Exclusive: STV’s boss on the BBC and conquering the world as Scotland’s peaktime leader
The British broadcasting sector is hit by one challenge after the next. Following the rapid rise of the likes of Netflix in recent years, the next hurdle presented itself when the pandemic struck two years ago.
As a result, the advertising market is under huge pressure and many national and regional broadcasters are struggling to find decently sized budgets for content, acquisition, talent and expansion.
Scotland’s STV, however, seems to be an exception. The broadcaster has adopted an aggressive acquisition strategy, has rolled out a lucrative production model and is doing reasonably well online.
Time for City PM to catch up with STV’s CEO, Simon Pitts, for an exclusive sitdown.
Firstly, let’s zoom in your company, often referred to as a mini-ITV. Is this accurate? How would you describe your business?
We’re like ITV, but with go-faster stripes I like to think! There are obviously many similarities – we’re both Channel 3 Public Service Broadcasters, share a network programme schedule and are both navigating the ever-changing media landscape, and investing in our streaming services and production businesses.
But Scots watch more TV, I was told?
Yes, if you switch to button 3 on your TV in Scotland you get STV, not ITV. We get higher ratings than ITV because Scots watch more TV on average (it’s the rain…) and because of our strong connection with Scottish audiences through local programming, commercial partnerships and charity work.
And what about online?
In digital and production we also have two businesses with huge growth potential inside and outside Scotland, with STV Studios making shows that are broadcast across the UK and internationally, and STV Player the home of thousands of hours of premium drama from Scotland, the UK and around the world, all available for free.
Let’s zoom in online disruption for a minute. With linear TV channels losing audiences to streamers, what’s the future for state broadcasters? Is there space for everyone?
There’s room for everyone, I think. UK viewers don’t watch Netflix all day. In fact 70 per cent of all viewing inside the home is still to broadcast TV. When looking at the most-watched episode of each show last month in Scotland, only one of the top 50 was on a streamer, with an episode of Stranger Things coming in at number 47, the rest were on the main 5 linear channels, except for Love Island on ITV2, and who doesn’t love Love Island?! Our own STV News at Six was at number 2 on the list.
So do Brits need a strong BBC and Channel 4?
It’s worth remembering that not everyone can afford to pay for TV, especially during a cost of living crisis, so having strong free-to-air public service broadcasters like STV, C4 and BBC is more vital than ever. That’s also why it’s so important there is updated legislation to ensure digital services like STV Player and BBC iPlayer are always available and easy to find for audiences across the major TV platforms. The Government has thankfully recognised this but now needs to act through a new Media Bill.
You mentioned your production business, I understood it is expanding rapidly via your bullish M&A strategy. Can you talk us through the rationale behind this?
We see no reason why a Scottish production company shouldn’t be making world class TV for a global audience and we’ve been busy pulling together a brilliant team of creatives through investment and M&A who are now starting to do just that.
“Our investments all have much in common – big creative reputations, a strong pipeline of fresh ideas, and international ambition.”
Simon Pitts
Examples include a new high-end drama for Apple called Criminal Record being made with our partners at Tod Productions, which will launch simultaneously in over 100 counties next year; a second series of C4 prison drama Screw currently in production in Glasgow; and an ambitious new reality show for global streamer Discovery+, Written in the Stars, with one of our new labels Barefaced TV. Our production revenue is set to quadruple next year as a result.
Let’s zoom in on another important revenue stream, advertising. The market rallied after the pandemic and is critical to linear broadcaster’s income. Is TV advertising still effective though?
TV advertising is hugely effective and remains the best way to build brands. Our high-quality content and tight regulation makes TV a trusted and safe environment for advertisers and, according to Thinkbox, delivers a whopping 71 per cent of total advertising-generated profit.
Agreed, STV delivered record revenue and profit last year. How did you do this?
It all starts with high quality programmes delivering big audiences and that’s what propelled us to a record advertising year in 2021, with ad revenues up 24 per cent on 2020 and 11 per cent higher even than 2019, proving this was much more than a post-Covid bounce-back.
“We’re now the most popular peaktime TV channel in Scotland, ahead of BBC1.”
Simon Pitts
We have a fast-growing streaming service called STV Player, and our production arm STV Studios is making drama, entertainment and factual shows for a growing list of TV networks and global streamers.
But how did you overcome the challenges presented by the pandemic, such as productions being shut down or delayed?
Producing TV programmes has been tough during the pandemic. Early on we worked with the rest of the industry to agree new Covid safety protocols so that we could get our shows back up and running, including distancing, screens and regular testing. We make Catchphrase for ITV and this was actually the first entertainment show to get back in the studio only a few months after Covid hit. The industry been following these protocols ever since and there have been remarkably few delays right across the TV sector, a real credit to how hard production teams and freelancers have been working to keep everyone safe under intense pressure.
Finally, the TV industry has a big carbon footprint. How can broadcasters and producers help the sustainability cause and how is STV walking the walk?
Playing our full part in promoting climate action is now a moral and commercial imperative for all businesses. We know that the vast majority of people want to help, but many don’t know where to start. This is where TV comes into its own, because what broadcasters and producers are good at is bringing complicated things to life in an accessible, engaging and non-patronising way.