Good afternoon, everyone. I hope you all can hear well. You are very welcome. Thank you very much for joining us today. So in a moment, Lindsay and I will talk you through our results for the first half of 2024. We'll provide an update on our financial and strategic progress, as well as a sense of the outlook for the year, and as usual, we'll show you some on-screen highlights of shows that have been entertaining audiences on STV, as well as those we've been producing for other broadcasters and streamers in the U.K. and beyond over the last six months, but first of all, let me hand over to STV's Chair, Paul Reynolds, for some words of introduction. Paul.
Thanks, Simon, and hello, everybody. So in today's results, I wanna talk about STV's strong performance for the first half of twenty twenty-four, and about the leadership changes for the group. As you know, we continued to operate against quite a challenging macroeconomic backdrop, which has led to difficult market conditions in both advertising and program commissioning. But despite this, I'm pleased that we've grown the business in each of our divisions of broadcasting, streaming, and production. The fact is, we are now much more balanced business, thanks to the diversification strategy that's been implemented over the last few years. This was designed to make us more resilient and to be able to navigate difficult times, and so it's proven.
We've been helped this year, I think, this is the first half, by some early signs of improvements in the market conditions, and from the boost of the Euros 2024 football tournament, which has flowed through to revenues and viewing shares. And in Studios that, you know, we're a much broader, mixed economy in the enlarged studio business, and that's allowed us to benefit from more returning series, as well as winning high-profile commissions. And that remains a priority for us going forward and key to tapping growth opportunities internationally, as Simon was alluding to.
The board is very much focused on the stretching targets of revenue growth, cost reduction, and margin improvement that we've set right through to 2026, and I'm pleased to say that we're on track, and already making solid progress to deliver against those targets. We remain very excited about the future of the business and building the momentum to deliver for our customers, for our viewers, for partners, and for you, our shareholders. Going forward, though, as you know, there will be some changes at STV in the second half of this year, and before we meet again for the full year results. So what are those? Firstly, Simon Miller, who's served on the board since 2016 as our Senior Independent Director, our employee director, and latterly, as interim chair of the Audit and Risk Committee.
Simon has decided to step down in December, and I'd like to take this opportunity to thank him sincerely for his outstanding commitment to STV over the past eight years. His counsel and support has been highly valued by me and the rest of the board. This month, we welcome Colin Jones as a new Non-Executive Director and as Chair of the Audit and Risk Committee. Colin has a really impressive track record as a FTSE 250 CFO and over the past few years as a Non-Executive Director and Chair, and brings with him a great deal of media and financial experience to the board. I'm sure he'll be a real great addition to our knowledge and skill base.
But the big one, as we enter the next phase under new leadership, having announced that Rufus Radcliffe will join STV as our new CEO in November. Rufus was a standout candidate who I think really gets the culture of STV and brings with him a rare breadth of strategic and operational experience. We think he's a perfect fit to continue STV on its growth trajectory, and I speak for the whole of the company when I say we very much look forward to working with him, and I know he's looking forward to meeting each of you in due course. And finally, as you know, Simon leaves at the end of October. Simon has been exceptional.
His vision and tenacity and business nous has ensured that STV has not only survived, but has thrived during very challenging times of company restructure, of industry reset, of COVID, and of economic slowdown over the last six years. Simon led the successful transformation and diversification of STV into the dynamic business it has now become, and without which we simply would not have been able to deliver the solid results for shareholders we're talking about this afternoon. Simon's incisiveness, collaborative approach, and his integrity is matched by a real passion for the brand, the company, and the people he works with, and he'll be very much missed by the board and colleagues at STV. Simon, I'd like to thank you sincerely for your commitment to the company and wish you the very best of luck in your new role. But before you go, just one more thing.
We have some results to present, some questions to answer, so back to you for one last time, Simon.
Thank you, Paul. That is very much appreciated. As Paul says, this is my final set of results for STV, and it's been a real privilege to lead this business and serve STV shareholders for the last nearly seven years. We've achieved a lot together in that time, and the success of our transformation strategy, rooted as it is in digital streaming and in our ownership of valuable content, together with the strength of the foundations that have been laid for the future, comes through very clearly in the results we're presenting to you today.... So in a challenging economic climate, we've continued to accelerate the delivery of our successful plan and generated top and bottom line growth in the first half of 2024, increasing total STV revenues by 20% and adjusted operating profit by 33%.
Within that, our Studios revenue grew by 38%, bucking the trend in the wider global production market as new commissions swelled our forward order book to over GBP 100 million for the first time. Our streaming revenues through STV Player grew by 14%, while maintaining our strong digital margin. The advertising market improved markedly in the first half, leading to broadcast revenue growth of 12% and an immediate boost in broadcast profits of 47%. A highly successful Euro 2024 football tournament helped us to 13% growth in our total ad revenues across national, digital, and regional, and we're also expecting low single-digit growth in advertising revenues in Q3, although we remain cautious for the full year, not least due to tough Q4 comparators containing the Rugby World Cup from last year.
Our successful investment strategy in STV Studios continues to deliver tangible results, and we've today announced an incremental investment in Glasgow-based formats creator, Hello Halo, taking our stake from 30 to 51% in a deal that will be earnings enhancing for us from day one. On screen, our audience position remains very strong, with another record first half performance from STV Player, and our channel, STV, still the most watched in peak in Scotland for the seventh year in a row, both helped by Euro 2024, of course. Overall, we remain firmly on track to deliver the ambitious 3-year growth targets for the business that we set out back in March this year, and I'll provide more color on that in a bit.
Against that backdrop, a strong first half performance with a degree of caution over the U.K. economy in the second half. The board is recommending an interim dividend of 3.9 pence per share in line with 2023. Okay, over to Lindsay to delve deeper into the financial results.
