Bad timing 

4 March 2008 tbs.pm/864

Digital radio rift at Channel 4

Channel 4 has a countdown conundrum all of its own to solve, namely whether to press ahead full steam with the launch of three radio stations in the face of weakening support for DAB digital radio from the commercial radio sector which has been exacerbated by a weakening European economic climate.

Recently GCap – which may or may not be on the verge of being taken over by Global – made the decision to dispose of its national digital-only ratio assets. At face value this was a short term measure to appeal to shareholders, but the reasoning given had echoed views that had been privately held by much of the radio industry.

The problem for Channel 4 is that its bold ambition to take on national BBC radio stations was dependent on remaining slots in its multiplex being rented out in order to generate income, but GCap giving DAB the thumbs down combined with the economic climate has made the prospect of doing this much more difficult.

If the Digital 1 multiplex has to fill its national slots with BFBS Radio 1 and a recording of birdsong, what hope will Channel 4 have of filling slots of another DAB multiplex which will have restricted coverage to begin with? Channel 4 may be trying to force further government support on this issue in order to continue with the radio project.

So unless GCap gets a new owner who has a change of heart (very unlikely in the short term due to financial considerations especially if Global is in charge), confidence in the DAB platform will continue to remain low at least in the short term, and Channel 4 could end up with a very costly white elephant/albatross on its hands.

Backing out of the multiplex deal altogether would be very costly for Channel 4, and Ofcom would have to be especially accommodating in order to allow significant changes without financial penalty. And any compromise in Channel 4’s future proposals would be another major setback for DAB digital radio in general.

As well as helping to bang more nails into the coffin of DAB digital radio in its original form, Channel 4 reducing its commitment or gracefully withdrawing from the DAB platform would also be a significant political blow in the government’s hopes of establishing so-called ‘plurality’ of public service broadcasting.

More radio stations offering real choice can be a good thing, but somehow along the line all of this will have to be paid for – from somewhere. Top-slicing the licence fee to pay for Channel 4 is looking very unlikely because the sums just wouldn’t be enough, and getting anything else sorted may take too long to solve this particular crisis.

All of this helps to emphasise the problem of getting someone other than the BBC to provide a major public service radio alternative (which may turn out to be impossible without generous subsidies), although there is the entirely separate issue of whether it might be better to just let the BBC provide further public service diversity instead.