STV holds guidance as advertising recovery beats expectations
Scottish broadcaster STV today said advertising had bounced back more quickly than expected following a coronavirus-induced slump, though it warned the short-term outlook remained uncertain.
STV, which holds the channel 3 licence in Scotland, suffered a 20 per cent drop in advertising revenue in the first half of the year as the outbreak of coronavirus shattered confidence.
But the company today said advertising trends had improved “materially” over the third quarter and at the beginning of the fourth quarter.
Advertising revenue was down four per cent year on year in the three months to the end of September, with STV hailing positive signs of recovery in the autumn months, even compared to a spike during the Rugby World Cup 2019.
Total revenue for the year to October, however, remains 13 per cent lower, with STV warning that the Covid-related outlook for advertising remains uncertain.
Broadcasters have battled a sharp decline in advertising revenue since the beginning of the crisis, even as audience numbers have hit record highs.
STV posted its highest audience growth ever, rising 13 per cent in the year to October, while it remains the most popular peak-time channel in Scotland.
The company said its ratings success had been driven by the success of hit dramas including The Sister and Des, which was the channel’s biggest new drama launch in 18 years.
STV has also enjoyed sharp growth for its video on-demand platform, with online viewing up 82 per cent from January to October. In September Des became its best performing show on STV Player ever, with 1.4m streams.
The broadcaster’s studios arm was hit by a halt in production following the outbreak of coronavirus earlier this year.
STV said the hiatus would hit revenue but have a limited impact on profit, and maintained its guidance for the full year. The channel already has between £15m and £20m of commissions secured for next year.
“Despite the ongoing challenges around Covid-19, I’m encouraged that the advertising market has recovered strongly across the summer and autumn, demonstrating the enduring power of television and our ability to come through further uncertainty with confidence,” said chief executive Simon Pitts.
“We remain confident in our prospects for growth, and look forward to finishing the year strongly on screen with November traditionally our biggest month of the year thanks to the return of I’m a Celebrity; while in STV Studios our 14 new commissions so far this year means that 2021 promises to be our most successful year yet.”