as well as original series on demand, ad free and all in one place. It will include programs from ITV, BBC and other PSP broadcasters across drama, comedy, entertainment and documentaries. As we've said before, we see SVOD as a real opportunity. As you can see on this chart, the pay TV market is worth £6,300,000,000 in The U. K, with an additional £1,300,000,000 generated by OTT subscription, and ITV has less than 1% of this total pay TV market. Subscriptions are growing at pace, up 20% to 12,000,000 households, so the opportunity window is open to us now. External data shows that more households are taking multiple subscriptions, while the growth in households with any SVOD service is 20%. The growth in homes with multiple services is 32%. This means that 12,000,000 UK homes now have 17,000,000 OTT subscriptions. Satisfaction among SVOD users is high, and the flexibility and affordability of subscriptions means they will take up more than one. We have undertaken our own further research, as you would expect, since the CMD to track the market, and it is showing no sign of slowing down. The most recent tranche of research shows that 4,000,000 households are likely or very likely to subscribe to one or another SVOD service in the next three months. And we know that two out of three of these already have at least one subscription. As you can see in this chart, there is a clear gap for quality British content, which is on the top right hand side. Desire for British content is high, with research showing that 43% of all online homes are interested in subscribing to a new SVOD service, which features British content. This actually increases to over 50% in homes with Netflix. So our team is in place. They're working around the clock to launch later this year. We've agreed a joint vision for the service. We are now working on a formal legal agreement. We anticipate that other partners will be added to BritBox. We will both speak to regulators and the wider industry now about our proposals. We know you have all been seeking clarity about our SVOD investments. So today, we wanted to give you an indication of quantum. Our net investment in BritBox U. K. Will be up to £25,000,000 in 2019. This will peak in 2020 at about £40,000,000 and is expected to decline thereafter. You will no doubt have a load of questions as to the drivers of these numbers. But today, I'm not able to go into further detail given we still need to go through regulatory processes and talking to other industry players. We will be disciplined. We will ensure we deliver a return on this investment, which creates value for our shareholders. Here is the consumer page for you all to sign up to be the first to hear news and updates about BritBox. So please do that. To ensure that ITV has a strong and sustainable future, we set out in July £40,000,000 of essential investment, which catches us up on technology, on the whole data side, on capabilities across ITV and on user experience. This will be partly offset by £15,000,000 of cost savings, which we are well on track to deliver in 2019. In addition, we announced a further £10,000,000 of investments in both 2020 and 2021, which will be entirely offset by further cost savings. I'm now going to pass you over to Chris for him to say a few words. Thanks, Carolyn, and good morning, everybody. It's an exciting time to be joining the industry as it changes and adapts to the market dynamics, and I'm delighted to be here today as part of the ITV management team. ITV is an immensely creative business with a great balance a strong balance sheet. It's got great content and a clear strategy which addresses the challenges and the opportunities in the market. And having spent twenty years in media and technology businesses, I'm really looking forward to the opportunity to use my experience to help drive business performance and help to execute and evolve the strategy. I've been really impressed by the energy of the team and a clear sense of purpose. And you can also see today that we've been making really good progress on the strategic initiatives. And again, I'm looking forward to making a meaningful contribution to continuing to deliver for shareholders. In the short term, I've got a few key areas of focus. These include capital allocation between the existing core businesses and the investments we're making for the future, the cost saving program, ensuring that we continue to have a robust investment appraisal process and that we capture the benefits of our investments and obviously helping to maximize revenues and drive efficiencies in the business in this fiscal year. So I look forward to meeting many of you over the coming weeks to talk more about our plans and our performance, but delighted to be here today. Thank you. So now to the outlook. In summary, we are very clear on what we need to do, and it requires a relentless focus on delivery. We've started the year with good online and on screen viewing with volume up and with share up. Economic and political uncertainty continues to impact the demand for advertising as we expected, with total advertising forecast to be down 3% to 4% over the first four months. The first half of the year will also be impacted by tough advertising comparatives, particularly in June against the World Cup last year. And the investments I've mentioned and the timing of ITV Studios deliveries being weighted to the second half of the year make the first half quite tough in terms of comparatives. We have a solid balance sheet, which enables us to make the right decisions to build a future facing and robust business and deliver returns to shareholders with a commitment of at least 8p dividend per share. We remain really focused on delivering in the areas we can control, and we are, as you can see, actively mitigating those factors that are outside of our control. Thank you for listening, and we look forward now to your questions. Questions? Just Pippa, do you want to where are you? Where's Pippa? Do you want to call on people as they Yes. We should just move them along the line a bit. Yes. William? It's Will Packer from Exane BNP Paribas. Three questions from me, please. There's a couple of potential regulatory interventions in the TV advertising market around sugar, high fat foods, gambling. Could you quantify your exposure there and where