Thanks, Simon, and hi, everyone. Looking at the key financials for the six months, first, total revenue at just over GBP 90 million was up 20% on the same period in the prior year, with all main revenue streams growing year on year. Total advertising revenue at GBP 52 million was up 13%, with national advertising up 16%, boosted by the Euro 2024 championships. Regional advertising was up 1%, with a strong performance by the core Scottish SME customer base being offset by declines from the Scottish Government. Digital revenues were up 14%, also benefiting from the football, and Studios revenue grew by 38%, driven by the acquisition of Two Cities at the end of January and the full year effect of Greenbird.
Adjusted operating profit for the period was GBP 10.6 million, up 33% on the prior year, with the operating leverage in broadcast driving profitability off the back of an improved ad market. Adjusted operating margin at 12% was one percentage point up on 2023. This trading performance, combined with higher interest costs, resulted in adjusted EPS of 15.5 pence, up 5% year on year. Total net debt was GBP 28 million at the end of June, slightly lower than the position at the start of the year. Moving to the group P&L, where you can see how all these highlights pull together into one page.
The intention behind our recent investments in production labels has been to build a portfolio of businesses with different dynamics that complement each other and bring to the group a portfolio of returning or returnable series and therefore a more stable P&L account. This strategy has proven out in the first half of the year, where the strong results in Two Cities and the full year effect of consolidating Greenbird have driven revenue growth in the overall Studios division year on year. Turning to interest, the average base rate and our average borrowings have both gone up in the first six months, year on year, with interest costs going up as a result. Roughly one-third of the increase is due to the higher average rate of interest, with the balance due to higher net debt, principally following the Greenbird investment last summer.
In terms of adjusting items, the single largest amount is a high-end television tax credit in relation to one of our drama production programs. This claim was made under the previous regime and so requires to be adjusted on the face of the income statement. For new productions that qualify for this source of financing, the new Audio-V isual Expenditure Credit will be claimed going forward, which will be recognized as an operating profit and therefore not require adjustment. So things will be a bit simpler going forward on that front. The other adjusting items relate to the integration of Greenbird, including a portion of the second and final earn-out that will be payable in respect of twenty twenty-four's performance, restructuring costs associated with implementation of the group's cost-saving program, and non-cash acquisition-related accounting items.
Turning to advertising revenue, the table on the left shows the year-on-year performance for each of the main advertising revenue categories by quarter. With the exception of VOD revenue, where performance was broadly the same year on year from Q1 to Q2, the other revenue categories also improved performance in the second quarter, principally buoyed by the football. We'd normally see our regional advertising outperform the national market, but the significant reduction in Scottish Government spend in the first half, down almost 60% year on year, has offset the 12% growth achieved in the core regional advertiser base. Our VOD revenues continue to benefit from ITV having taken over as national sales agent, with year-on-year growth broadly tracking ITV's in line with our agreement. The chart on the right demonstrates the seasonality of total advertising revenue.
You can see the dip in early Q2 this year, with revenues then building towards the end of the quarter, and June's total advertising revenue being the third highest month over the last two and a half years. In terms of the advertising outlook, we expect total advertising revenue for Q3 to be up low single digit year-on-year, boosted by the second half of the Euros tournament in July. In terms of the component parts, we expect national advertising to grow in Q3, with strong growth in July dampened by declines in August and September, and VOD revenues before commission are expected to be up slightly in Q3. For both these revenue streams, we expect the year-on-years to be impacted by the strong comparators, which included the Rugby World Cup.
Our regional business should also see growth in Q3, albeit the recent announcement from the Scottish Government brings some risk to the picture, as we don't yet know the impact of their spending cuts on campaign plans for the coming weeks. This chart shows the profit impact of the various revenue points I've talked to. We've shown the gross movements in VOD revenues so that you can see the incremental sales and then the commission as a partial offset. When we get to next year and the impact of the commission disappears from the comparator, we'll revert to just a post-commission measure for simplicity. In terms of the cost savings realized in the first half of the year, the end bar on the chart there, we're on track with our program announced in March, and we'll deliver at least GBP 1.5 million in savings in 2024.
Roughly half of this has been realized in the first half of the year through a variety of actions, including integration of Greenbird and consolidating our London team into a single office, streamlining operations across certain areas of broadcast and central functions, and bringing in-house some post-production activity. We've already started work on the next phase of savings targeted for twenty twenty-five and have a clear line of sight over the majority of actions required. Just a few words now in each of the divisions, and starting with Studios, where despite a very challenging commissioning backdrop, the division has grown revenue year on year and maintained a small profit for the first half.
One of the key impacts on the financial performance in H1 is the acquisition of Two Cities, which contributed GBP 18.5 million of revenue and GBP 1.4 million of profit since acquisition on the thirtieth of January. This includes revenue and margin in relation to Amadeus, which, although not scheduled for delivery until 2025, is what's called a producer- for- hire contract, with the associated revenue and margin required to be recognized on a percentage of completion basis over the period of production activity. This is helpful from a reporting perspective, as it avoids a potential cliff edge for recognizing profit if delivery dates slip, giving a smoother revenue and profit recognitions, which will help with guidance. Secondary sales have performed well in the six months, with the benefit of Greenbird's meaningful library of returning series IP coming through.
In terms of the profitability of the division, it's normal for the majority of the full year margin to be earned in the second half of the year, as that's when the majority of programs are scheduled for delivery. Looking back at 2023, the full-year profit of GBP 5.2 million was all delivered in the second half, with a double-digit margin realized in H2 against a first half of break-even. As we sit here in early September, we're starting to see those deliveries being made and the profits beginning to build. Touching briefly on the acquisitions we've made in the last twelve months, this slide summarizes the invested cash for both Greenbird and Two Cities. Taking Greenbird first, on the left-hand side, we've now paid GBP 23 million of the acquisition cash for the business.
