The Commission, set up to investigate the current state of television production and broadcasting in Scotland, said SMG is making a claim for public funding, which it says is necessary for it to produce local public service programmes.
But SMG warned it will only produce Scottish programmes after the digital switchover if it makes commercial sense to do so. Its TV unit, STV, said Scottish-origin programmes currently account for 6.5% of its schedule, costing £10 million per year to produce.
Like Channel 4, which has requested further government funding after digital switchover, SMG is arguing that it also requires financial assistance post-digital switchover in Scotland (in 2011) to fulfil its public service duties.
Currently, STV is obliged to produce four hours per week of non-news Scottish programming, reducing to three hours per week from the start of 2009.
But the Commission warned it was concerned by SMG’s evidence, and claimed STV is “perceived to have declined not only in terms of its volume of Scottish [programming] output but also in respect of the range and quality of programmes”.
Rob Woodward, SMG chief executive, told the Commission: “If there are ways of funding [public service programmes] then we would happily go beyond our existing requirements [to produce Scottish programmes]. But only on the basis that there is a commercially viable model.”
An STV spokesman said: "STV is committed to growing a vibrant and dynamic broadcast and content business and creating compelling content is at the heart of all our plans for the future. We are pleased that the Commission recognises the nature of public service broadcasting is changing. Obligations on commercial broadcasters must be considered because the current model is not sustainable."
The Commission said it would now examine the possibility of funding a new Scottish digital channel and local television services.
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