ITV is to increase its focus on streaming to compete with rivals including Netflix, in a move that will lead to job losses at its traditional TV broadcasting operation. The move, which involves the formation of a new on-demand division that will become the home of the BritBox and ITV Hub streaming services, marks the first step towards the hugely successful streaming model pioneered by Netflix. ITV said viewers could expect more new content commissioned for its streaming services, in the same way that Netflix and Disney+ have built global businesses with exclusive hits such as Stranger Things and The Mandalorian, but it said the reorganisation did not signal the end of household hits from The X Factor to Love Island being made available on traditional TV. “Linear channels will be around and be profitable for many years,” said Carolyn McCall, ITV’s chief executive. “But we also need an on-demand [streaming] business, which will increasingly be the focus of our new investments in content and technology, and which will be our growth engine attracting younger and more targeted audiences to ITV.” ITV has an annual programming budget of more than £1bn, which is almost totally geared toward its existing portfolio of broadcasting channels. These provide almost all of the company’s £1.8bn advertising revenues. A source said the changes were about “setting up ITV for the future” as more viewers, particularly younger audiences, gravitate towards streaming content online. “It is the start of a long-term change in focus,” said the source. McCall said: “ITV will continue to broadcast shows which entertain millions of viewers. Most are watched live [rather than streamed on-demand], and that fact together with the scale of these audiences will continue to offer unrivalled opportunities for brands to reach consumers.” While ITV’s streaming businesses remain minuscule by comparison – both in terms of audiences and revenue generation – they are both growing at double-digit percentage rates annually. The amount of hours viewed on its free online streaming service ITV Hub passed 500m last year, while registered users passed 30 million. BritBox, a joint venture with the BBC that operates in the US, UK and Australia and is to be rolled out to 25 countries, is growing at pace, with more than 1 million paying subscribers. ITV Hub+, which offers an ad-free experience, has attracted about 500,000 subscribers. The BritBox UK venture made a loss of £21m last year and ITV has forecast that it will lose around £55m to £60m this year. ITV said the restructure, which will be completed by March next year, would also work as a cost-cutting programme. “Both divisions [broadcast and on-demand] will be supported by leaner central support services,” the company said. “As well as aligning ITV’s resources and investments clearly to the two main ways of viewing, the restructure will drive improvements in efficiency and reduce cost.” ITV’s broadcasting business, which employs about 4,000 staff, will be replaced with a new media and entertainment division that will have two units – broadcast and on-demand. ITV said it planned to reduce its office space in London as leases on its properties come up for renewal in the next two to three years. ITV has three sites in the capital – Gray’s Inn Road, home to the news broadcaster ITN, Holborn, and White City in west London – and it is likely to reduce that to two. The company said the move was partly to cut costs, while also acknowledging the move to more flexible and remote working as a result of the coronavirus pandemic.