Channel 4 has abandoned plans for its proposed radio project. Having won the franchise in July 2007, Channel 4 set out an ambitious plan for a range of music and speech stations on DAB including a direct competitor to Radio 4. The first station E4 Radio was due to air next spring. The plan will save around £10m in 2009.
Channel 4 Radio is the majority shareholder in 4 Digital. Its other shareholders are UTV Radio, Bauer Radio (owners of Cool FM and Downtown), BSkyB, the Carphone Warehouse Group, and UBC Media.
Back in August The Observer reported:
The problems is that negotiations with Global, and C4’s own joint venture partners, are not proceeding smoothly. 4 Digital is majority owned by Channel 4, but some of the minority partners, who include UTV Radio and Magic FM owner Bauer Radio, have reservations about the cost of funding new digital channels at a time when the economic outlook is gloomy. Digital licences run for 12 years, and it costs £1.5m a year to air a single station, says the source close to the talks. ‘That’s just the transmission: never mind the cost of running the station and paying the presenters. You could run a national FM or AM station for the same cost if the frequency was available.’
On Friday the decision was widely reported. The Stage said:
Responding to the news, Ofcom said: “Ofcom recognises that the economic environment is very challenging and that all organisations need to make decisions in light of the circumstances they face.”
It said it would meet with the other members of 4 Digital Group over the next few days to discuss how they propose to take matters forward.
Ofcom also revealed it is in discussions 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”.
Channel 4’s withdrawal from the radio market will come as a blow to independent drama producers, who had hoped the broadcaster’s offerings would increase opportunity for production outside of BBC stations.