As Audiences Boom, Scotland's STV Eyes International Growth

GLASGOW, Scotland—The power of television has been underlined during the global pandemic, not least in how its advertising can build brands and support local economies to return to growth. Add some new tech-savvy leadership amid that moment, and you might have the kind of success seen by Scottish broadcaster STV. The network has seen dramatic digital growth under the leadership of chief executive Simon Pitts, and now STV has become a prime example of how a local broadcaster can pursue ambitions beyond its own country's borders—creating new streaming content opportunities while also supporting the rebuilding of its home economy. Following an increase in advertising revenue and a steady growth of its content production studios, STV Group, Scotland’s commercial broadcasting channel 3 license holder, has set its sights on expanding its reach beyond the borders of its homeland, and 2021 is proving to be "a strong year," Pitts tells Adweek. The online opportunity While STV is affiliated with Britain’s biggest commercial broadcaster—ITV, which covers the rest of the U.K.—STV is the only part of the Channel 3 network not owned by ITV. STV Group was formed 15 years ago following a rebrand by owner SMG. It also acts as a major television producer and operates individual regional news broadcasts across Scotland, including for Edinburgh, Glasgow and Aberdeen. Now, after an extended period of digital ambition to grow its online news and content output, it is once again focused on its core proposition—television—as its driving force. Pitts joined in 2018 from ITV, where he was managing director of online, pay TV, interactive and technology—so it’s been no surprise that STV has seen an upturn in its digital viewing focus under his lead. The growth in digital viewing comes through STV Player, the platform on which Scottish viewers can stream live or catch up on content they have missed while also having access to box sets brought in internationally which have no run on the linear schedule. Alongside STV content, it also hosts the major programming of ITV, including Coronation Street, The X Factor, I'm a Celebrity Get Me Out of Here. By the end of last year, STV Player was available as a pre-install on devices in nearly three-quarters of connected U.K. homes, which increased its potential audience by 12 times to reach 50 millions adults. Its online viewing grew 68%. “Last year, 97% of all commercial audiences [in Scotland] were on STV, so advertising is still vital to us, but our proposition has to evolve if we're going to stay relevant and that means having a very joined up advertising proposition across both linear and our streaming service the player,” explained Pitts when discussing the various revenue streams being built within the company. “Our vision for STV Player is to become a destination," he added. "And not just in Scotland, but across the whole of the U.K.”—though he says the network's ambitions stop short of competing with giants like Disney, Amazon or Netflix. So far, the company has seen a growth in total advertising spend of 15% to 20% for the first five months of the year, with the first quarter seeing Scots restricted to their homes in response to rising Covid-19 numbers throughout the winter months. Television has been seen as the most trusted media. Building your brand is just what companies need right now.Simon Pitts, chief executive, STV In the end-of-year results released in April, the company revealed that VOD advertising through STV Player was up by 26% during Q1 and had seen eight consecutive months of growth since August of 2020. “That position has further strengthened in June, and we're very hopeful of a positive year overall,” he said, looking forward to the delayed UEFA Euro 2020 football championships. The games began at the end of June and will run for a month with multiple games running on STV/ITV, including Scotland’s national side, whose game against England was watched by 20 million people across the two channels. And that confidence shown in television advertising by big brands, as well as governments around the world, is another significant sign of confidence in TV during the Covid-19 crisis. “Television has been seen as the most trusted media … building your brand is just what companies need right now," Pitts added. "As their businesses and the wider economy starts to bounce back, and obviously the timing of the removal of the restrictions we're all living under, will impact the pace of that of the return of that market. It really showed its resilience in 2020.” Taking STV to the world And while advertising revenue is still vital to STV, it has been diversifying revenue through the growth of its own production company which has been receiving commissions by other broadcasters such as the BBC and Channel 4. STV Studios commissions have so far secured between 20 to 25 million pounds of revenue for the year and will soon see new drama series Screw and new factual entertainment format Murder Island run on Channel 4. STV Studios has also recently confirmed a further drama series commission—Blue Lights, by creative partner Two Cities Television—for BBC1. And it is through its content production that the broadcaster sees international potential, having sold a number of its shows around the world such as dramas Elizabeth is Missing and The Victim, which have gone to over 100 territories. “That's quite an exciting potential audience,” Pitts said. “We make different versions of our shows, and we're always developing our formats with an eye on developing them for multiple markets.” The potential for taking the streaming service to a wider audience comes down to the acquisition of international rights, but that changes the more IP STV owns, taking it away from its pure focus on Scotland and expanding it across the U.K., which through its addressable ad offer will grow its advertising reach. The first steps to growing outside of Scotland began at the turn of the year when it launched on Virgin Media, Freeview Play and Sky Q, while the STV mobile app can be downloaded through both Apple and Android app stores. That means STV is available within more than 20 million households across the U.K. through a connected device—around five times the reach of just over a year ago, Pitts said. “We're growing our addressable market very strongly,” he said, reiterating the need to secure broadcast rights for its content across Pan-Europe, or globally, which could be its next step. “Our first priority, we increased our market by more than 10-fold in the last 12 months, and we need to make sure we've got the content, the distribution, and also the marketing strategy and partnerships to make our service more famous across the U.K. before we before we think about international expansion,” he explained. Local support initiatives On top of these plans, the broadcaster has been supporting local businesses in Scotland through its belief that its local advertising proposition works. The STV Growth fund was launched three years ago to offer small businesses access to a national audience on a match-funding basis. The initiative has also started offering £100,000 (approximately $138,000) worth of services to companies championing diversity initiatives in Scotland. Alongside that, charity-focused initiative Local Lifeline was founded to support charities and local businesses impacted by the pandemic with free on-air and online advertising. And last year, the broadcaster also committed $1.4 million (1 million pounds) to the STV Green fund, offering advertising airtime for Scottish businesses championing sustainability. Two companies to have taken up the opportunity include an Edinburgh-based boiler company that has committed to planting up to 1,500 trees and an energy efficiency service provider in Irvine. Pitt believes STV holds a responsibility as “Scotland’s public service broadcaster” to raise awareness of climate change and to drive change in how companies respond. “The Green Funds can shine a light on both the great work that Scottish businesses are already doing to champion sustainability," he explained, "but also there is a need for us to support our local SME community to help power our economic recovery over the next few months and years as we recover from Covid.” British Broadcaster ITV Invests $2.7 Million in Location Finding Platform What3words

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As Digital Audiences Boom, Scottish Broadcaster STV Eyes Growth Beyond Its Borders

Online viewership grew 68% thanks to savvy app distribution deals

Stephen Lepitak

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