we are in the regulatory cycle? Secondly, The U. S. Content business had another tough year. Back of the envelope, the business is now 25% smaller than it was in 2015 in The U. S. Despite favorable ForEx. Is it right to think that you were overweight some of the weaker parts of the cable bundle and now you're better positioned and can grow from here? Just an update of where you see The U. S. Content business. And then finally, made you it clear you're going to talk specifics on the SVOD. I suppose a couple of background questions. One would be, could you just help us understand a lot of your content is already on Netflix, Amazon, Skype and their platforms? To what extent do they have exclusivity and for how long? Just some understanding there. And then additionally, you've given us a view on the potential addressable market today. Do you have any view on how much your potential competitors are spending on marketing? Thank you. Okay. Quite a lot of questions there. So on the regulatory side, I can't really answer that specifically because, one, there is no they've already regulated on gambling. And we follow and we're highly compliant on gambling. What's actually happening there, think, is that the gambling industry is taking a bit of action for itself because it's very worried about its own industry and the regulatory threats to the industry. So we will just wait and see. We will mitigate wherever we can on gambling. We're talking to them at the moment. The risk for us really is much smaller than it would be for some others, And it will be on a it will be more in a kind of big kind of World Cup year, for instance, be in a big sporting year. On HFSS, we don't know because they haven't really said when the consultation is going to even kick off yet. I think parliament's government's hands are full currently. And so I think we just wait and see. Also, what I would say is that we're doing a lot of work on ensuring that anything that emerges on HFSS is evidence based and data led and focuses on changing society and behavior and that we actually have a lot of evidence to say there are many, many other factors that are much more relevant. So we're very active on that. We've done quite a lot of our own work on that on the evidence side. On The U. S. Business, I think what you have to recognize is that The U. S. Market has changed fundamentally. So the change in OTT and the demand from OTTs and also the change in cable, as you pointed out. And what we've had to do is certainly, since I've been here and very much with Julian and David McGrana, we've actually shifted the focus of the business and restructured the business. So it is now much more a future facing business in terms of delivering content to everyone that's relevant in The States. And I would say we are much better positioned to do that. So smaller, leaner, move to Connecticut, real focus on cost, but also very, very active in making and building those relationships, whereas you've seen from the screen, we're actually selling a lot more to the newer platforms going forward. So I would say that we are in a good position in The U. S. And obviously, we have a very clear strategy for that going forward. On SVOD, what we've said is that we will honor all existing agreements. But I would and of course, we will. I think there's a huge distinction between our Studios business and all of our partners globally that we sell to. So when we are commissioned by the OTT platforms or by Sky or anybody else, that relationship doesn't change. That's a very strong relationship, and we are selling to them. Where we will shift is in the past, we had nowhere else to put ITV content. So when ITV commissioned its own content, it wouldn't have anywhere else to go. So it would be sold to other platforms. I think in the future, that content would go on to BritBox. So a very good example of that is eighteen months, two years ago, Love Island one and two went to Netflix. But that's because there was nowhere else to put it because even Hub wasn't very developed then to take series box sets. So that is where the shift will be, not on the relationship between studios and platforms and buyers. Does that make sense? What was your last question? Competitors. Competitors. Yes, how much is spending on marketing? Yes, marketing. So no one discloses that, to be honest. You can imagine that the costs in BritBox are really two things: content and marketing. And it's not marketing, as you and I might know, it is customer acquisition marketing. It's a very specific kind of marketing. And that relies a lot on CRM, it relies a lot on data you have, of the data you're building, and there will, of course, be some above the line as well. Don't forget, for us, the difference is we will have quite a lot of on air marketing that we will be able to use, which a lot of other players don't really have. And just to clarify your first response, could we have a percentage exposure to sugary high fat foods? You can't really because it just it depends on so many factors that It depends on how narrow that's going to be or not. So there's no way of giving you even a range on that. It's Omar Shaib from Morgan Stanley. A couple of questions. First of all, BritBox. Presumably, your assumptions on the amount of investment will includes an assumption on how much your core business will be cannibalized. So when a household takes the BritBox service, presumably they will watch less or fewer hours of your linear networks. Could you maybe walk us through how you're thinking about that impact and whether that's in the numbers that you have? Not really, I'm afraid. I mean that would be giving you quite a lot of our business plan across our entire business, I. E, not just on the SVOD business. And what we will do is monitor very closely what we're doing because we actually have linear, we have hub, we have hub plus and now we have BritBox. And the architecture of that and the windowing strategy of that and how you actually bring viewers from one to another is an absolutely fundamental part of what we are doing. So it's absolutely core to the strategy, but it's also going to be commercially sensitive. So it's unlikely we're ever going to be able to give you as much detail on that as you will want. Okay. So presumably, what you're saying is that your ambition is to minimize that