Our return on invested capital is around 15% for the first 12 months of ownership, and so in excess of our WACC, albeit probably slightly lower than we expected a year ago, given the market backdrop and the impact that's had with few new commissions being awarded. In the table on the right, we've shown similar information for the Two Cities investment, where the return on invested capital, reflecting all investment costs to date, is around 20% for the first five months of our majority ownership. As the commissioning market hopefully comes back over the coming months, we'd expect to win our fair share of new commissions being awarded and for the right metrics to benefit. Moving to Digital, where the division has continued to perform strongly, maintaining its profitability in the first six months of the year.
Total VOD revenues are now around 75% of the division's total, following a period of strong growth, with them up 12% year on year in the first half. We expect the rate of year-on-year growth in VOD revenues to slow down over the second half with tough comparators. Margins will come back a little with incremental investment planned in third-party content, but overall, the picture should remain strong for the full year. When we were talking about the broadcast performance for 2023, we were at a low point in the profitability of the division, brought about by the broader macroeconomic environment and its impact on advertising revenues. But we made the point that the operating leverage of the division was such that even modest increases in advertising revenues would have a significant impact on profit and margin.
Roll forward six months, and that's exactly what you see on the slide here, with a 12% increase in advertising revenue translating to a 47% increase in profit. In addition to the margin benefit from the higher advertising revenues, we're also realizing cost savings in line with our plans. Turning to the cash flow and Net Debt, there's always loads of talking points here, so I've taken a slightly different approach this year and included the detailed cash flow statement in the appendix. This slide aims to explain a bit more of the complexity working its way into our banking arrangements these days, as we engage with more and more commissioners and require different sorts of financing for production activity. Nowadays, in addition to our core RCF, we also have non-recourse production financing debt and ring-fenced cash advances from commissioners.
Starting at the left-hand side of the table with the balance under our RCF, which is the core net debt of the business, essentially. This has increased by GBP 7 million to GBP 36 million at the half year as a result of the incremental investment to increase majority stakes in two of the Greenbird businesses, plus the investment in Two Cities. The operating cash generation of the business covered all other cash flows, so CapEx, interest, tax, pensions, dividends. Net operating cash conversion in the first half of the year was well above 100%. Against this RCF measure of net debt, our leverage at the half year was slightly up on the full year to December 2023, at 1.4 times, well within the covenant maximum of 3 times. The other columns for non-recourse production financing and ring-fenced cash relate specifically to individual programs in production.
For the third-party debt, the providers of the finance have no recourse back to the STV Group in any event of default, and the ring-fenced cash can only be used for the specific program to which it relates. So they don't really form part of the debt of the group, and we'll pull these balances out for you going forward. The only other point to touch on is the refinancing that we're in the process of kicking off, with the aim of completing early in 2025, and certainly in advance of signing off on our 2024 annual report. Lastly, a few words on pensions, where the accounting deficit of our defined benefit schemes is reduced to GBP 45 million at the half year, down 17% on the December position, reflecting an increase in the discount rate and cash contributions paid over the period.
The relationship between the Company and the trustees has much improved over recent years, and this has borne fruit in the quality and tenor of discussions around the 2023 triennial valuation. I've been consistent in my messaging that my aim for this valuation was for the Company contributions not to go up, and that's remained my priority. We've made good, good progress with the trustees and are now in the final stages of reaching agreement, and I'm confident we'll have some positive news on this in relatively short order. Okay, I'll stop there and let you take a look at our showreel to see what we've been up to in the first half and what you've got to look forward to over the next few months.
Don't you know I could do this dance all night? Ooh, what you do- Hello, everyone. Hello. Don't know who you think that you're pretending- Is this something that can go out on television? This isn't Made in Chelsea meet. You don't wanna look like dibbies. You think I'm gonna fall for it. Stand back! Kerry and Martin. Olly Murs . This is emotional.
nine eighty, GBP 10.
Wow.
If we auction this, we're gonna go halves on the profit.
Oh, well, I think it's gonna be a good day.
You're amazing.
Welcome to Beat the Bridge. She might have worked. I don't trust that guy. I just threw him. We want our case back. Go get it. Conflicted about whether it's okay to like Too Fat Basics. 'Cause, you know, he was a troubled character. Welcome to Bridge of Lies.
I want to understand what makes a scandal.
It's some of your best work, honestly, Bob. I really know your type. Tom, what are you doing?
What am I in the middle of?
How do marriages blow up like that? Well, that's good. What you do. Come here if you can! Mark my words, the house is ready. Big Brother is waiting. You think I'm gonna fall for another... We're just skint little people. Feels quite good to be Scottish at the moment. Theresa May. Let's get on with it. It's time for our first question.
Your son's been found.
Oh, my God!
It's decision day for millions of voters across the country.
This election is about change. It's about getting rid of the Tories. The U.K. is a different place today. Party time! How do I address you? Try curtsy. Curtsy. Can we? Oh, perfect. It's been thirty-seven years since we've been on a date. Cheers.
I think you might know things no one else knows.
The closer we get, the less it makes sense. Take my heart, don't break it.
This week on STV, we are all about sustainability.
Come on! All this time I've wasted. You were right there all along.
So there we are. You can see it was another big six months on screen for us. Mr Bates vs The Post Office, a successful Euros from Germany, a general election, and a burgeoning number of new STV Studios shows on a range of networks and streaming services around the world, with plenty more to come in the second half of this year, crucially. As you know, over the last few years, we've laid strong foundations for the next phase of STV's growth. Firstly, reinvigorating the core broadcast business by overtaking and then putting clear blue water between us and our main audience rival, BBC One, as well as launching our innovative STV Growth Fund to attract hundreds of new Scottish advertisers to TV for the first time.
