A slump in demand for TV productions has hit ITV’s studio division, the maker of shows including Love Island and Come Dine With Me, as traditional broadcasters pull budgets for new commissions in the face of the ad market drought. The UK’s largest free-to-air broadcaster cut its fourth-quarter growth outlook for ITV Studios, which makes shows for its own channels as well as domestic and international broadcasters and streaming services, citing a slump in demand from free-to-air broadcasters who have been cutting costs. ITV is also cutting £10m from its programming budget this year, which it plans to spend next year, as it seeks to make £50m of cost savings by 2026. The drop in ad spending as consumers tighten their belts, plus the end of a content spending boom that had been driven by streaming services such as Netflix, have left many in the UK’s film and TV production industry out of a job. “The studios business has an excellent proposition and should be able to scoop up demand as streamers battle to create an increasing amount of content, but there’s still a chunk of revenue tied to less glamorous channels like terrestrial TV – which is cutting back,” said Sophie Lund-Yates, the lead equity analyst at Hargreaves Lansdown. “Pushing content spend out into next year won’t have been a decision taken lightly – cost-cutting can only go so far, and trimming this area of the business reeks slightly of desperation.” Shares in ITV, which grew total revenues across its business by only 1% in the first nine months of the year, slumped by more than 6% in early trading on Wednesday as investors reacted to the poor outlook. The broadcaster said total advertising revenues for the full year, which include traditional TV advertising as well as on the streaming service ITVX, will decline by 8% this year as the ad market remains “challenging”. ITV said that while the broadcaster had benefited from the Rugby World Cup in October, it expected total ad revenues to fall by 15% in November and 10% to 15% in December because of the high-spending football World Cup in the same months last year. “ITV continues to make good strategic progress despite the challenging macro environment which is impacting the advertising market and also the demand for content from free-to-air broadcasters in the UK and internationally,” said Carolyn McCall, the chief executive. “We continue to review our cost base in order to deliver further savings, in addition to our current £50m target to 2026.” In July, McCall said that ITV was facing the worst advertising crisis since the global ad recession of 2008. ITV said revenues for its streaming service ITVX grew by 23% and total streaming hours rose by 27% for the year to the end of September. “ITV is at the mercy of creaking economic conditions. Companies are snapping marketing purses shut as they buckle down for the unknown over the coming months, and that makes moving ITV’s advertising top line in the right direction a very difficult task,” Lund-Yates said. “Digital revenues are holding up much better then free-to-air channels, given the wider and more engaged viewer base. But growth here isn’t enough to carry the weight of the traditional business as things stand, and the exponential growth needed to make that the case is currently out of reach.”