STV’s new CEO Rufus Radcliffe has warned of a slump in ad revenue this quarter.
In a trading update, Scotland’s Channel 3 licence holder said total ad revenue for 2024 would be up by between 2% and 3%, which Radcliffe explained was driven by European Championship football coverage this summer.
However, STV forecast a 10% drop in total ad revenue in Q4, partly due to tough comparable with the same period in 2023, when it exclusively broadcast the Rugby World Cup in Scotland.
It is a worse forecast than ITV (STV’s counterpart in the rest of the UK) which earlier this month said Q4 total ad revenue would decline by between 6% and 7%.
ITV has been reportedly discussing a takeover bid in which a break-up of the broadcaster’s content and advertising businesses have been mooted. Potential bidders include private-equity company CVC Capital Partners and France’s TF1, according to Sky News.
Analysis: Double trouble
Both advertising and commissioning markets are in tough spots right now, as STV noted in Tuesday’s trading update.
The advertising story is more of a saga: STV, like ITV, faces the long-run challenge of declining linear audiences not being replaced as quickly by on-demand viewers — or, rather, not to the same volume as advertisers evidently expect.
Commissioning, however, is likely to be more cyclical as STV delivers to a global market increasingly dominated by streaming platforms. STV insisted that production division STV Studios “continues to perform well”, with a forward order book of £92m — having sold, for example, a second season of Criminal Record to Apple TV+.
But, while having a broadcasting company less dependent on advertising makes for a strong business story, selling to streamers carries the clear risk of having a largely US customer base. The world’s largest entertainment market and economy is about to enter a second Donald Trump presidency, this time with a media owner (X’s Elon Musk) appearing to play a key role.
Trump, whose mother was Scottish, may end up having a greater impact on Scotland than just the golf course he owns in Aberdeen.
STV ‘on course’ for £1.5m cost cuts
STV has a three-year plan to make “savings” that include at least £1.5m of cuts in 2024.
It plans to hit a target £5m annual run rate of savings by the end of 2026.
Radcliffe, who took charge as STV CEO on 1 November, said: “There’s no doubt that we continue to operate against a challenging advertising and commissioning backdrop, and we will continue to take action to mitigate against that where possible. The acquisition strategy in STV Studios is helping us to deliver in a tough market, with new commissions secured for original formats since our interim results.”
He replaced Simon Pitts, who is set to become CEO of Global soon as Stephen Miron moves to the role of chairman. Radcliffe was formerly ITV’s managing director for streaming, interactive and data.
ITV expects 6-7% ad revenue decline in golden quarter
Channel 4 linear ad revenue down 16% after TV market recovery ‘failed to materialise’
STV’s Simon Pitts to succeed Stephen Miron as Global CEO
