STV is to pull the plug on its STV 2 channel, formed from a merger of numerous local city-based channels, after agreeing commercial terms to sell its assets to That’s Media. The move results in 59 job losses across STV News and STV 2.
The withdrawal marks a broader shift toward online content at the broadcaster which has just published its three-year growth plan that sets out how it intends to draw over a third of profits from beyond linear TV advertising by 2020.
STV chief executive Simon Pitts, said: “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.”
The reorganisation is expected to save about £2m a year. All new investments will be financed via cost savings amid expectations of a 6% rise in total advertising for the first half of 2018 with national advertising up 2% while regional and digital revenues projected to increase by 20 and 25% respectively.
STV also took the opportunity to confirm the launch of a £5m advertising growth fund billed as a tool to help maximise its share of the advertising market as well as agreeing its first ever content partnership for the STV Player catch-up service which will include a new ad-free subscription option.
Last month Alan Clements, the respected head of STV's production arm, announced he was to quit following a ten year stint at the broadcaster.
The rights buyer That’s Media runs 14 local TV stations across the UK.