C4 scraps radio plans
- Published: 10 October 2008 10:42
- Author: Robin Parker
- More by this Author
- Last Updated: 10 October 2008 13:09
- Reader Responses
Channel 4 has scrapped its plans to enter the commercial radio market, with the loss of up to 15 jobs.
The broadcaster said the move would save up to £10 million in 2009, a fifth of next year's savings target.
C4 had planned to launch three national digital radio stations on the DAB platform – youth music station E4 Radio, speech-based Channel4 Radio and Pure4, a mixture of speech and music aimed at 30 to 49 year-olds.
The broadcaster has now pulled out of the 4 Digital Radio Group, in which it was a majority shareholder. The consortium now comprises Bauer Digital Radio Limited, Carphone Warehouse Group plc, Sky News Radio Limited, Global Radio Ltd, UTV Radio (GB) Limited and UBC Media Group plc.
The group won a 12 year licence to provide 10 new digital stations for the second digital radio multiplex in July last year and E4 Radio was originally scheduled to launch in July 2008.
Ofcom said it would meet the other members of 4 Digital Group over the next few days to "discuss how they propose to take matters forward".
The regulator has already begun discussion with other multiplex operators and the BBC "to consider how best to secure a viable outcome which is in the interests of radio listeners and the industry".
National Grid Wireless, which lost out to 4 Digital Group in the tender, could potentially revive its bid, which was supported by the likes of GCap, the BBC, Digital One, RTL, Premier Christian Radio, Somethin' Else, Fun Radio and Colourful.
C4 chief executive Andy Duncan said he made the decision to exit the radio market "reluctantly" as part of a wider efficiency drive to shave £100 million from C4's budgets over 2008 and 2009.
Its only remaining major new business investment is video-on-demand service, 4oD, which is due to combine into Project Kangaroo, the UK VOD joint venture with BBC Worldwide and ITV.
"We've pursued our radio plans in good faith and continue to believe DAB has a strong future and that we could make a return from radio in the medium term," he said.
"Frustratingly, our plans have been overtaken by a drastic recent downturn in our revenues and we will have to forgo this future profit stream. We can no longer afford the short-term investment necessary given that we are having to cut so deeply across all parts of the organisation."
Up to 15 jobs will go though C4 pledged to attempt to redeploy them where possible. However, it is currently in consultation with staff about making up to 150 jobs – 15% of its workforce – redundant.
BBC director of audio and music Tim Davie said that while he understood C4's financial position, the move was "disappointing".
"Plurality of services is very much in the interest of all listeners," he said. "However, we appreciate that, in light of the current economic climate, Channel 4 felt that they had to leave the 4DG consortium. While we regret this, we remain positive about the future of digital radio and DAB."