Then, building strong growth pillars for the future through our fast-growing streaming service, STV Player, and our production arm, STV Studios, which is now a highly successful network of 20 production companies making big shows for the best in the business.
... Phase two of the transformation is about accelerating that growth. And back in March, we set out refreshed strategic objectives for the business, which reflected how viewers and advertisers are increasingly behaving, focused on content creation, total audiences, monetization, and the organization we need to become to make the best of each of those opportunities. Our new objectives are to accelerate our U.K. and international studios growth, to drive streaming growth and maximize total STV viewing across both broadcast and digital, maintain our advertising leadership, as well as growing new profitable revenue streams, and modernize and simplify our business for a digital-first world. Alongside those objectives, we also set new, stretching, three-year financial targets for the group that will make us an even more balanced, profitable, and internationally focused business by twenty twenty-six.
Doubling Studios revenues to GBP 140 million, with a target to achieve a 10% margin, driving our digital revenues by a further 50% to GBP 30 million at a margin of at least 40%, growing international revenues to at least 15% of group revenues and 25% of Studios, while at the same time achieving a further GBP 5 million a year of savings in our cost base by simplifying and modernizing our business to set us up to compete. And I'm pleased to say that we're firmly on track to meet each of these targets, as today's results illustrate. We're also making good progress against our new KPIs that underpin the strategy and the targets as we summarize on this slide. In content, we're growing our number of returning series, the proportion of our shows with IP revenues attached, and our international revenues.
In audiences, STV remains number one for commercial share. We continue to grow our reach and streams through STV Player, and we'll be focusing in particular on growing monthly active users in digital over the coming years. And you can see against our monetization KPIs that we're still on track against the important metrics of new advertisers and rebooking rates, with a renewed focus on growing our paying subscriber base in this next phase of the plan. As we said back in March, we'll report on these regularly going forward to give a sense of our strategic progress. Moving to slightly more detailed updates on our key objectives, and first up is content and our Studios business, where we continue to make excellent progress.
As you know, we see huge growth potential for STV Studios, and in recent times, we've started to deliver on that potential with significantly improved financial results. That's despite the difficult economic climate that has persisted in the wider TV market and the reduced spend we've seen from some of the bigger players, with a result that smaller production companies have really struggled over the last couple of years. We're not immune from those market conditions, of course, but our growing scale and the resilience that comes from now having dozens of returning series in our portfolio, means that we've been able to continue to grow in spite of the market. There are also more encouraging signs that the commissioning sector is starting to recover, with Channel 4 recently saying that their program spend returned to pre-COVID levels in the first half of this year.
Our focus continues to be on growing our reputation in what we see as the most important market segments. Premium scripted, where we now have four major drama shows in production with some of the biggest players. Returnable, unscripted shows and formats, where we have 34 returning series and a number of new returnable shows on the way. And international, where we already have traction with the likes of Lego Masters, Amadeus, and Bridge of Lies, but which is more and more of a focus for us, given the size of the market opportunity. Our Studios vision, we think, remains as relevant as ever. We're becoming a world-class producer for the biggest networks and global streamers, and closer than ever to our goal of being the U.K.'s number one nations and regions production company by turnover, profit, and reputation.
With that goal firmly in mind, we were delighted to confirm our latest Studios deal this morning. We've made an incremental investment in Glasgow-based formats creator, Hello Halo, increasing our stake from 30%- 51% to assume majority control of what is already a profitable business. Hello Halo was founded by highly respected producer, Wendy Rattray, and focuses on factual formats, but also on children's shows and on natural history programming, where we don't have a strong presence at the moment in Studios, and so this investment complements our existing portfolio of genres very well indeed. Hello Halo makes shows like River Hunters with Rick Edwards and My Life in the Wild with Hamza Yassin, as well as kids series, Dog Squad and Junk Rescue.
They've just secured an exciting new crafting format called The Game of Wool for Channel 4, which is set to launch later this year. The structure of the deal with Hello Halo is a familiar one for us, where there are puts and calls in place for the remainder of the equity, which reward profitable growth. Even though the upfront consideration paid for the additional 21% stake is relatively modest, the investment will be earnings-enhancing for STV in 2024, with a strong return on invested capital expected in the short term, given the strength of Hello Halo's portfolio of commissioned series. This latest investment also underlines the value of the M&A strategy we've pursued these past few years. We have deliberately targeted not just majority stakes in larger businesses, but minority positions in companies we believed had real future potential.
Like drama producer Two Cities, who had no commissions when we acquired a 25% stake in 2020, but when we converted our option to take majority control earlier this year, had two huge drama commissions in Blue Lights and Amadeus, and subsequently delivered nearly GBP 20 million of revenue in the first half of this year alone. Our acquisition of Greenbird Media last summer, again, gave us both an immediate earnings uplift from the majority-owned entities in their portfolio and the option value of the minority stakes they held, which we again hope to convert to majority as they grew their success in future. That has proved.
As you'd expect, we've spent some time over the last few months reviewing the creative labels in our newly expanded portfolio to focus on those with the highest potential, which we define as production houses that can create returnable, internationally focused, higher budget formats, and the result of that review is set out on this slide. To the left, the original majority-owned labels pre-Greenbird. Next to that, the five labels where we've been proactive in increasing our stakes over the last few months. The previously mentioned Two Cities, Tuesday's Child and Crackit, where we already held majority stakes, but where we've been delighted to increase our positions as these producers have continued to grow. Rumpus Media, which continues to win new shows in the comedy entertainment space, and Hello Halo, which we've announced today.
The middle right box contains the ten minority stakes, which we still consider to be high potential. We also said at the time of the acquisition last year, that we didn't expect every producer to be successful, and in the far right box are the four labels that we've now parted company with following our review, taking the overall number of production companies in the STV Studios portfolio to twenty. This portfolio of companies continues to perform really well, securing thirty-six new commissions and recommissions so far in twenty twenty-four, despite the challenging market conditions, including a number of high-value wins like the ones featured on this slide. A second series of Criminal Record for Apple, a huge new international drama for Sky, Amadeus, two new series of Blue Lights for the BBC, not to mention our first drama commission for Netflix called The Witness.
