Channel 4 has abandoned all plans to launch a series of DAB radio stations next year because of the economic downturn, report FT.com and MediaGuardian. The broadcaster has pulled out of the 4 Digital Group consortium, of which it was the main shareholder with 50 percent, and says in a release (not online) that it will save £10 million in 2009 by axing the project and making its 15 staff redundant. Those cuts will contribute towards a £100 million saving the company has to make by 2012 to counteract a five percent drop in TV ad revenue. The other members of 4DG, Bauer Digital Radio, Carphone Warehouse Group, Sky News Radio, Global Radio, UTV Radio and UBC Media Group, plan to carry on the venture without Channel 4 and make use of the license media regulator Ofcom granted them in July last year.
Channel 4 chief executive Andy Duncan said today his plans were “overtaken by a drastic recent downturn in our revenues and we will have to forgo this future profit stream“, though Duncan curiously suggests that Channel 4 “could make a return from radio in the medium term”. Channel 4 Radio was to be a major part of the broadcaster’s digital strategy with three entertainment and news stations — there was even talk of ending the BBC’s 80-year dominance of the speech radio market with a morning news show to rival BBC Radio 4′ Today programme. Big names like former BBC Radio 5Live controller Bob Shennan were brought in to steer the project and in May Channel 4 approached DAB radio makers about making a branded £20 mini tuner for iPods. At this rate the BBC’s state-funded dominance of radio is set to continue for another 80 years.
— Responding to the news, regulator Ofcom said it “continued to believe that DAB offers listeners real benefits” and would talk the remaining 4DG members about the future for the project. Ofcom claims there are 7.7 million DAB devices in the UK, representing 11 percent of all radio listening.