cannibalization to the extent you Well, we've said very clearly that our ambition is to look at total viewing. So as long as we are still getting viewers into our universe, which is all of those things, that is good. We are focused on total viewing. Now of course, we are very, very mindful of the advertising money that is tied up both in linear and VOD, and we will manage that very carefully. Okay. And then just related, when you look at the SVOD services in The U. S, like CBS All Access or Hulu, they eventually ended up spending money on original content to differentiate the product against all versus all competition that they face. Do you anticipate the same thing happening for BritBox at some point in the future? Maybe you could talk about that. We've actually stated that at the outset, we believe original content is going to be absolutely necessary to this service because this is a way of hooking new subscriptions in. So it won't be in the first year, but we will be commissioning in the first year to be doing original content in year two, three and four. So absolutely original content is part of this. And that's included in the £40,000,000 for next year? That is currently included, yes. Thank you. It's Ian Wittkopf from Liberum. Three questions, please. First of all, just in terms of the absolute linear TV viewing, I mean that's a very impressive number. I mean it sort of takes away one of bear cases, I guess, against ITV in terms of you gaining share, but sort of what's happened to your absolute number. Just in terms of sort of trends moving forwards, how sustainable is that sort of over the short to medium term? The second question related to that is that obviously, your linear TV viewing in absolute numbers is going up. You don't spread out TV ad revenues now, but presumably, below total advertising revenues. That would suggest there is significant price deflation that's happening on the cost per thousand basis. So could you just give us an indication of where your prices are for the ITV main channel sort of in relation to historical sort of trends and sort of to give us an idea on that? And then the third sort of point sort of relates to what you said about building out technology, particularly around addressable TV sort of in 2019. If you do build out that technology and you are able to get sort of more direct contact with advertisers, then sort of one of your status strategies has been, as it were, to build up more direct relationships with advertisers. Do you think that will be a big boost to that? And I guess also as well, another question would be, could you ever imagine a scenario where you'd offer significant amounts of linear TV advertising direct to advertisers instead of going through media buyers? Okay. So there's a whole range of stuff there, and some of which you'll be disappointed because I won't be able to tell you. I think the first thing on absolute viewing is we have a fantastic programming and scheduling team in Kevin and his team, and I think that they have done an absolutely astounding job. But what it shows, I think, is that if you produce compelling content that viewers want to view, they will view it anywhere. Mean the big thing about this absolute viewing thing is that it astounds me that people are even surprised, given the proliferation of choice, that linear viewing will erode. Because they are coming in, in different ways, it doesn't mean they're not watching content. And they're often watching our content in different ways. So that's why our focus is on total viewing. And our job is to keep it as good as it possibly can be, as good as it can be. Now if you put Kevin on the spot, I wouldn't do that because basically, he'll always say, but you he will. But it's true. That's what he's and that's absolutely fine. But what he's doing is making sure our commissioners and our teams are constantly thinking about how they can do the best, most engaging content that engages our viewers. And we've had some stonking audiences. I mean the 11,800,000 for I'm a Celebrity and then our dramas, all reaching 7,000,000 or 8,000,000. All our entertainment shows, all our daytime shows, it has been. And that's what they're doing. So I think on absolute viewing, how sustainable? Well, of course, with the proliferation of what is going on, you're always going to be monitoring that. But we are also investing in hub, in VOD meaningfully now, and we are improving it so that people, if they're not at home sat in front of a TV, they can watch it on their laptop or on their mobile or on their iPad or wherever they are. So that's a very important part of the strategy. So I think I hope that answers that question. Can't really answer the question about CPM and historical pricing and what is the premium and because it's all kind of commercially sensitive. And as you know, it's all done on station average price. And I don't I just don't think we should kind of go there because it is all about it's our pricing model. So that would be a bit difficult. But on addressable, I can say to you there is a big difference between the work we're doing on the ad tech side of it, which is about automating and making it programmatic, is quite different really to the direct contact with advertisers. So if I just take two seconds to explain that. So what we're trying to do from a tech point of view, and it's highly specialized technology, is we're enabling advertisers, but particularly the group the big group agencies, the media companies, to be able to literally, on a very targeted basis, laptop to laptop, just literally book programmatic advertising highly targeted on Hub, right? Now that will make it very efficient, very cost effective and kind of just very easy. So it's a big step up for us and for them. The second bit of this is the direct contact with advertisers is about ITV being a business partner and not simply a media transaction. So I think in the past, we have great we have good relationships with advertisers, but they are actually welcoming the business conversations we're having with them in a tougher environment where we are able to help them in many different ways improve their businesses in terms of footfall or in pricing. We're doing certain things with them that if you just had a media interaction with them, you'll be talking about spot advertising. So