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STV2 axed; BBC blamed

STV is to close its second station STV2, sell the assets to local TV operator That's TV and focus on video-on-demand.

The news was announced as part of the Scottish broadcaster's latest strategy for "creative and digital growth". It blamed the challenging economics of local television and competition from the new BBC Scotland channel, which will launch next year.

STV2 was created out of a network of five local TV licences in Scotland, for Aberdeen, Ayr, Dundee, Edinburgh and Glasgow and replaced the short-lived city TV services for Glasgow and Edinburgh. It became home to the first integrated news programme, combining Scottish, UK and international news in one bulletin.

STV2 will close at the end of June 2018, with the closure expected to save £1 million a year. The closure of STV2 will cause 25 job losses, and a restructure within STV News will reduce headcount by 34.

The company has already agreed commercial terms for the sale of its local TV licences to That's TV, a company that already holds the bulk of the UK's local TV licences and operates services in locations including Manchester, Oxford, Norwich, Swansea and York.  That's TV has recently switched to a 'classic TV and local news format', but has been criticised by viewer groups and politicians for the quality of its local output. That's TV channels show a single local news bulletin in a loop through the evening into the night, with old films and cartoons filling up the daytime schedule.

STV will focus on beefing up its video-on-demand service STV Player, with an ad-free subscription version of the player to launch, mirroring ITV's similar offering with ITV Hub+. There will also be investment in STV Player exclusive content, to target younger audiences.