STV is closing its loss making secondary channel STV2 as part of a “comprehensive three-year growth plan to focus the organisation on content and digital to deliver long-term growth for shareholders.”
There will be job losses as part of the STV2 closure as well as reductions in staff at its news operation. STV says the savings will be pumped into original content creation.
The organisation is to be restructured into three divisions across Broadcast, Digital and Production, each with its own md. Bobby Hain will be Managing Director of Broadcast while recruitment processes are underway for the other two MDs who will be part of a “new, leaner management team.”
The loss-making STV2 channel will close at the end of June 2018, with content investment shifting to the STV main channel and STV Player. STV says this will result in savings of £1m per annum “and a headcount reduction of 25.”
The broadcaster’s news operation will also have to deliver savings of £1m per year and a headcount reduction of 34. A new Head of News is being recruited “to lead this transformation.”
STV says it will use the cost savings “plus other redirected content spend” to allocate £15m for new investments over the next 3 years – the majority of which will be spent on new original content, with a focus on formats and returnable series.
The new programming will be made by STV Productions and showcased on the STV main channel.
STV will also create a dedicated digital team under a new Managing Director to drive the growth of STV Player. The digital team will focus on “improving reliability, introducing new features and personalisation, enhanced advertising, wider distribution and a richer content proposition.” A proportion of the new content investment will go to STV Player for exclusive programming, “targeting younger audiences with short and long-form content.”
Content production wing STV Productions will be repositioned and rebranded “to focus exclusively on developing returning series for both terrestrial and SVOD players” and will “establish flexible creative partnerships with producers, writers and IP owners to attract the best talent and expand STV’s creative pipeline.” There will also be a new formats unit that will pilot shows on the STV main channel before taking them out to the international market.
Simon Pitts, STV Chief Executive, said: “This is a positive vision for STV that will re-establish the company as a creative force in Scotland and beyond. We will invest in creative talent, new original programming and digital to ensure STV becomes Scotland’s home of news and entertainment and delivers long-term value for advertisers, shareholders and viewers alike.
Our de-risked broadcast business is resilient and provides the engine room for STV’s growth. We will use our unique marketing platform to showcase new formats from STV Productions, drive viewing to STV Player and get even closer to advertisers through the launch of our new Growth Fund for Scottish business.
News is fundamental to the STV brand and we remain committed to offering the best news service in Scotland. However, given how quickly news consumption is changing it is vital that STV evolves to stay competitive, and we are therefore launching a comprehensive change programme – STV News 2020 – that will see us invest in skills, technology and digital as well as delivering cost savings.
As a result of the challenging economics of local television and anticipated increased competition from BBC Scotland, we have taken the difficult decision to close our loss-making STV2 channel to focus our future content investment on STV and the STV Player. I’d like to thank the STV2 team for everything they have achieved over the last 4 years.
We have ambitious growth plans for STV Productions which is well placed to take advantage of the surge in demand for new programming from the Nations and Regions. We will exploit STV’s unique producer-broadcaster status to attract the best creative talent and showcase new formats and ideas for the UK and international markets.
The STV of 2020 will have creativity as its heart, working in partnership to drive the Scottish economy and showcase Scotland to the world.”
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