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UBC looks to downloads to improve its fortunes

• FROM: July 2006 |
• TAGS: media, ubc media group |
• COMMENTS: Add yours

• UBC looks to downloads to improve its fortunes
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Radio broadcaster UBC Media is looking to branch out from its conventional offerings by launching a service which allows consumers to download songs instantly as they listen to them on digital radio.

The group, which owns the Classic Gold network of radio stations and jointly owns OneWord Radio with Channel 4, has conditionally raised £3m for the development of the new service. It is currently being trialed and should be out on the commercial market within the next 12 months.

Each song is expected to cost £1.25, compared to the 79p charged by Apple’siTunes - a premium the company feels people will be happy to pay because of the convenience.

Further investment will be made on the development of the music downloading service, but the cost could prevent the company from breaking even next year. The group narrowed pre-tax losses for the year to March 2006 to £234,000 compared with the loss of £1.16m previously as revenues grew 22% to £19.4m. That was predominantly down to higher advertising revenues from the Network Programming business. This outperformed the commercial radio market, with like for like growth of 20.7% against an industry decline in the same period of 6.8%.

Operating profit before goodwill amortisation was £349,000 compared with the loss of £427,000 last year -the first time UBC had shown profit at that level. The shares did not react to the figures, mainly because they had been flagged in a trading statement back in April. Shares still trade below the original flotation price of 25p.

UBC Media feels the face of the radio industry is changing and has made a conscious decision to evolve and develop new business models, such as the downloading service, in the hope that it will grow on the back of this change.

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