With hindsight this decision was fairly predictable - especially given the current economic situation - but Channel 4 deciding to axe its digital radio project was still a surprise given the previous and supposedly long term commitment that was given to the project. In short, current market economics seem to no longer support DAB digital radio in any form.
A significant factor in all of this relates to the costs involved; Enders Analysis (the same agency that recently predicted a bleak future for Setanta) recently opined that the radio industry would be better off ignoring digital radio altogether for the time being due to the transmission costs for DAB being ten times more than for traditional analogue radio.
And based on today's announcement from Channel 4, this viewpoint now seems to have gained additional credibility as a result, since if Channel 4 couldn't even justify a scaled-back proposal that just used the Digital One multiplex, then what hope is there in the short term for the other commercial DAB operators?
Plus where does this leave the future of DAB in the UK? Well prior to today I was still reasonably optimistic about DAB's future despite all the recent setbacks, but as of now I am less sure as to what will happen next apart from the one certainty that the BBC seems to be the only broadcaster that is 100% committed to supporting DAB digital radio.
The government could in theory find some way of subsidising digital radio transmission costs for the commercial sector, but the BBC is already strapped for cash as well as direct assistance being out of the question due to European Union cross-subsidy rules. (The same rules that may threaten to scupper efforts to financially assist Channel 4.)
Whether the BBC's commitment to DAB will be enough to keep it afloat until digital radios in cars become more commonplace remains to be seen, but the analogue radio switchoff is still a long way off for both financial and technical reasons. (Lots of money will be required in order to complete the transmitter network so that DAB coverage matches that of FM.)
And without the imminent threat of silence on the FM band, digital radio in the UK runs the real risk of going nowhere for years to come.