that's where the direct relationships become very valuable to get much closer to their businesses. And as you understand them, you're not just saying sponsor X Factor or sponsor VGT. You're saying we're working with you indefinitely to try and understand what you're doing and see what we can do to help you. And that's where creative partnerships become really instrumental. And just a quick follow-up in terms of the absolute linear TV. If you're going up, and you're obviously a big part of the market, who's actually going down by so much to actually have such that big delta between your performance and the total linear TV market? Because we're very collaborative with the other broadcasters. But actually, all the other broadcasters are basically down because ITV has performed very, very well this year. But I mean that's just that's share. That's on the share basis. It's Adrian from Merrill Lynch. So a few questions, please. So over the last few weeks, we've heard a number of FMCG companies talking about reinvestment in brand support, but it doesn't seem that it appears Can you say that again? We've seen a number of FMCG companies talking about investment in brand support, but it doesn't seem to appear in anyone's numbers advertising wise. So can you just explain what's going on with this category? Did you say rev support? Yes. Yes. Well, basically, they've been talking about Revenue support? Yes. They've been talking about investing in brand and so on, but it doesn't seem that the advertising outlook for many players is getting better. That's the first topic. The second topic is why would the BritBox investments come down after 2020 because it doesn't seem like the Netflix costs are going down. And yes, we'll stop here, guess. I've got a few follow ups for Chris because you've not had any answers so far. Yes. Okay. Well, I'll bring Kelly in on FMCG because he's not he's very close to those advertisers. But I think you're right. I think I'll just answer generally for FMCG and indeed retail. I think their budgets are really under pressure, but that's because they are under pressure. If you think about the economic uncertainty that we're experiencing and the prolonged political uncertainty, a lot of people I talk to in businesses are contingency planning. So they're putting quite a lot of their investment into contingency planning, whether it's stockpiling food, whether it's stockpiling drugs. And therefore, they are displacing money into that and not and therefore, just being they're just waiting to see before they really start releasing what you call rev support, So that's what I'm seeing at a kind of quite broad business level as I talk to other CEOs. Kelly, anything specific? Well, think when you talk about FMCGs as category, if you look under the bonnet, different FMCG companies are doing different things. So there are certain companies that are moving money back into brand support. But broadly, what we're hearing is that they're being the FMCG customers are being attacked from three areas. They're being squeezed by the discounters, the Aldis and Liddells. They're being squeezed as a result by the other grocers who were trying to compete with the Aldi and Liddells. They're getting squeezed through shifting currency as a result of Brexit. And they're getting squeezed by what they call micro brands that are coming, say Harry's razors competing with Gillette. So in general, we're seeing the FMCG category under pressure for those specific reasons. But when you do look under the bonnet, there are certainly across 2018 and we're seeing 2019, some of them starting to really move back to TV. I think the key thing for certainly the brand those big brand advertisers is they're starting to question brand safety issues around YouTube and around Facebook. I think particularly around Facebook, there's a it feels certainly from the conversations we're having. There's a slight tipping point coming because Facebook's brand is becoming relatively toxic. And certainly for those big brand advertisers that have invested so much equity in those brands that there's a nervousness about using social media in general. Watch this space, but that's broadly what we're seeing in the market. And then Adrian, in terms of the investment, what we're giving you here is the net impact on ITV plc's profit. So it's net of revenue. So what's happening is that you've got investment, but you've got revenue offsetting that and the subscribers ramp, then that net impact on the P and L will go down over time. Okay. And so my first maiden question is for you, Chris. Do you know why ITV spent £60,000,000 on acquisition related expense despite not doing any M and A in 2018? And also, what's the outlook for the cash exceptional items after 2019? Because I think for 2019, you've guided 85,000,000 I think or 65,000,000 85,000,000 85,000,000 Is that going to be the future numbers as well? Or do we expect that number to go to zero at some point? So in terms of what's going through that line, it's essentially the earn out and the contingent payments based on performance so that we're accruing that through the year. So that's what's going through the P and L. So you're still seeing the contingent payments for the earlier acquisitions that we've made. And then you'll see actually in the accounts, we've got around £250,000,000 of anticipated future payments, which is our best estimate right now, and the 85,000,000 is included in that $250,000,000 And so going forward, that 85,000,000 comes down a bit but stays at per bridge to $250,000,000 or something? Well, it depends on the Studios team and their acquisition profile over the next few years. Thank you. There's a couple of Julien and then there's one Laurie Rice at the back there. Yes, good morning. First question is on total viewing. Thank you very much for those stats and going back four years, much appreciated and showing a flat performance. But if you look at the bar linear viewing that we have, the overall performance is quite contrasted between young adults and older people. So young adult go down a lot, older people go up a bit. So would it be possible to have an idea of what is your total viewing for 16% to 34% because advertisers value those categories more. So total viewing is great, but not enough to kind of is a good guide for is not a good enough good