Granada Pressured To Close ONdigital

Granada is under pressure from some of its largest shareholders to close the troubled pay-per-view television platform, ONdigital, according to a poll conducted by the Financial Times .

The paper claimed today that investors have lost patience with ONdigital, which has failed to compete with Sky Digital and other cable and satellite operators in the multi-channel television market and feel that it should close or be sold.

The poll has found that at least four of Granada’s top 20 shareholders are in favour of immediate withdrawal from ONdigital, with two major shareholders expressing the opinion that the pay-per-view platform was “worthless,” but should not be scrapped at this particular time. None of the investors questioned in the poll “expressed any optimism about the business,” which has struggled to loosen BSkyB’s domination of the market.

Investor hostility towards Granada grew after the publication last weekend of a leaked letter to the Prime Minister warning that ONdigital could close if the media ownership laws were not reformed in this parliamentary session (see Granada Warns Of ITV Disaster). The closure of ONdigital would be a set back for the government who plans to switch the analogue signal off between 2006 and 2010 (see Chris Smith Sets Out Digital Agenda).

ONdigital, which has received over £800m from Carlton and Granada since its launch in 1998, is expected to break even next year, having accumulated 1.7m subscribers. However, ONdigital has been overshadowed since its launch by BSkyB, which currently has 5m viewers (see UK Digital TV Homes Could Top Six Million By 2001).

Granada and ONdigital were today unavailable for comment.

FT.com: 020 7643 2266 www.ft.com Granada: 020 7620 1620 www.granada.co.uk ONdigital: 020 7819 8000 www.ondigital.co.uk

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