Memorandum from STV
The CMS Committee has launched an inquiry into the future for local and regional media. STV welcomes this further focus on the future for regional and local media at this critical time for Digital PSB.
CMS Committee seeks views on its broad questions, and we provide them below. The Committee will also investigate other
areas of interest during the Inquiry, and STV would very much welcome the
opportunity to give evidence at this critical time for local PSB delivery in
digital Scotland, and to update the Committee with our views on news provision
at local and regional level, and how it should be funded. Discussions are at a
key point, and we would propose to update the Committee in advance of our
attendance with a further written submission. In the meantime, we provide
background below on our business and operational initiatives as a national,
regional and local PSB broadcaster across
STV holds the two
regional Channel 3 licences for central and north
It is an accepted
principle that PSB has to extend beyond traditional linear delivery to new
platforms for maximum reach and impact. That is borne out by the conclusions of
We remain committed
to the role of commercial PSB for
(i) business sustainability;
(ii) expansion of our PSB remit onto new digital media platforms, and thus enhancement of our service to viewers; and
(iii) a relevant schedule for the people of
Our record shows
pro-activity on each of the above, and demonstrates hard work innovation, as
well as commitment to promoting talent, skills and employment within
STV steps to position itself for growth
· Firstly, we took dramatic steps even before the economic downturn to rejuvenate and strengthen the business through the disposal of non-core assets, the reduction of debt and re-financing. We subsequently met our financial targets for 2008, and delivered 10 out of 12 of our publicly stated KPIs (see Appendix 1). Our steps were aimed at positioning the company for growth, and the transition to digital, but they will serve us well in the economic challenges ahead.
we acted early to embrace technological advancement, and in January 2007 we
took advantage of the flexibility of the DTT system and invested in split news
offerings to deliver four new local news services for our viewers, and made
them available on line. That was an early contribution by STV to dual-delivery
PSB just as
activity saw STV launch a new video site in July 2008 with a world renowned IT
partner. Our website has seen growth of c 400% measured by visitor numbers over
the past year. We now reach some 0.75m unique visitors every month, and this
number is continuing to grow in line with our expectations. Our aim is the
creation and distribution of rich digital content to migrate viewers to new
platforms, and to maintain and strengthen the connection with our audiences and
advertisers in a digital
during early summer 2009 we will launch four city sites covering
we have forged ahead with our strategy to create a relevant broadcast schedule,
staying with the
STV and news
· We believe regional news for
· Regional news from STV has shown a
rising share over the past three years (dating from the launch of
technology-enabled localised services). We deliver plurality alongside the
· STV is committed to ensuring relevant
news and local coverage to Scottish viewers, including those who are migrating
to new platforms. In the age of media convergence, it is a commercial
imperative for PSB broadcasters to follow the migration of viewers to new platforms,
both to enhance the viewer experience with programme related web-support
material, and to provide that increasingly localised focus which an interactive
digital offering can provide. The provision of localised multi-platform
services is a natural progression for STV, and is a huge opportunity with the
· With the further financial pressures of the economic downturn, the news provision which STV can offer will inevitably have to be reduced to counter the downturn unless there is intervention in the form of direct funding.
· STV does not want to take this step of reducing its news offering, and is highlighting with urgency the need for direct funding. STV spends £7m per annum on its regional news.
§ STV recognises the moves towards
direct funding as a necessity to protect plurality, and to provide news and
local richness. STV welcomes updates from the European Commission who are
currently consulting on new Guidelines for the Application of State Aid Rules
to Public Service
§ STV recognises the drive towards
contestable funding for regional news and the move towards
§ Localness is a key component of the future vision for Digital PSB. Other commercial and community providers will make an increasing contribution to some parts of the vision for an information rich digital society, but the most valued material - news - has to be protected and promoted.
§ We look forward to discussing our views and initiatives with the Committee, and will provide up to date written material on the status of our discussions with Government and regulator in advance. In the meantime, we offer some answers to the Committee's questions below.
1) The impact on local media of recent and future developments in digital convergence, media technology and changing consumer behaviour;
Local media has an impact, but it is important to view the issue from the other side of the telescope - the importance of the broadcast platform, and a trusted brand to promote take up on new platforms.
Media literacy takes many
forms, and recognizing that no one behaviourial trend prevails amongst the
Online quality is key as
far as news provision is concerned - impartiality and standards must prevail in
this case. Economies
of scale could deliver tangible benefits in the viewer experience of
re-purposed, ultra local news. Costs per minute of production reduce as news
output increases. Building on the
success of the micro regional news output that we
In the current climate there is not sufficient money to pay for quality, original journalism so people turn to news aggregation sources (and software) to keep the industry alive by obtaining stories at low cost. Quality must not suffer.
Technology developments mean that we are moving toward platform convergence - the web - but local media start from different places and therefore have different journeys (some of which they may never complete) and they have different editorial/content/volume requirements.
TV is video heavy, text light. The number of words in a 30 minute news programme would easily fit on less than the front page of a broadsheet newspaper. The number of stories on a TV news programme is probably around 15 per half hour. A newspaper story and word count is, therefore, much higher. The print media will have to invest in additional staff and workflows to move towards video production. TV, for its part, will need to create more text which will only find its way onto the web.
