Radio Giant Closes Two Digital Stations

Radio Giant Closes Two Digital Stations
SkyNews
By Sky News SkyNews - 53 minutes ago

The UK's biggest commercial radio broadcaster, GCap Media, has axed two of its stations - after labelling digital radio "economically unviable".

The Classic FM owner said theJazz and Planet Rock will go as it looks to concentrate on its core FM stations in an attempt to revive the business.

The company - currently fighting takeover interest - also plans to boost advertising at its flagship Capital 95.8 station in London.

It is reversing its previous policy of broadcasting no more than two commercials in a row.

Chief Executive Fru Hazlitt has unveiled the moves just weeks after the group rejected a £313m takeover approach from Global Radio, an acquisition vehicle headed by former ITV Chief Executive Charles Allen.

She said digital "was not an economically viable growth platform for GCap Media".

The former Virgin Radio boss added: "We are structuring the business around the revenue streams that can deliver us the most profit going forward.

"Planet Rock and theJazz are brands that we do not believe can win for us."

She aims to deliver cost savings of £8.8m a year through disposals and restructuring, as well as achieving profit margins of up to 19% by March 2010 under the "radical but realistic" plans.

GCap has also agreed to sell its stake in Digital One, the national broadcasting platform for digital stations, to communications infrastructure

The company - which has around 15 million FM listeners - said that, in the year to March 2007, it spent £8m on digital radio despite the medium accounting for just 9% of all radio listening.

Ms Hazlitt said: "FM is the backbone of the radio industry and we believe it compares favourably to any of the digital platforms currently available to the consumer in terms of quality. It is also the source of the majority of our revenue."

The company plans to concentrate on its Xfm brand in London, and is in talks to sell its three loss-making regional Xfm stations in Scotland, Wales and Manchester.