[cma-l] GCAP pulls out of DAB to save money

[CMA-L]

GCap Media is to close its digital radio stations TheJazz and Planet 
Rock and sell its stake in national digital radio operator Digital One 
as part of a £9m cost-cutting package unveiled today.

The Capital and Classic FM parent will also sell off its Xfm analogue 
radio licences in Scotland, Manchester and south Wales but retain the 
music station's London operation.

GCap said it would aim to boost profits by £12.3m pounds, helped by 
cost-cutting that would save it £8.8m a year.

It follows a strategic review by the GCap chief executive, Fru Hazlitt, 
after the company rejected a preliminary approach from privately owned 
Global Radio valuing it at around £313m.

"Today we are announcing a radical but realistic set of measures with 
the aim of delivering significant improvements to profits and operating 
margins and positioning GCap Media for long-term sustainable growth," 
said Hazlitt.

"GCap Media will become a leaner and more dynamic company focused on 
maximising the revenue and profit potential of five key brands on FM and 
broadband, the platforms that we believe consumers want and which offer 
the greatest growth opportunities."

Digital One broadcast via digital audio broadcasting, or DAB radio, and 
was championed by Hazlitt's predecessor, Ralph Bernard.

However, the GCap chief executive said the disposal reflected "our view 
that DAB is not an economically viable platform for the company".

Hazlitt also announced a U-turn on her predecessor's policy of 
restricting the number of adverts on its flagship London station, 
Capital 95.8.

The station will now run up to nine minutes of advertising an hour after 
Hazlitt said that "demand was outstripping supply".

Capital introduced a policy three years ago of not playing more than two 
adverts in a row but the station lost money as a result.

http://www.guardian.co.uk/media/2008/feb/11/gcapmedia.commercialradio