guide for revenue because of the contrasted performance. So basically having some idea of total viewing for 16% to 34%. That's my first question. The second one is on Studio. You said that your total number of hours sold to platform, as your platform was up 35%. But could we have the base? Are you going from one hundred hours to one hundred and thirty five? Or is it much bigger than this or percentage of revenue? So we have an idea of that. And then another attempt on Brickbox, I understand that this is the kind of two numbers you want to give us because the rest is commercially sensitive. But obviously, you have a revenue assumption in there, which we don't have idea about. So on one of those two years, if revenue was zero, what would be the losses? So your first question is the easiest answer, which is we can't answer that because then you'll get we're really, really very clear. We've tried to be really helpful. We honestly felt that we should give you some quantums that you could model those. And we have really said that until we have all the other things ticked in terms of post regulatory process, formal agreement, we won't disclose what's in those numbers. And there are good reasons for that. So you'll just have to wait for that, Julian, I'm afraid. On the 1634s, look, I don't think any of us would say reaching them is easy, right? I think they are generally known to be quite elusive because they're more cynical, and they are they do more stuff actually than people who are 35 plus. They go out a lot more. They do gaming. There's a whole load of stuff going on with 16s, 34s. So I don't think anyone says it's easy. But we have actually grown in family terms. ITV grew our 16 to 34 demo by 2%. So I think we're doing some stuff right. We don't overtly commission for 16 to 34, although ITV2 is what we see as the home for 16 to 34 in the ITV family. And actually, it does very well. ITV2 is the biggest audience for 16 to 34. It has beaten Channel four, hands down, right? That wasn't always the case. So I think ITV is doing some things very well for 16 to 34, and it isn't just about Love Island. I mean, everyone just goes straight to Love Island. It isn't just Love Island because eight weeks can't make a year's schedule. But that's not to say that we don't have to keep doing stuff that's fresh, innovative, contemporary. We've got ideas to do stuff from the hub that will appeal more to 1634s. The hub itself, the improving of the user experience, they're making it much more an on demand experience rather than a slightly kind of clunky old fashioned catch up service will really benefit 1634s in particular. They'll feel much more at home on the hub. And I think 80% of them registering on hub is a very, very big number. Actually, 80% of all sixteen thirty four have registered, have given us willingly their contact details so we can e mail and engage with them about what we're doing on the hub. That's fantastic. So no one says it's easy, but I think ITV are doing really quite well at engaging 16s to 34s, partly because of programming, partly because of investments in the Hub, partly because of marketing. Because some of our marketing is aimed at the light viewer segment is very important. Quite a large proportion of 6034s are light viewers. So I hope that answers your question on 6034s, but I'm happy to take it in more detail offline. Then you asked something about the base and OTT. So we haven't given the base for a deliberate reason. It is obviously a lower base than other aspects because OTT is an area of growth for us. So we've not started It's a relatively new way of us selling content. So I can't tell you what the base is. What was the other question on OTT? That was it, wasn't it? Julian, do you want to add any color to that in any way? Well, know that we do as you know, in a couple of months ago, we talked about how we're increasing our business in a multitude of different ways with the OTT players. Good example of that, if you look at something like ITV America, we talked about how we had a couple of projects in development. We talked about how we had a couple of projects in development with them in a couple of years ago, and that's now around about 2015, 2016. So it's quite a significant acceleration. But we do a modest increase We're very pleased broadcasters in Europe and in The U. S. In terms of investment. The investment envelope seems to be ever expanding. So can you rule out further investments in addressable, in ad tech, in MCN and in short form content? Have you presumably have considered those and have made decision on those? Second question is you're arguing that total viewing is what counts, not linear. Your advertising share low in linear is close to 50%. We know it's lower in ADVOD. Can you give us that number? And the third question, if the regulator blocks BritBox, what would be the net investment? Or would you actually withdraw? Okay. Chip in, Chris. On slippery slope, look, I think when you look at the balance sheet and you look at what ITV has done with its cash, it's done very well for shareholders. It's returned a lot of money for shareholders. You know it did special dividends for five years on the go. And actually, what I would say is that the £40,000,000 of investment is not kind of discretionary investment. It's really essential for building the future of ITV. Because without that tech platform, without the data skills and capabilities and indeed platform, without actually the people coming in who have AI and machine learning experience. And there was not one person at ITV that had AI experience at the start of this year. And without improving the hub and really investing in the hub, you can't do any of the other things that we've been talking about in terms of the future. So the £40,000,000 investment is just kind of what you have to do to be in business today. So I think you have to really view it at that. And we've said very clearly that it peaks this year and then it's £10,000,000 £10,000,000 both offset by cost savings in the next two years. And we've got a very good cost saving plan this year. We're confident £15,000,000 will offset some of that £40,000,000 So I think when you say is it going to be ever expanding, I wouldn't compare us to anyone else. I think we're very disciplined. We haven't made a huge number of kind of other