Page last updated at 13:57 GMT, Wednesday, 21 April 2010 14:57 UK

STV faces new challenges after sale of Pearl and Dean

By Jamie McIvor
BBC Scotland News

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STV is in a legal dispute with ITVplc

The sale of Pearl and Dean completes the transformation of STV Group, which started when the current management team took over three years ago.

The old Scottish Media Group - an attempt at a multimedia empire - is now a memory. The group now basically consists of the Channel 3 TV station covering most of Scotland and its linked businesses such as a TV production company and its associated websites.

It means the company can now focus completely on its core businesses. But these businesses are facing challenges.

A legal wrangle with ITVplc, which runs most of the Channel 3 network, continues. The dispute is over whether STV can withhold payment for network programmes it decides not to show.

Each side is suing the other - and both are adamant they are in the right.

One practical effect of the dispute and STV's decision to drop some popular network programmes was that some Scots discovered they could watch ITV1 London on satellite and cable - although this does not actually benefit the other station commercially and does not necessarily harm STV either.

Meanwhile a plan to use public money to pay for Scottish news on STV is up in the air until after the election. STV lost a bid to provide the service itself - but the company could still benefit if it goes ahead, as it would no longer have to meet the cost of providing news.

However it is by no means certain the project will go ahead because the Conservatives say they will scrap it if they form the next government.

More positively, STV intends to bring forward its plans for high definition broadcasting. However it faces a big challenge. Initially its HD service will only be on cable and Freeview - but the majority of people with HD equipment have satellite TV.



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SEE ALSO
STV to sell Pearl & Dean for 1
21 Apr 10 |  Scotland
STV sues ITV in new legal action
17 Nov 09 |  Scotland
STV 'might drop more ITV output'
26 Aug 09 |  Scotland

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