By Mark Sweney: Five has pulled out of Project Canvas, the BBC-backed venture to bring video-on-demand to Freeview and Freesat.
Five, which has been put up for sale by its parent company RTL, is one of seven partners in the venture, which is expected to launch next year.
One of the conditions each partner has to adhere to is to fund an equal share of the development costs. The BBC Trust has said that the cost of Project Canvas, including development, launch, and the first four years’ running costs, will be £115.6m.
In March the broadcaster was forced to pull out of launching a high-definition TV service on the digital terrestrial TV service Freeview before 2012 after failing to give a launch date or programming schedule to media regulator Ofcom.
Last month the BBC Trust approved the launch of Project Canvas, which is expected to use the brand name YouView and had been expected to have an unveiling next week. It is not known if the announcement about Five will affect the plan.
Project Canvas’s other partners are BT (NYSE: BT), TalkTalk, Channel 4, ITV (LSE: ITV) and Arqiva.
Five said it had taken the decision to pull out of Project Canvas pending a review of its digital investment strategy.
“We continue to support the objectives of Project Canvas and despite withdrawing our interest in the venture we believe it will be a critical part of our strategy for reaching consumers in the future,” said Charles Constable, director of strategy at Five.
“Five struggled to convince Bertelsmann [RTL's majority owner] it was a valuable thing to do,” added one source with knowledge of the situation.
Richard Halton, director at Project Canvas, said that the venture had received “excellent support” from Five, which he hoped would continue to work “as a content provider to the platform in the future”.
RTL is understood to have whittled down a list of parties interested in buying Five to a shortlist of about six.
These are said to include Big Brother creator John De Mol, in partnership with Greek broadcaster Antenna and through his investment company Cyrte Investments, and Richard Desmond.
Final bids are understood to be due by 19 July with RTL then set to whittle the prospective new owners down to a final two.
ITV and Channel 4 are understood not be among the bidders.
This article originally appeared in Â© Guardian News & Media Ltd..