It's rare to find a big-budget entertainment hit, and so we're delighted that The Fortune Hotel is reopening its doors for Series two on ITV in 2025. Our U.S. version of Bridge of Lies, Beat the Bridge, is performing well stateside, and our Auction House franchise gets bigger and bigger for Discovery. All of which means that our Studios' forward order book, the metric we introduced earlier this year to provide further visibility around the health of our Studios business, is stronger than ever, and for the first time, stands at over GBP 100 million of secured future revenues.
As you can see on the chart, since we last shared the metric back in June, when the total stood at 86 million, we've added a further 34 million of new commissions, with 19 million of programs either being delivered or having their revenues recognized in that period, resulting in a new total of 101 million. That's 75 million pounds higher than it was only two years ago. Overall, we're really pleased with our progress in Studios, and I hope you're getting a strong sense of the team's excitement and ambition here. We have a clear vision and strategy, and our target is very deliberately both U.K. and international growth. Turning now to our audience objective to drive streaming growth and maximize total STV viewing across both broadcast and digital.
Another reminder that despite Netflix and Disney Plus and Amazon, broadcast channels and their streaming services still dominate video viewing to the extent that, according to Barb, the average Scot watched nearly five times more broadcaster content on a TV set in the first half of 2024 than they did SVOD content. Over three hours a day for broadcasters versus 38 minutes for the SVODs, with 66% of all TV set viewing going to the broadcasters in the first 6 months of the year, up 2% on the equivalent period in 2023.
And on the right-hand side, respective forecaster Enders are saying that they expect broadcasters to continue to dominate viewing share on TV sets out to 2030, with YouTube growing, SVODs like Netflix plateauing, and broadcaster on-demand services gaining back a good proportion of the inevitable volume losses suffered by their linear TV channels. Again, this speaks to the resilience of the broadcaster business model. In Scotland, our audience position relative to our competitors is as strong as it's been in my time at STV. We're still the most popular peak time TV channel for the seventh first half running, and now way ahead of BBC One, the reverse of the situation in England, where BBC One leads ITV One.
Our flagship News at Six is now the most watched news program of the day in Scotland by nearly 100,000 viewers, a third bigger than BBC Reporting Scotland. But it's our audience performance versus our commercial competitors that matters most, of course. All of our competitors, that is, including the likes of Netflix and Disney, who now carry advertising for some of their subscribers only. And there, I'm pleased to report that STV and STV Player combined is still the clear number one on TV sets, nearly double the size of Netflix, with our lead over them growing by one share point in the first half of the year, and we're also four times bigger than Channel 4 and Disney. On the right, what we're also seeing as streaming grows is the reach of STV Player growing as a percentage of total STV reach.
We connect with 3.36 million people each month, and that gives us a huge Scottish audience and a big competitive advantage because, of course, we can convert those STV viewers to be digital viewers on STV Player. As a result, you can see on the right-hand side that STV Player is already 39% of our total reach and growing, with the target of our streamer delivering 50% of our total reach by 2026. Looking at our digital performance in a little more detail, and we had another record first half for STV Player in terms of streams. The simple goal remains to be more attracting more people, watching more content for longer, because we know that that translates into more financial success.
Active registered users were up an encouraging 33% across the first half, with VIP users, those who watch the most STV content, up a further 19%. That translated into a more modest 4% increase in streams and a 5% decline in total online consumption, with both figures impacted by a changing audience mix in the first half, where we had fewer drama box sets, but more live sport, although that didn't impact financial performance, with digital revenues up 14% and profits maintained at GBP 5 million. In part, it was that different audience mix that underpinned the good revenue number we saw. We still delivered strong viewing volumes, with 8 titles achieving 1 million or more streams on STV Player, double that of H1 last year.
But we also saw live viewing jump 33%, 18-34 streams grow by 35%, and male streams by 23% as a result of a huge increase in live sport, driven by the Euros, of course, and all that helped to sustain and grow the digital premium paid by advertisers in the first half. Now, we can't just rely on shows coming through the ITV partnership. Key to our digital growth over the last few years has been an increasing portfolio of third-party content, and that continues to be an important part of our strategy. We've acquired thousands of hours of high-quality shows to bolster our streaming proposition for viewers, much of it on a revenue share basis to reduce our commercial risk. And our latest notable deal is a two-year agreement with Disney to secure 10 drama series from the U.S.
The first three have launched and already amassed over three million streams, and the encouraging news here is that nearly a third of people who have watched one of the Disney dramas have gone on to watch another on our platform. We've also got plenty more stellar content to come in 2024 with Series Three of acclaimed drama, The Tower, launching last night, six-part drama, Joan, starring Sophie Turner of Game of Thrones fame, the return of UEFA Nations League football, and another series of the sleeper hit reality show, My Mum, Your Dad, which I thought was as touching to watch as it was slightly cringey.
The next area of focus for us under our newly refreshed strategic objectives is the effective monetization of all of our viewing, and here we know that we have a market-leading commercial offer for advertisers, a one-stop shop for brands, combining the unrivaled mass reach of national advertising with our uniquely powerful local advertising platform for Scottish SMEs, and now also a highly targeted digital advertising capability via STV Player. No other media owner offers that breadth of proposition in Scotland, and no one comes close to matching our scale as the graphic on the right shows, with 99% of the top commercial audiences in Scotland on STV in the first half of 2024. 495 of the top 500 programs. The other five that weren't on STV were all episodes of Bake Off on Channel 4.
