Independent digital satellite channel Artsworld has less than three weeks to avoid closure. The channel, which was launched with much fanfare 18 months ago, has around 100,000 subscribers who pay GBP6 ($9.4) a month. It has seen shareholders unwilling to make further investments due to the harsh economic conditions as well the emergence of BBC4, a free-to-air (FTA) alternative arts and documentary channel.

It appears as though BBC4 has sounded the death knell for this fledgling channel. John Hambley, CEO of Artsworld, told Interspace: “We would have got the extra funding without BBC4. That is absolutely clear. It has been a major factor. We have had a good year. We have been recruiting subscribers at a healthy rate this year. It is really looking at the longer term future that our shareholders have been very worried about the impact of BBC4, because of its level of funding, marketing, cross promotion and the ‘must carry’ nature of it. We were going to hang in there but BBC4 pushed us over the edge.”

Certainly, the BBC’s renewed vigour for multichannel television is beginning to affect others. It appears Artsworld never considered the possibility that BBC may emerge as a competitor in this area. Some could argue that the channel should have been more aware that ultimately that BBC could look to recover lost ground. Hambley conceded: “When we came into this business, we came into replace what BBC were not doing. The BBC did not have an inkling they were going to do this either. This is all a pretty sudden move by the BBC. It was only a short time ago, that they woke up to the fact that there was something call digital out there.”

Ironically, Artsworld has performed strongly in recent months and needs only around 140,000 subscribers to break even. Yet, as a number of independent channels are finding out, building a sustainable business in digital television is proving far from easy. A leading media equity analyst who requested anonymity told Interspace: “I think life is going to get quite difficult because there was just over-inflated expectations when many of them were launched. Many of them have got very small viewing shares. The ones that aren’t profitable are going to go to the wall because people are going to run out of patience for them. There is less money available.”

Hambley does not seem overly optimistic that new sources of funding can be found. He concedes that it is unlikely that anyone “is going to put a cheque on the table between now and July 31.” Time is beginning to run out.

If a solution is found, it is possible that Artsworld may go free-to-air for a short period of time. He added: “We have announced to our customers we are closing on July 31. If in the next couple of weeks, discussions harden up a bit, I know we have shareholders that would keep the channel on the air. We might even consider keeping the channel on free- to-air to keep it ticking over to try and do that. Realistically, we have given notice to our staff and that we are closing July 31 and keeping our figures crossed that we might not have to.”

–Mark Holmes