Leading Investors Press Granada to Close OnDigital

27 June 2001

Broadcasting group Granada Media is facing calls from shareholders to fold or sell OnDigital, the digital terrestrial pay-TV platform it co-owns with Carlton Communications.

Interviewed by the Financial Times, none of the company’s twenty biggest investors felt optimistic about the platform. At least four prefer immediate withdrawal, while two institutional shareholders opined that OnDigital is worthless but should not be closed now.

With one million subscribers, the digital broadcaster has struggled to compete with satellite rival BSkyB which boasts 5m. “Sky was always going to win the pay-TV war, it was just a question of when. The time is coming when OnDigital is going to have to accept defeat,” said a fund manager at one leading Granada investor.

Carlton and Granada have invested £800m in the platform so far, and assigned a further £300m. Break-even is forecast for 2003 when 1.7m customers are projected. OnDigital’s closure would be a major setback to government plans for all viewers to have digital access by 2010.

News source: Financial Times