And indeed, no other event showcases that dominance better than Euro 2024, which was a major success for us. Huge audience numbers, as we expected, with streams up 61% on the last Euros, and our average viewing share three points up on ITV, even though Scotland didn't make it out of the group. Those audience numbers translated into tangible commercial success. 350,000 lapsed STV Player users were reactivated during the tournament, with about 160,000 of those, or 46%, going on to watch something else on STV Player since.
National advertising revenue was up over 80% in the month of June, and local brand count was also up over 80%, partly because we used the halo effect of the Euros to bring in lots of new local advertisers, showcasing dozens of local brands in our unique Come On Scotland advertising campaign across the tournament. It worked commercially, but it maybe didn't work for the team. Over the next couple of slides, we'll break out the performance of national and Scottish advertising in the first half, and this chart defines national as linear plus VOD, as both are now sold for us by ITV, as you know, under our long-term partnership. You can see that we had good category growth across retail, across entertainment, food, and household stores, in particular, offset a little by lower finance, telco, and government advertising.
That all translated into excellent national linear advertising growth of 16% and national VOD growth of 12%. The linear outperformance explained by its relative weakness in recent periods, but also the fact that the Euros was primarily a live linear event, delivering huge audiences to broadcast TV. Our digital brand count also continues to surge ahead, up 75% on last year, another benefit of our enhanced advertising partnership with ITV, where we are now fully integrated into ITV's automated sales process through Planet V. Turning to Scottish advertising now briefly, where we remain the market leader by some distance. Total regional advertising got back to growth in the first half, up 1%, despite continued declines in Scottish Government advertising, which now makes up less than 10% of our local spend.
Conversely, Scottish SME advertising was up 12% for the period, with encouraging growth in rail travel, particularly ScotRail, energy services, and B2B advertising, as you can see from the category chart on the left. Performance was obviously buoyed by the Euros, with increased activity from big brands like Tennent's and retailer Scotmid Co-op, alongside our Come On Scotland and Good Luck Scotland initiatives. Encouragingly, we also saw regional VOD advertising continue to grow, up another 13% in H1, with 60% of our local brands now combining both VOD and linear spot advertising together, up from half last year and a third of our advertisers in 2022.
Across the bottom, you'll see our advertising growth fund continuing to do its job, making TV advertising more affordable, more accessible, generating a healthy influx of new advertisers, over 400 since the fund launched, the majority of whom going on to become repeat clients, another of the KPIs that we track regularly. In terms of the outlook, we can certainly report an improving picture so far this year, although there is inevitably still caution around the rest of the year and beyond, given the continued macro uncertainty in the U.K. But we've delivered strong total advertising growth in the first half of 13%, and we expect Q3 total advertising to be up low single digits, driven by a good July, thanks to the Euros.
That should translate into overall growth for the full year 2024, although Q4 has the added headwind of a Rugby World Cup in the 2023 comparator, which will inevitably weigh on the year-on-year performance. The Studios outlook is also positive, with our strongest ever forward order book and GBP 34 million of new commissions secured since June. And overall, that should translate into an improved revenue and profit performance for Studios for the full year, which would be a terrific result in the current muted production environment. And as Lindsay said earlier, we're on course to exceed our 2024 savings targets of GBP 1.5 million, and we have a good line of sight to the run rate of GBP 5 million in annual cost savings that we're targeting by 2026, as we simplify and modernize our business for the future.
That is literally it from me. Now, I know I'm biased, but I think STV is very well placed to accelerate its growth from here. We're a much stronger company, strategically, creatively, and commercially, but also culturally. That's something you can't measure with numbers, but does bode well for the future. We've also created core growth areas in digital streaming and in Studios that are now flourishing and set to be the cornerstones of STV's future success. I've always said that our broadcast business is more powerful and more resilient than most commentators would have you believe, and its audience and commercial performance over the years, this year included, continues to support that theory. Our first half numbers illustrate all of that in a nutshell, with strong top line and bottom line growth delivered across the group despite the challenging environment.
Overall, we have strong foundations in place, a first-class team with real ambition and drive that I cannot speak highly enough of, and we've made a fast start against our stretching new financial targets for 2026. That will give new CEO, Rufus Radcliffe, a good platform to take forward when he starts on the first of November. I worked with Rufus at ITV. He is a great hire, and I think the company is in excellent hands. Thank you all. Lindsay and I will pause there for your questions. Okay, let's go to Roddy first. He's politely got his virtual hand up.
Thank you. Thank you very much, Simon. Thanks for the presentation. Perhaps just start with two questions, both on the Studios business, if I may. Just wondering if you could perhaps elaborate a little on how you see the environment for content acquisitions, particularly given remarks and, you know, widespread reports about the difficulties facing some of the smaller producers, but also in that, if you could also touch on talent deals, and looking in-house, just be really interested to know whether or what we should perhaps expect to see, coming down the track in terms of further increases in minority positions or indeed, majority positions within your portfolio, and interested whether there are any others that are still under review and that you could possibly exit. Thanks.
Thank you, Roddy. Well, look, it's certainly been a difficult period for producers, difficult for the freelance community, who are the lifeblood of the creative industries. We aren't immune from those market conditions, of course. We'd have loved to have delivered even greater growth in the first half of this year. But you can see in the numbers that it's our scale and growing resilience that comes from now having dozens of returning series in our portfolio that means we've been able to continue to grow despite the market. That's about securing, you know, high-value recommissions and new commissions, 36 so far this year, which is strong. Big returners like Bridge of Lies and the Yorkshire Auction House and Criminal Record, which is a huge one, obviously, for us, for Apple.
Also, some new format commissions, including from our latest incremental investment, Hello Halo, a big show called The Game of Wool. Crafting is a big deal, as everyone knows these days, and that's an interesting new show. It has been encouraging in the first half of this year that the ad market has come back in the way that it has, up 13% for us. Of course, the U.S. writers strike is now behind us, which is a good thing. Both of those factors, I suspect, will have a positive knock-on impact in the commissioning market in the future. It will take time, though, because the market has taken you know, a bit of a pounding in the last 18 months or so, but there are more encouraging signs.