investments, digital investments, noncore investments. We've been very, very focused. We've said we want to diversify our business. We've made acquisitions in studios in order to do that, and we're investing in direct consumer to further diversify our business. It's a very clear strategy for investment. It's very disciplined, and it is entirely about returns to shareholders. The AdTech that we are looking at, the P and L impact is in our P and L. And actually, anything else will depend on how we have to deliver that. But it is not going to be something that will be surprising to you in terms of investment. And anything else that you've talked about, I think you mentioned short form and other things, that's kind of all included in all of our investment going forward for now. So any other things that you've just mentioned in terms of short form or other ways of producing content, we have built into our planning assumptions for 2019, 2020 and 2021. I hope that answers your question on and we don't see it as a slippery slope. We see it as being very disciplined, very focused and really all about returns to investors. On total viewing, yes, you're obviously right. We have a 50% share in the ad market. The problem with AdVod is that our focus is on premium VOD inventory. When I was talking about programmatic there earlier on, we don't really we're ambivalent about all of the VOD inventory in The UK because some of it is extremely low quality, and it's not something we would compete with. And from a pricing point of view, we wouldn't want to go anywhere near. So for us, we have a different definition of what VOD inventory is for ITV. Does that make sense? It feels a little bit just like you're magic cutting the numbers in a way that would suit you because Well, not really. If your ad share if your linear share is going down Mhmm. And you're at 55, let's call it 50% market share and your AdVod share is, let's call it, 10% even in premium. I don't know what that number is, but if it's lower, then clearly, we've got a dilutive effect here. Kelly, do you want to comment because it's not quite like that? Sorry. TV, our share of revenue in linear TV is broadly 45%, I think, from a PLC perspective. If we look to our none of the other broadcasters share their VOD revenues with us. But if you were to look at our share of the broadcast VOD market, I don't think we're 1,000,000 miles off our linear share. So I think that I'm not understanding the dilution question, I think. Also, if our total ad revenue is up as it was last year, there's no dilution. I mean that's why the KPI is total ad revenue. That's what we're trying to increase over time. Okay. On BritBlox, Actually, we don't really want to go down the route of if it's blocked and if it's this and if that. We have a plan A, we're going to try and stick to it. And so we are very hopeful that this will be fine. Just bear in mind that actually, as I've said, the net investment that we've outlined for you is largely content and customer acquisition. So until you do that, you've got very minimal investment in BritBox. So the sunk costs are going to be immaterial, really, in the greater scale of things. Very clear. Thank you. Pleasure. There's two more questions over. Have you got a mic there, Maddie? I think they've shortchanged us on mics, don't you? Very odd. A lot of suspense. I hope I won't disappoint. Giazzoni Salati from Macquarie. Can you tell us that BBC is going to put the same amount of money into Brightbox? Secondly, technology. So what technology is BritBox going to sit on? Is that the same used in The U. S? Are you licensing? Is that cost somewhere else? Is it ITV Hub technology? Thirdly, scripted, it's clearly way more attractive in terms of growth than unscripted, but that's a strategy which ITV has already tried a few years ago, maybe five, seven years ago. That was the area of focus. It just happened that the successes came on the unscripted low violence side and not on the scripted side. What have you changed to be now more confident on increasing the share, I guess, on scripted, if you have a target target rate as well. And lastly, on cost savings, that was a comment which we could take as net incremental cost savings could come along in the future or maybe that, that is going to cover potentially net investments in somewhere else. Can you do you already have a sense of if you had CHF 20,000,000 cost savings tomorrow, would you pass those through the P and L or would you use them to invest in original content, I guess? Thank you. I think it's 15 questions. Shall I take the last one first? Take the last one first. We will go after cost savings where it's sensible to go after them. And Sharjeel has done a great job of pulling together the cost saving program for this year at 15%, and then we flagged 1010% in 2019 and 2020. I see them as two separate decisions. You just work efficiently and you take the cost out and do everything as efficiently as possible. And then you make some investment decisions on the other side. And when I talked earlier about looking at capital allocation, that's what we have to do every day is balance short term and long term, And that's part of the capital allocation decision. So I don't see it as I need to invest, therefore, I'll take cost out. If we should be taking cost out, we'll take it out. And then if we should be investing over here, we will invest. And that's how we see it, but balancing short term performance versus long term value, if that makes sense. On the BBC and BritBox, what we've given you is the net investment, the net impact on ITV for BritBox. We're not going into what proportion or anything like that because then it will just kind of disclose structure of what we're doing, and we haven't got to the end of that yet. So as I said, we're still waiting to actually get a formal agreement. So I can't really tell you that. On technology, I can tell you that it is our tech we are building the technology. Mark Smith here is our CTO on our management board, and it is about it being very integrated with what we are already doing. Do you want to add anything to that? Yes. I think just on the ITV Hub in general, we spent a lot of time over the last three years rebuilding the underlying stack, the technology stack that ITV Hub is built on. So as well as a great new front