I'm back. Sorry about that, but with someone very interesting, so it's all right. Welcome to the third keynote here at the RTS convention, and I'm here with a woman who, well, the deal she has just done is being described as historic. So I imagine Dame Carolyn McCall, that we are going to be talking about that, and everybody knows what I'm talking about: seeing ITV as we know it split in two, and part of it transferred to Sky. And I should say it's subject to an approval process, so it's not a done deal by any means, but in big picture terms, all day people have been using that word consolidation, merger. Should we read into this deal that you actually think generally that a policy of merging is the only solution for big studios and networks to survive in the UK now?
Talking about studios now. Wow. So, you're not starting with Sky. So, I think that with studios, let's answer that question. So, ITV Studios will be the listed company and will stand alone if this deal goes through and is approved by the regulators, and we totally know that it is more than capable of standing as a stand-alone business. It's got scale, it's global, it's in all the most important markets. It has the most, it's quite interesting because I heard some of that panel, it's got the most incredible talent. We call our producers talent, so we give them a huge amount of creative autonomy, which is why we have nearly 65 labels in ITV Studios.
How does it compare in size to Banijay, the new huge Banijay?
So, we'll be second to Banijay, and we were second to Banijay, and then smaller than us. So, you know, the combined entity doesn't really change the ranking, but we're the second largest producer in the world, TV producer. So, put the US studios, film studios aside, and TV studios. So, we have scale, and I always believe scale for scale's sake is not the way to go. You know, that's not strategically a great thing because it can create bureaucracy, it can create friction, you're fighting over talent. You know, there's all sorts of problems that can come at scale. So, for me, the most simple thing is it's not just surviving, it's thriving. So, it's a really strong business.
And you don't think it's going to be ripe for a takeover itself? You don't think ITV Studios is going to be ripe for a takeover itself?
Well, I don't see why. I mean, that could have happened at any stage. I mean, as you know, it's pretty public that we've been talking and we initiate some of those conversations, but it's never been for sale. But when we have talked about ITV Studios with other studios, you know, we've always walked away because of valuation, because we believe it's a highly valuable company. It owns a huge amount of its IP. It's 100,000 hours in its library. 90% is English-speaking, travels the world really, really well. And it's a really strong business, and our shareholders are really supportive of ITV Studios being the listed company and will remain in it.
And so, the deal that you are in the process of doing, if it goes through, or you've done the deal, but it's got to go through. Yeah. Just explain why. Why that works for ITV, and why you've done it.
Okay. I mean, look, 8 years ago, we were like, okay, it's an analog company, ITV. It's all about linear, linear, linear. And it didn't have any data, it didn't have any digital foundation, had something called the Hub catch-up service, nothing else, had about 1,500 hours of content on it. And we knew I was brought in to completely transform it. And so, we built the digital foundation. We bought Planet V, which is an ad stack, which is very important to us as an ad-funded business, free-to-air ad-funded business. We did all of that. Then we launched ITVX. Been very, very successful. ITVX has been a transformation for ITV in itself, never mind all the other things that we've done. We've got great data, first-party data, all of those things.
I think COVID was really a tipping point, and I think that during COVID everybody turned to streaming as well as to PSBs. So, PSBs have been viewed a lot, and viewing figures went up for the first time in quite a long time, but streamers, if you were young, you knew about streamers. Over 55s exponentially started watching streaming because there was nothing else to do or to watch. And I think that was a bit of a tipping point because if you look at it in the last 5 years, just one stat, there were 200,000 hours of streaming content on your screens. Just 5 years ago. And today that is nearly 900,000.
900,000 streaming hours, and that does not include YouTube. And that's what we're up against. That's what we're competing for, for viewers. And then if you all just think about, on this very stage, you had numerous Netflix execs saying, 'We will never do advertising. Advertising? No, no, no, no advertising.' What did they do 2 years ago, 3 years ago? Advertising. Yeah. Disney, Amazon, we're up against all of them for advertising as well. So, it's completely changed the industry. I mean, it's been a seismic shift in viewing, but also in advertising. And as a result of that, we started looking at the strategy again for media and entertainment. And I will say, look, everybody else here, I'm not just saying this lightly, we really love ITV. You know, we love what we do in media and entertainment. It matters a great deal in Britain, but rationally and strategically, you know, if you talk to anyone at ITV, actually, even the most junior people would say we can see the reason. You can get the rationale, which is the competition is ferocious. And we want to be bigger than you.