We're hearing more broadcasters put their head above the parapet and talk about program spend coming back. We heard the Channel 4 bosses saying that at the Edinburgh Festival a couple of weeks ago, that their spend in the first half of this year had returned to pre-COVID levels. But the biggest barometer of all of this is, of course, our economy, and should we get better news on a long-term basis about the economy, then both the ad market and the commissioning market will benefit. One final comment on this, on the long-term demand for content, because I still think that is extremely strong, both globally and in the U.K. There will always be good demand for high quality shows, particularly drama shows, particularly format, entertainment, and factual.
I think some of the smaller, lower budget shows are falling between the cracks a little, and that's why our focus increasingly is on bigger shows, higher volumes, higher budgets, international potential. Which sort of takes me on to your second question, Roddy, about our portfolio and talent deals, and we will always keep looking at talent deals in our business because that is the lifeblood of our business, working with the best creative talent, be they producers or writers or directors or format creators. We wouldn't rule out doing more deals in future, but that will be a matter for the board and the new CEO.
You can see how well that strategy has served us over the last few years and in our numbers for the first half. We said when we completed the Greenbird acquisition, that our focus would be on the labels in our existing portfolio, 'cause there were so many that had potential to grow, and so it's proved. In quite short order, we've done five incremental investments within that portfolio, taken to majority a number of producers, including Two Cities and then Hello Halo today. We have another 10 minority stakes. I'm not going to predict now which one of those is the next one that we will take to majority in succession, but I suspect there will be others.
And you can see whether it's Two Cities or it's Tuesday's Child, or it's Crackit or Hello Halo, that each of those has managed to contribute positively to our earnings, as we've consolidated them, and that's certainly been the strategy all along and is starting to pay dividends. Okay. Thank you, Roddy. Jonathan Helliwell has his hand up as well.
Hello. Hello, Simon, and, congratulations on a great innings at STV, I have to say. A couple of things I want to ask you, though, before you disappear. The first is just on continuing on this theme of acquisitions. You're putting a lot of emphasis, a lot more emphasis now on international side of Studios. So would that be limited to just exporting U.K. programs, U.K. formats, or would you be interested in, you know, feet on the ground and acquisitions internationally, or you or your successor? And then I think the second thing is just, which might be more for Lindsay, going back to this producer- for- hire contract, which ...
Is that something that's very much a one-off to do with Amadeus, or is it something we might see more of coming into the mix and therefore seeing a smoother revenue progression out of that in Studios over the medium to long term?
Lindsay, do you want to answer that one first, and then I'll come back to Jonathan's first question?
Sure. So, they will be less common, I think, Jonathan. So these will predominantly be the larger streamer commissions, where we agree up front to sell all rights associated with the program, and so therefore, for the period of actually making the program, we are a producer- for- hire in the context of accounting standards or whatever. So, I think it will be a good thing. The majority of our revenue in terms of commissions, in terms of number of commissions, will continue to be on delivery, because we will continue to hold the IP, and then have access to the secondary market and all the higher margin revenues there.
But for the high value, but potentially lower quantity of commissions that are these producer-for-hire, it will be a good thing because we will not have this cliff edge that could happen if delivery dates move. And you'll know that we've said in the past that one of the challenges that you can have is that commissioners change when they want to TX something, which means they change when they want to take delivery of it, which then can have a knock-on impact on us. So it's relevant for Amadeus, it's relevant for most of the streamer commissions, where you're selling the IP rights up front, but it probably allows us to foresee a smoother trajectory, if you like, through the next two or three years, rather than arguably trying to predict when big lumps of revenue and margin might fall. That help?
... Yes, thank you.
On international, Jonathan, you're right, that is intended to be a bigger part of our story over the next few years. You know, our target is that 15% of our group revenues should come from international by 2026, 25% of Studios revenues. And that can come from a number of areas. Firstly, as you say, selling finished tape, so finished shows, you know, like Antiques Road Trip and Taggart and previous drama series, selling them internationally, which we do very well at the moment. Secondly, remaking one of the shows that we've created in other territories. So, a good example of that is Bridge of Lies, where we own the format. We made it for the BBC, and now we make it in Spain.
We've just made a U.S. version for Game Show Network in the States, a hundred episodes or so. We make twenty different versions of Lego Masters around the world, including the States and in China. And we want to do more of that going forward. And our teams are constantly thinking not just about ideas that will work in the U.K., but will work internationally too. And I guess the third area is working with those international networks and streamers on the big shows that have instant international distribution and appeal, like Criminal Record, which launched simultaneously in a hundred different markets for Series One. There is real potential there.
We think we have a growing catalog of shows where IP revenues are attached, and you can see we've set out a further KPI attached to that, that we want three-quarters of all our Studios hours to have secondary revenues attached to them, not just money made from the first transmission by 2026. We currently have about 500 hours of shows in our catalog, which we license around the world. That number has been increasing as the years go on. It was 150 in 2021. It's 300 in 2022, 500 in 2023. That is a key metric for us going forward, and we see no reason why you know a smaller production group headquartered in Scotland can't be making big, successful shows that are played out around the world.
We've proved that with a few shows. Now it's about proving that at scale.
Thank you.
Thank you, Jonathan. Hello, Fiona.
And first of all, can I say, we wish you, we all wish you the very best in the next stage of your career?
Thank you, Fiona.
So first of all, can I ask about the power balance and the environment in pricing in the commissioning business at the moment? Has there been any shift, and how do you see that playing out? And my second question was just about... You've talked about the effect of the football in the first half. Was there a noticeable impact from the Olympics, that we'll see in the second half? And my last question is one that I've asked you many times before, and that's, we now have a new Secretary of State for Culture, Media and Sport. A lot of the things that you've had on your shopping list for previous occupants of that chair have now come into being.