end, it's got a great new underlying online video platform really that it runs on. On top of that, we've added kind of payment and subscription functionality for Hub plus So a lot of the underlying components we have there already and we feel they're very strong. So we will be building it on top of that ITV stack. But we will also be using partners as well for a lot of the front end components and they will be similar partners for the ones we use for Ribault in The U. S. Okay. And on scripted, well, I mean, I'll bring Julian in here because he can talk in-depth about this. But I would say that what I have seen actually since I've been at ITB is fantastic quality in our scripted programming. So whether it's been commissioned by Kevin or whether it's been created elsewhere, Mammoth, for instance, Damien Timmerman and Mammoth and what they produce, not just for ITV but also for other broadcasters and for Netflix, has been extraordinary. I mean really, really strong programming. And World Productions have done Line of Duty and also recently, of course, Bodyguard, both owned by World is owned by ITV. So I think actually, if you look at U. K. Producers, ITV has done very, very well to have a fantastic range of talent in The U. K, producing some of the best scripted drama around. I mean, you want to Yes. I mean, there's two key points for me. One is that obviously, we're seeing unprecedented demand for scripted both in The U. S, the OTT players, but also in Europe. We're seeing renewed surge in demand for premium scripted across Europe. And then second, we have, compared to seven years ago, transformed our creative talent base. If you look at The UK, we've done that both in terms of some of our acquisitions, but also strengthening our existing organic business. In The U. S, with partnerships with Tomorrow Studios, Marty Elderstein's company, and of course, in Europe with the acquisition of Tetra and Catlayer. So it's a considerably stronger talent base in a market that's seeing an unprecedented demand for scripted. I think it's underlying our confidence. Hi. It's Steve Richthieu from Numis. Just on BritBox, sorry. That's okay. To clear out a couple of clarifications actually on rights and stuff. So STV has just launched an SVOD service, which says it will be available across UK and Europe at £3.99 a month. You just clarify, they're using your content, I know, for that service. How does that work for a BritBox service? And would it be fair to assume that any service that you did would be UK and Europe on that basis as well? And second question or third, whatever you want to say, is on the BBC. Can you just be clear that if I'm a BBC license fee payer, it's okay for the BBC then to charge me again in an Escort subscription service. From your perspective, do you see any issues on that? And then I guess finally, BritBox in The U. S. Is 5,000,000 subscribers, I think you said, out of, I think, it's 100 odd million TV homes in The U. S. Is that a reasonable target for you in a U. K. Context as a percentage? So I'm not going to go into subscription targets now. So that's the easiest question I'm going to answer, which is your fourth question. If you just take that off the list, you have to wait for some of the subscription information we might give you as we get further down the line. I'm going to bring Gos in. Martin Goswami is our expert on STV and many, many other things, obviously, but it only happened two days ago. So Gos cover The U. K, Europe, BritBoxing at the same time. So what STV have launched is effectively a version of ITV Hub plus but for Scottish residents. So basically, you need to register you have to be in Scotland to register STV plus if you want to get the Channel three content. So for example, if you go and register from London, actually, all you have access to is a very, very small amount of Scottish programming, so you wouldn't get Coronation Street, for example. The European thing is basically down to EU portability, which all subscription services in The UK currently benefit from. So if you've made your subscription in The UK and then go to another EU country, you can access it from there. And again, that's just a sort of level playing field. Yes. On the BBC license fee, I think just remember what this is because it's the past, so it's the present, and it is original commissions going on in the future. First thing to say is all the content on BritBox will be at fair market rates to both ITV Studios and to the BBC. So when things come on to BritBox, you're paying for them. So that's being reinvested for license fees into the BBC. So that's the first thing. Second thing is the original content will be ITV commission content. So you won't be losing the license fee to be doing original content that is not available free to air on iPlayer because it will only sit it will be exclusive content for BritBox. That's the second thing. And the third thing is that it's all about the windowing strategy, which is on iPlayer at the moment, you can only access content for a certain amount of time before it then actually disappears. So what BritBox is, is the home of British originated content, but it's permanent and it's comprehensive. So it's quite a distinct service to consumers. It's highly differentiated, and they have a choice as to whether they pay for it or not. No one is making them pay for it. So that's how I'd see the difference. Can I just clarify one thing you said there? Sure. Did you say that only ITV would be putting in original content? Only BritBox will be. So BritBox will be commissioning it, but it will be ITV led. So what I'm trying what I'm saying there very specifically is BBC license fee payer money will not be used to commission new content. Yes. I might be missing it. But are you saying that only you, ITV, The is putting other partners are in BritBox. Right. It's Richard Leary from UBS. Just a couple of questions. Just first one, sorry about BritBox in terms of just clarity. If you look at The U. S. Version of BritBox versus The U. K, do those two services differ in the future? Or is it going to be the same content that's going to be pushed into both platforms? Or am I missing something? No, it's definitely not the same content. I mean Remake here launched The U. S. Version and is also the Group Director of BritBox, so in The U. K. As well. She