Cost-of-living squeeze to benefit STV streaming platform as viewers switch off Netflix

Scottish broadcasting group STV said it remained Scotland’s most popular peak time channel for the fourth year in a row as it posted first-half results ahead of 2021’s record levels.

The group reported a 22 per cent year-on-year rise in operating profit to £11.9 million on revenue up 3 per cent to £62.1m. It said Scottish advertising was showing “resilience and growth”, driven by the return of larger clients. The balance across small and medium-sized businesses and government spend is now back towards pre-Covid levels, the group noted.

Bosses said STV was the most watched peak time TV channel in Scotland for the fourth year in succession, with a share of 22.2 per cent.

The firm pointed to research suggesting that 64 per cent of Scots say they either already have or intend to cancel paid-for streaming services as the cost-of-living crisis intensifies.

STV chief executive Simon Pitts pointed out that the average Scot spends more than six times longer watching broadcast content each day than subscription video-on-demand services such as Netflix. Picture: Laurence Winram

Chief executive Simon Pitts said having a free catch-up and streaming platform, supported by advertising, stood the group in good stead as consumers rein in discretionary spending.

He also pointed out that the average Scot spends more than six times longer watching broadcast content each day than subscription video-on-demand services such as Netflix.

The STV Player grew users and ad impressions during the first half of 2022, although total online streams and viewing were down 13 per cent and 11 per cent respectively - reflecting strong 2021 comparators including Covid lockdowns and the Euros football tournament.

Pitts said the group’s studios business was “accelerating rapidly” as it secured major streaming commissions.

He acknowledged that the group was not immune from the tough inflationary backdrop and said “urgent decisive action” was required to tackle the energy cost crisis and reassure consumers and businesses alike heading into winter.

The board is proposing an interim dividend of 3.9p per share, up 5 per cent on a year earlier.

Roddy Davidson, an analyst at joint house broker Shore Capital Markets, noted: “We are pleased to note the impressive H1 financial performance.

“It is also worth bearing in mind that STV’s commercial arrangements with ITV provide a useful degree of profit cushioning against a weaker national advertising market via its contribution to programme costs.”

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