What would you like from this new government?
Oh, good questions, Fiona. Thank you. Look, the power in the commissioning market has always been in the hands of the commissioners. Whoever holds the budget holds the power, and budgets have been reducing in the last couple of years due to the factors that we all know. And so, I'd argue that they've almost got even more powerful there. And conversely, costs have increased, whether that's labor costs or it's raw materials or it's travel. And that has caused some tension, it must be said. And, you know, whether it was COVID or it was cost of living, or it was other reasons for, you know, gas and electricity prices increasing, we have found ourselves, as a producer, having many more conversations about the budget up front. But that's what you need to do.
We are not a production business that takes huge gambles on deficit funding shows, you know, green-lighting them and then making them and then seeing if someone will fund it. We don't do that at all. We fully fund our shows. We have those difficult upfront conversations with the commissioners, be they streamers or local broadcasters to fund the shows. Sometimes the initial license payment from a BBC or an ITV or others won't be enough to fund the show, and we will go out to do a deal with a distributor. We obviously have the benefit of the tax breaks in the drama world, which help us, but we do not green-light that show until we are confident that it's going to deliver a return on investment for us.
So yes, those conversations are getting more difficult because times have been tough and continue to be, but we're very disciplined in what we make and don't make. We're also very disciplined in what we develop and don't develop, because we want shows that both are going to make us money from the initial commission, but also have potential to make us money in those secondary markets in the U.K. and internationally, as we were saying. Your question about sport, spot on. The Euros was great for us, really great for us and helped to reinforce the power of broadcasting, I think. So every so often, you'll see an article about Netflix taking over, and then something huge will happen, like
Mr Bates vs The Post Office or the Euros, which reminds you that, you know, broadcast TV is alive and kicking and can really affect change. Euros has been great for us, and then when the Euros were finished, we always knew that people were gonna switch over to the Olympics, because we've been here many times before, and so they did, and I'll admit that I may have done, too, because it was terrific, but the important thing there is that we're not competing with the BBC for advertising money. So there wasn't an option for our brands to get exposure around the Olympics. They can't do that, so they had to keep their powder dry.
We normally see a slightly tougher market in August time because people are away and agencies are away, and so it's proved in the latter part of Q3. But we've got a really strong lineup for the rest of the year. As I say, we can't predict what Q4 will be like. We expect it to be tougher, but overall, we're hoping that the year will be good in advertising terms. The Secretary of State and the new government, well, the first thing we want is, having now got the Media Act, which is so important, and we've been waiting for several years. The last act was in 2003. It's been a while. We need it to be implemented quickly.
So that's the job of the regulator Ofcom that for the remainder of this year and next year, I think we'll be consulting on various parts of it, and we would like that done speedily so that we get security of tenure and prominence for STV Player on those platforms. We continue to argue that there should be as many interventions and stimulus measures to promote production in the nations and regions as the government can manage. They have renamed Levelling Up, haven't they, this new government? But it amounts to the same laudable aim, which is that, you know, audiences wanna see content that reflects their lives. That means making shows where people live, and that will be good. In Scotland, we've seen more and more returning series.
We need to see more than that, and I... You know, there are tax incentives that could match the likes of the high-end tax credit for drama and stimulate nations and regions production. I'd like to see the government looking at that in particular. Mostly, though, I'd like the government to help us to get the economy racing. That's what everyone wants.
Yeah. Wouldn't we all? Thank you.
Okay. Who else would like to ask a question? Or who has already asked a question that would like to ask a follow-up? You'd be very welcome to. Okay, we may have just talked you into submission.
Simon, it's Jonathan Barrett. Sorry, I was mute. Can you hear me?
We can hear you, Jonathan. Hello.
All right. Thank you. Sorry, I have a few issues with Zoom today. I just I know that the Studios topic's been sort of gone through quite heavily today already, but I wonder if you could talk us through whether or not you look at North American expansion from a physical perspective to give yourselves a bigger footprint in the key U.S. market, or whether you feel as if you can operate out of the U.K. and take advantage of that from here.
I'm glad you asked me that, Jonathan, because the other Jonathan asked me that, and I failed to answer it, so thank you for that reminder.
Oh, did he? Okay.
No, that is good. Thank you for that reminder. Look, we have a clear plan with our international growth strategy, and that is around selling our finished shows, remaking formats that we own, and partnering increasingly with international streamers and networks, and there's lots of growth we think there. But you're right. The natural next step for most production groups is then to look at which big markets you can set up in, and the reason you might do that is because you then don't just get a format fee or a commissioning fee, you might also get a production fee and make the show yourself if you've got boots on the ground and a team that you can enact quickly.
All I would say there, and that will be for the teams to take forward, is that it's, in my experience, better to be cautious there and to be led by hit shows. Setting up bases in the U.S. is attractive because they're the biggest market, and we have the serendipity of the same language, and there's huge potential. But it's also an easy way of losing money unless you have hit shows that you can build on. And where I've seen it done well is where a producer. One example might be the BBC with Strictly Come Dancing, Dancing with the Stars in the US. When you have a runaway hit like that, setting up shop to make it and keeping more of the profit yourself on that show is ...
Makes good sense. But setting up just for the sake of it and hoping you might win commissions just by having people there, feels less clever to me. So, I think it is a natural next step for a production group like ours, but, I think we're likely to be cautious about it and be driven by the success of our shows.
Thank you, Simon.
All right. One final call for questions? All right. As I said before, it's been an absolute privilege to, to be at STV, and I thank you very much for all your engagement and partnership, and I wish you all the very, very best for the future. Thanks, everyone.
Bye!