Sound + Vision. STV, the Scotland-based TV broadcaster, has acquired a majority stake in the three-year-old production company Primal Media, founded by Mat Steiner, Adam Wood and Lionsgate. There is to be no initial consideration but terms of the eventual purchases of the founders’ minority shareholdings have not been disclosed. The two companies have previously collaborated and the deal helps STV to expand its production, particularly of unscripted show formats. Primal has developed series including Bigheads, Carnage while STV have developed Catchphrase and The Dressing Room.
The £130m- revenue STV is the only one of the UK’s original commercial TV network not owned by the £3.2bn-revenue ITV. But one of the Glasgow company’s largest shareholders has suggested it is only a matter of time before ITV acquires it, suggesting a price of £200m. STV reported a 6% rise in operating profits to £20.1m in 2018. Total revenue was 8% ahead. The broadcaster claimed its strongest share of on-screen viewing since 2009 – up 13%.
New CEO Simon Pitts – who worked at ITV for 17 years, latterly as Managing Director of digital, pay TV, and tech – predicts strong growth for his digital offering STV Player, highlighting “valuable, long-term partnerships” with Virgin Media and Sky, along with exclusive rights to this year’s Rugby World Cup. He wants to move STV moving from being an almost exclusively advertising-supported business: “It is clear that people will pay subscriptions to watch certain high-quality content and some people will pay not to have ads put in front of them and we should be there in that market offering an alternative rather than saying ‘no you must watch ads even if you don’t want them’.”
Pitts has said he would be “happy to talk and potentially collaborate” with ITV and the BBC for the BritBox initiative, a proposed joint streaming service, aiming to rival Netflix and Amazon.
It will be interesting to see whether STV’s diversification into production, digital and pay TV helps it to escape the clutches of ITV – or whether Simon Pitts will just ensure that his former employer pays a high price for a company with so much growing to do. Arguably, the Brexit agonies across the UK, along with speculation about future Scottish independence, could improve investment and confidence in Scotland. STV might, therefore, attract the attentions of non-UK broadcast groups as well as ITV.