Digital radio 'economically unviable', says UK media giant

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

The UK's largest commercial radio broadcaster, Gcap Media, axed two of its stations today 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 a bid to revive the business.

The company - currently fighting takeover interest - also plans to boost advertising at its flagship Capital 95.8 station - reversing its previous policy of broadcasting no more than two adverts in a row.

Chief executive Fru Hazlitt unveiled the review weeks after the group rejected a £313m (€419.4m) 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."

Ms Hazlitt hopes to deliver cost savings of £8.8m (€11.8m) 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.

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