Channel 4 has abandoned plans to launch a speech radio service to rival the BBC, with the loss of up to 15 jobs.
The group said today that a “drastic recent downturn” in revenue meant it could no longer afford to invest in the proposed launch of three digital stations, which would have included a 24-hour speech station to rival Radio 4.
In a statement, Channel 4 chief executive Andy Duncan said the broadcaster’s decision to abandon its radio plans had been made “very reluctantly”. The closure is expected to save Channel 4 around £10m in 2009.
“We’ve pursued our radio plans in good faith and continue to believe DAB [digital radio] has a strong future and that we could make a return from radio in the medium term,” Duncan 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.”
Channel 4 had made a number of appointments to oversee its foray into radio, including the signing of former BBC FiveLive controller Bob Shennan as its director of radio. The group said 15 affected staff would be consulted about alternative roles within the group.
The decision to pull out of radio raises further questions about the other stations that were due to launch on the new platform. Channel 4’s winning bid for the licence in 2007 was part of a consortium with media groups including Sky News, Bauer and Global Radio.
Media regulator Ofcom said it was now consulting with the other consortium members about their plans.
“Ofcom recognises that the economic environment is very challenging and that all organisations need to make decisions in light of the circumstances they face,” the regulator said.
“Ofcom 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.”
The BBC’s director of audio and music, Tim Davie, said Channel 4’s U-turn was “disappointing news for UK radio” and for plurality.
“While we regret this, we remain positice about the future of digital radio,” Davie said.
Channel 4’s three proposed services were speech station Channel 4 Radio, youth station E4 Radio, and music and culture station Pure4. The first service, E4, was initially due to launch this summer but the project has been hit by a series of delays.
The other services that were due to launch on the platform included a rolling news station from Sky, a talk radio station from TalkSport owner UTV and a digital radio spin-off of Bauer lifestyle magazine Closer.
Last month, Channel 4 announced plans to cut 15 per cent of its workforce and slash its programming budget in a bid to make cost savings.
Ofcom has warned that Channel 4 faces a £100m-a-year funding gap – and is currently consulting on a range of proposals for the future financing of public service broadcasting.