STV and Virgin Media in strategic partnership

STV CEO Simon Pitts

Glasgow-based media firm STV Group plc and Virgin Media on Monday signed a four-year strategic partnership will see Virgin TV customers in Scotland having access to fully regionalised versions of STV in HD for the first time.

STV said the agreement “which results in a new commercial relationship between the two companies” includes the launch of STV Player on Virgin Media’s set top boxes, also for the first time, as well as an enhanced marketing commitment from Virgin Media on STV’s services.

Analysts at Peel Hunt wrote: “STV today announces that it has reached a commercial agreement with Virgin Media.

“This deal sees Virgin Media carry agree to carry both the STV HD variant and STV iPlayer on its services in Scotland.

“Additionally Virgin is committed to levels of marketing support.

“While the details of the agreement remain confidential we believe that together these two elements will add c £1m to STV’s PBT in 19 (through additional high margin digital inventory) rising to c £2m in 2021.

“This is c 4.5% increase to PBT in FY 19 (from £21.9m to £22.9m) taking EPS from 46.4p to 48.5p …

“We rate the shares as buy recommendation with a 460p target price.

“We will review this target price with the interims tomorrow.”

Simon Pitts, CEO of STV, said: “Virgin Media’s TV platform is very popular right across Scotland and we’re delighted to be enhancing our partnership and extending the reach of STV’s fantastic programmes through this innovative, long term agreement.

“We’ll be giving our Virgin viewers two ‘firsts’, the launch of STV Player and the launch of all STV regional variants in full HD, allowing Scottish audiences to access our popular shows however and whenever they want them.”

David Bouchier, chief digital entertainment officer at Virgin Media said: “We are very pleased to have agreed this long term partnership with STV. 

“It is fantastic news for our customers in Scotland as it will be the first part of the UK where channel 3 will be fully regionalised in HD. 

“Virgin Media’s Scottish customers will be able to watch their local version of STV for the first time in HD, no matter in which part of the country they live.”