Well, you've got to be, it's not just bigger, it's also the investment. So, you have to invest in technology. You've got to continue to invest in AR. You've got to continue to invest in efficiency, and most importantly, you've got to have enough money to constantly invest in content, because content is where it's at. That's what makes you all your money.
But then if you were listening, you probably missed it. Jeremy Clarkson was talking about how actually all the public service media needs to just get together. He called it BritFlicks. But then actually, you know, something like you talk about the success of ITVX, but actually is the elephant in the room not just why are any public service media companies? Why are you all spending amounts on different streaming platforms when they should all just be on one?
Well, because the BBC is funded in a certain way, Channel 4 is funded more similarly to the BBC because it's government owned. I'm a public company. The government doesn't own ITV. I have shareholders. It's 100% owned by shareholders. Our models are completely different. And remember, ITV is really successful. It makes nearly 550 million pounds profit. But, you know, if you want to preserve the public service broadcaster, which is ITV, that we're proud of, and you want to continue to invest in content, we had to do something different, and we needed scale. And that's where scale matters, because what Sky does is it has the technology, it already does technology. It's got a massive platform, and you know, if you look at every parameter, whether it's news, regional news, it can give it so much more platform. You know, this content supply agreement that they've agreed with us, 2.1 billion pounds over 5 years, which means that that will be spent with ITV Studios.
And after that, is your expecting, should ITV be worried after that? That can be renewed, right? What are they going to fill the schedules with? Well, they might go to other people.
Well, good luck. I mean, I don't think so, right? I don't think so. I mean, one of the most important things to Sky was our content, what we make.
So, what do you think it does mean for content then? Do you think if you've got two, you know, Sky does make its own original dramas, obviously, or commissions them. Do you think there will be less content in the, than the sum of the two?
No, more content. No, there'll be more content because the content supply agreement is a baseline. It's the minimum amount, 2.1 billion over 5 years. That's 400 million a year. That's a baseline. Sky don't commission a lot of content from ITV Studios actually today. They will start commissioning more. And also ITV Studios won't qualify as an indie. We won't include, so the indie sector will remain the indie sector. And the Sky deal is just with ITV Studios. Do you see what I mean? So, really the creative industry, so this is good for viewers. You know, just think about sports behind a paywall. Lots more windowed on free to air. I'm sure Siobhan will talk about that when she comes on. There are so many opportunities to window this content differently and to reach more people. But actually for the creative industries it means that it guarantees that content is going to be commissioned from the UK and it's going to be UK-driven content.
It is British content. It's an American company obviously in the end. In the end. Yeah. What does this mean for British content? What do you think of as British content?
I think of anything that is about Britain and originated in Britain is British content. So, you think of all the dramas we make, you think of all the entertainment shows, all the reality shows. They're very British. You think of all the kind of, you know, I mean, I can name hundreds of things, but I mean, I'm a Celebrity is very British content, right? Now, when that format travels around the world, it has other people doing it, but in Britain it's a particularly British show. That's what I mean. I mean, look at all the dramas, Mr. Bates, all the kind of things that we've done, I for the Law, with Sheridan Smith. I mean, just let's just believe me.
Although people who make these dramas say it's harder and harder and actually it wouldn't be possible to make them anymore.
Street. Look at Emmerdale. Those are all commitments that will be delivered, right? So, and most importantly, I think it's really important to say Sky have said that all our public service obligations will be honored. So, that is obviously very important for news and regional news. We do regional news very, very well. We do national news well, too. But I mean, regional news is a particular strength of ITV's. In fact, they think that can be augmented by Sky.
Do you think ITN will still be making news for ITV after the contract's over, or do you think Sky will take it over?
No, my personal view is that ITN is a strong news organization. Why would you duplicate? I mean, it already does Channel 4, Channel 5, and ITV's news, and it does it well. So, my personal view, and also, remember they have a long contract, so...
Well, it's 2031, isn't it?