2) The impact of newspaper closures on independent local journalism and access to local information;
Many sources of information will arise, but the distinction has to be drawn between information versus journalism. Without accountability obtained through journalistic work, there is a democratic deficit. Once it is lost, people have to be relied on to make their own evaluations and with sources not always impartial, that will be difficult.
Key is trusted brands who can deliver impartiality, albeit recognising that access to local information per se will improve. Market demand and technology will see to that.
Local newspapers produce a very high volume of local news, broadcast cannot deliver that equivalent volume online with fewer resources. Basically, news copy has to be created, paid for and published. You get nothing of value for free or little cost.
3) How to fund quality local journalism;
Only option is to inject public money and to trusted people who are
accountable through their licensed PSB obligations. We have people on the
ground. The other option is to re-engineer the market local journalism to make
it more commercially successful. However, the issue is that the
Intervention is therefore key. It is important never to lose sight of
the fact that intervention has been the route to providing quality TV in the
Then in the Fifties, intervention to offer scarce spectrum created huge value from the 50s onwards as the commercial PSB market was established.
Now technological advances have opened up the digital world, and undertakings can no longer have licence conditions imposed at cost. in days where the return in terms of access to spectrum has no value anymore.
High quality local broadcast journalism does thrive in other countries,
not least the
4) The appropriateness and effectiveness of print and electronic publishing initiatives undertaken directly by public sector bodies at the local level;
This has to be seen for what it is - PR and care must be taken not to ill spend public monies. Let them inform the public on the services available, but that is not news delivery and evaluation of it. Indeed it is an important requirement in a democracy that all public bodies should be held to account. One such route to do so is through the press, hence the need for it not to be supplanted at local level by public sector information services. Local news, if it is to serve the democratic need must be seen to be independent as well as actually being independent.
Information v. journalism. Have to recognise the difference.
5) The role and effects of search engines and online content aggregators on local media;
The market will deliver a deep site to the top of the list - a trusted brand. Broadly this is positive for STV. A search engine will surface content worldwide.
The "Aggregation factor" is relevant for demonstrating the importance of brands: three quarters of news consumption on STV's web pages are via search engines. One quarter comes through our homepage. Therefore, the value of brand is important and creates a significant proportion of traffic on our site. If brand wasn't important, aggregation sites like Google would deliver all news traffic and media companies wouldn't bother advertising or creating homepages.
Natural search represents an objective ranking of the richest, most relevant sites based on the search terms inputted.
6) The future of local radio and television news;
The funding of regional and local news is the key issue to resolve.
7) The desirability of changes to the regulatory framework for print and electronic local media, including cross-media ownership and merger regulations;
All changes needs to take account of impact and potential distortion of the market and be preceded by due process in the form of market impact assessments and other appropriate checks and balances.
8) The opportunities and implications of BBC partnerships with local media;
Turn it round.
Bring efficiencies, Good idea but not much value. As for actual news output, there is a very low level of overlap editorially - given different agendas and geographies.
9) The extent of plurality required in local media markets;
STV believes firmly that, for established television
broadcast regions, plurality of editorial offering is essential. This is a
consistent principle behind our approach to sustaining regional news in
10) Incentives for investment in local content;
BBC is not there below city sites.
Low production costs and
low barrier to entry means that it is a rich ground for competition and
11) Opportunities for "ultra-local" media services.
Again the rise of ultra local is inevitable with low barrier to entry and non existent production costs beyond the "sweat of brow" or application of send button. Interest groups and individuals will drive this and causes will rise and fall depending on ultra local issues and the make up of the relevant locality. This is not an area for regulation but is the realm of the web and a feature of its accessibility and reach.
Summary of KPIs
STV Regional News Performance since 
The Training Detail
STV's contribution to the creative sector in
Creative Media Industries in
· During 2007, in addition to our permanent headcount of 375 staff, we employed over 500 people from the freelance community. These freelances filled a diverse range of roles within our Scottish based productions across both broadcasting and technical disciplines - high-end post production; commercial production; camera operators; sound and vision; graphic designers.
· In 2008 YTD, over 450 freelance staff have been
engaged, contributing to building and retaining a strong, talented and vibrant
freelance community in
· Through the combination of its freelance base and its permanent staff, STV Group employs c875 people annually directly and indirectly, and has contributed over c£30m directly in salaries and fee income.
Supporting new skills development:
· Through the establishment of our digital strategy and growth of our online business, we have created 35 new roles in web development and digital content creation.
· Additionally, we have brought previously outsourced (and off-shore) web development functions in-house, creating opportunities to develop knowledge and strengthen technical skills and capabilities within the Scottish economy.
Education and training:
· STV Group works in partnership with the education
· In March 2009, STV Group announced a graduate placement initiative providing work placements for media graduates within STV's News team and Content business in feature making programming. These structured placements will create opportunities for graduates to develop their skills and knowledge which will serve to strengthen the future of local and regional media.
· We are currently working with the
 Paragraph 9.34 of Phase One. See footnote 1.
 Second Draft Communication from the
Commission on the Application of State Aid Rules to Public Service