can come in, but it's definitely not the same content. It's very specific content in The States. It's very niche in The States, but I mean, we may talk about that. Sorry, I've got a couple of follow ups there. I actually wanted to ask a question. Shout. Just we need the mic for the retrans, sorry, then we'll give the mic back. So no idea how many mics you have. Not Neither. So yes, the content lineup in The U. S. Versus The U. K. Will be very different. It's very regional specific in terms of rights. As Caroline was saying, sort of BritBox in The U. S. Is a sort of niche British service with a large library catalog, very limited number of originals. And what we'll be looking at in The U. K. Is much more recent and contemporary, comprehensive library, but also a greater focus on originals. Obviously, there's opportunities in the longer term to join those two up and to get investment across programming, but that's not the plan from day one. Just again, just on The U. S. Side, I noticed that there's no losses from associates in the accounts. So of those 5,000,000 subs now in The U. S, are they now breakeven? Or are we still running losses in The U. S? Or how do we think about The U. S. Performance? We're very pleased with The U. S. Performance. We've surpassed the 5,000,000 subscriber mark now. But what was saying is there's no losses in the accounts? No, no, there's no losses from BritBox U. S. It's doing very well. And then just the last question, going back to actually the addressable TV side. Obviously, you had some investments in Sorenson Media, which obviously didn't go your way. And I'm just you've talked about, obviously, further investments. And but you also talked about partners. And within that partners, are you talking about AdSmart as a partner in terms of looking at addressable TV? And how do we Okay. Think about I wasn't aware we'd had any investment in Sorenson when I arrived in January. I didn't think it was an investment. So the first clarification is no investment in Sorenson. Actually, Sorenson were not able to deliver the addressable advertising solution. They were not able to deliver it anywhere in Europe, and they were focused on the state, which is why actually Kelly and I said we have to stop on that, and we have to really pursue something that is going to be materially kind of tangibly moving us forward this year. So that's the first thing. So we are working with other partners, and we hope to be able to talk to you about that quite soon. And that's a combination of technology. And actually, then there's a whole change internally about how we then deal with programmatic in addition to dealing with everything else we do. I mean trading is still extremely important to us. We won't lose focus on that. To answer your question about AdSmart, we became very clear in our strategy that we had to focus on VOD for programmatic. So hub is where we are focused to deliver that programmatic targeted addressable solution. And actually, what we also felt is that linear does its job really, really well, and we don't really need to start doing we need to prioritize VOD over linear on programmatic, right? That's basically what it is. And we've had numerous conversations to add smart, but there is something quite weird for us about paying away quite a lot, not just for technology costs, but also for advertising. So we are a market leader. As Laurie pointed out, we have 50% of the linear market. We'd have to pay away quite a lot to add smart, which I think they get. That's not our model. That's not what we want to do. So our focus is on VOD, and I think that and there's a lot to deliver there. So it's not as if we can do loads of different things. We have to be very clear about what our priorities are. That's our priority, not linear addressable. So linear addressable is not on the table today Not and not included today. Any I'm not saying that's not ever because we will continue to evolve the strategy. But today, we have a lot to deliver on programmatic on VOD. Okay. Thanks. Can I ask a question now? It's okay. Claire Enders. I wanted to ask you another question about BritBox. Sorry about that. But it's my question is really, are the numbers that you've put forward today hard stops on investment? That is to say that if, for instance, your subscriber numbers were to disappoint, that you would still keep your investment completely steady. Obviously, I I heard you say this is a very important future facing technology investment that we're making. So I think, you know, what I'd love to know is exactly how I mean, I would have thought that these are gonna be very, very material subscriber numbers to get to those very, very limited investment numbers, particularly comparative to any service. I mean, Filmstruck, a number of the Turner services that were shut down had already absorbed very substantially more than that. I believe that Sky's NOW service has absorbed about $1,000,000,000 of investment to get to 2,000,000 subs over six years. So what I'm asking is, do you have a hard stop in your mind or in your future around investment if the subscriber numbers materially disappoint? So I mean, we are very focused on return on investment, and therefore, we would be very, very closely monitoring everything that would go on in this business plan. And we have given, as I said, to the market a kind of view of what our investment the net impact on ITV would be. That's what we've done today. We will be very disciplined. I think discipline means that you know where you invest and you know where you have to stop investing. You know where you might need other partners. You might need other funding. That's being disciplined. So the key for us is that we are a commercial PSB, and we have to make returns for shareholders. And therefore, we will be keeping that plan under very close watch. And obviously, the subscriber numbers are totally material to the net impact on ITV. So that's the best I can say really on that. Any other questions? If there aren't any other questions, I'm going to just say thank you very much. Thank you for all your interest in ITV and in BritBox. I wasn't at all worried about answering any of those questions on BritBox. I sensed that you were worried about asking them on occasion. But thank you very much for your questions and also for being here today.