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By | October 10, 2001

      By Toby Marshall

      The current shakeout among smaller UK digital TV channels, coupled with Culture Secretary Tessa Jowell’s decision to allow the BBC to go ahead with its plans to launch a new digital arts and culture channel named BBC 4, has prompted much speculation over the future of smaller niche arts channels such as Artsworld and Digital Classics.

      Contacted by Interspace, Artsworld Chief Executive John Hambley was pragmatic about the service’s outlook: “It is the essence of any business to have a robust business plan. I imagine the reason why so many of the smaller channels have failed is that they have taken what has proved to be an unrealistic view of the advertising market, and hadn’t planned for contingencies such as the current slump in the market.”

      He added that “when we originally sat down to put together a business plan with Sky, we took the view that an advertising-supported channel business model was far too fragile and have consequently based our channel purely around the subscriber model”. While declining to comment on Artworld’s current subscriber total and financial situation, he said the former were “growing at a steady pace” and the service was “a long way from breakeven”.

      Alluding to services such as The Money Channel, whose studio facilities have recently been purchased by former BSkyB New Media director, John Swingewood, Hambley was nevertheless scathing. In his view, “a good many of the other (smaller channels) have done things the other way round the other way round and gone out and bought their own studio facilities and suchlike. They are then surprised when they find out that their revenue streams cannot sustain such a large cost base and eventually go out of business”.

      Hambley continued the main problem was that when the current rash of smaller niche digital channels first started up, there were a lot of people “with backgrounds from, for example, the publishing industry, who had no experience in the TV market. They came in thinking they knew everything about broadcasting media, and quite plainly they did not know enough”.

      Asked whether Artsworld’s content and audience demographics would not bring in enough revenues to make the channel viable, Hambley said, “we’re obviously not going to appeal to anyone who can’t afford the GBP6 (E9.62) per month subscription fee and arts programmes are always going to appeal to a minority. But despite this we’ve got enough subscribers to make it viable.”

      Hambley was keen to emphasise that Artsworld is a “content-driven business” and a not a “one-note channel”. He was also philosophical though angry with the UK government’s decision to approve the launch of BBC4, reserving the most criticism for the consultation process to which the BBC’s plans for the channel were subjected as it “did not enquire deeply enough into how new services will get their money”.

      The same can also undoubtedly be said about existing arts channels, which are all likely to face an uncertain future following the launch of BBC4. Digital Classics, which is a spin-off from a paid-for web site operated by Online Classics, is arguably already pricing itself out of the market, it monthly fee (which is due to rise from GBP4.99 to GBP5.99 a month from November 1) securing viewers only six hours of programming daily. Performance, on the other hand, has arguably had a raw deal so far in the UK market, being only available on cable and not satellite (as in South Africa, were it is offered as part of the MultiChoice package) since its launch several years.

      Artsworld’s John Hambley nevertheless believes that despite the prospect of it turning into “a hotly competitive market”, the channel should be more than able to co-exist with other new and existing services. Indeed, in his view the content that BBC4 is likely to offer will be so broad in subject matter that Artsworld’s market niche will be barely affected. What is more, the BBC’s previous experiences with another of its digital ventures BBC News 24 had been mixed, with the service achieving “less than expected and gradually declining viewing figures”.

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