Before settling on music, CanWest considered turning loss-making TV4 into a shopping network or a "retro" channel showing shows from the 70s, 80s and 90s.
But the broadcaster opted to go with a youth music format because of the low start-up costs involved and the flexibility to changetack if the concept does not work.
Yesterday, CanWest unveiled the name and logo for the revamped channel. It will be called C4 and will begin pumping out music aimed at 15- to 29-year-olds on October 3.
CanWest has managed to steer sister network TV3 into profitability over the past year, but 4's losses have worsened.
Last month, it reported an operating loss of $5.2 million for the nine months to May, compared with a $4.7 million loss for the same period a year earlier.
TV3/TV4 managing director Rick Friesen said C4 would cost $5 million to $6 million a year compared with the $7 million to $8 million in annual programming costs being incurred by TV4.
Friesen said shopping networks were extremely profitable in many markets, but the high start-up costs were a drawback.
A "retro" format had been attractive because the programmes were cheap to buy, but it involved a long-term buy-up of programming, which could prove expensive if the concept did not work.
Music offered low operational costs without the long-term commitments if the format did not take off.
Because music channels typically attract a 1 to 2 per cent audience share, CanWest was not worried that the channel would eat into TV3's viewership.
Friesen said C4 would be profitable if it achieved a 2 per cent rating, although start-up costs would eat up profit in the first year.
Free-to-air TV music formats have come and gone in the past. TVNZ bought out Max TV's frequency in December 1997 to remove Auckland competition for MTV, then later dumped MTV.
Friesen said the high programming costs associated with MTV had been part of that channel's problem.
