Currently, traders in ITV (LSE: ITV) have had extra purpose for cheer than shortly. The FTSE 250 broadcaster issued a good set of annual outcomes this month, serving to push the ITV share price up.

Certainly, it now stands 9% above the place it started the 12 months and over 5 years has elevated by greater than 1 / 4.

Nonetheless, the long-term image has been much less enticing, to place it mildly.

Over the previous decade or so, ITV has misplaced greater than two-thirds of its worth.

That signifies that it now trades on a price-to-earnings ratio of underneath eight.

The share additionally presents a dividend yield north of 6%.

Within the outcomes, ITV’s administration retained its dedication to an annual dividend of at the very least 5p per share and in addition stated there are prospects for progress within the payout over the medium time period. Dividends, although, are by no means assured to final at any firm.

That makes the broadcaster sound like a possible cut price for an investor to contemplate for his or her portfolio. Is it?

ITV operates in a quickly evolving market

Solely time will inform.

The previous decade’s share price efficiency has, nonetheless, been instructive in the case of understanding why some traders proceed to have doubts in regards to the long-term funding case right here.

A decade or two again, legacy tv was a far greater pressure than in the present day – with few broadcasters on the dimensions of ITV. Promoting spending was extra closely skewed in the direction of tv than it’s now. Social media is a way more necessary a part of most advertisers’ advertising spending than it was once.

That feels like a license to print cash – and for a very long time it was.

In equity, the FTSE 250 agency stays solidly worthwhile. However what has haunted its funding case and share price is the rise of digital media.

That may very well be unhealthy for ITV in two key methods.

It means conventional tv might entice much less advert cash than it used to. It additionally results in a extra fragmented viewing panorama, the place as an alternative of a handful of rivals, any part-time content material creator with a cellphone can successfully steal viewers away from old-school broadcasters like ITV.

All will not be misplaced

ITV, with a powerful model, many years of expertise, and plenty of understand how, has not been standing nonetheless within the face of such threats.

It has been centered on ramping up digital output, whereas milking the money cow of legacy tv. Digital viewing on its platform grew 12% final 12 months and digital advert income was up by 15%.

It additionally has a sizeable manufacturing enterprise, that means that the rising variety of content material suppliers truly works to its industrial benefit. It might probably hire them studio area and assist produce content material.

If it may continue to grow the digital enterprise whereas producing huge advert revenues from its legacy enterprise, I feel the ITV share price might doubtlessly be a cut price.

However its long-term decline factors to ongoing uncertainty about how viable such a method is.

What occurs, for instance, when legacy tv viewing will get to a degree the place its economics change into far much less beneficial than now? The FTSE 250 share could also be a cut price in the long run, however I feel it displays dangers imposed by a fast-changing media panorama. Not all traders might be snug with such dangers.