STV plans to launch a new app offering free community news, alongside international and national coverage, in a move that will heap further pressure on struggling Scottish regional and local newspapers.
The app will increase STV’s advertising revenues because it allows users to personalise its services, which in turn will help advertisers to use the information to target their ads.
It is understood that Glasgow-based STV will reveal details to investors and City analysts this week when it announces its half-year results.
The highly secretive project has been codenamed Metropolis.
The new service, which is scheduled to launch in the first quarter of next year, is part of the group’s increased investment in its digital business under chief executive Rob Woodward.
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An insider at STV said the hi-tech news app would enable it to reach fresh customers and offer a “highly sophisticated advertising platform” to commercial advertisers.
He said: “In addition to offering geographically targeted advertising off our player services, which allows advertisers to target specific post codes, the new service will also be able to offer demographically targeted advertising.”
He added: “We have got in excess of 1.3m people registered on STV’s online services, that’s one in three of the adult population in Scotland. We have consumer data on where they live, their gender, and their preferences, and we can use that data.
“TV is mass market, but Project Metropolis allows us to offer advertisers the means to target their product at very specific groups of people. It also offers our viewers services that are personalised, recommending content and services designed for them. It’s a new world, but one that offers real growth potential for advertising revenues.”
STV declined to comment.
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The BBC was warned off expanding its local internet news coverage when George Osborne, the chancellor, accused its online service of becoming “imperial in its ambitions” and killing off local newspapers and websites.
He warned the BBC that its website, which is funded by taxpayers through the licence fee, must ensure that it was not suffocating local newspapers after the corporation announced it wanted to increase its local coverage.
As a commercial broadcaster, STV is free to exploit the local news market. Sales and profits at local newspapers in Scotland have plummeted as readers increasingly get their news from free online services, particularly the BBC website, which has around 13m viewers per day.
Although the number of people using STV online services is still small when compared to live television, digital revenues are for the first time expected to account for more than 25% of STV’s profits when it reveals first-half results this week.