Channel 4 is planning to outsource its playout operations to Red Bee Media, the former BBC subsidiary that provides similar services for the BBC and Virgin Media among other clients. The British broadcaster has also selected software from Chello Interactive to support its interactive advertising.

The plans cover Channel 4, E4, More 4, Film4 and associated channels, as well as a new high-definition channel to launch by the end of the year, together with the 4OD video-on-demand service available on cable and broadband platforms.

Red Bee Media provides playout, promotion and subtitling services for the BBC. The company already provides similar services for Virgin Media, as well as subtitling for Channel 4.

“Making our unique public service content available across new digital platforms is placing considerable financial and technological demands on the channel,” said Channel 4 finance director Anne Bulford. “Outsourcing these functions will allow us to tap into the more considerable and flexible resources of a big, specialist provider and help us stay competitive in the face of rapid technological change.”

Channel 4 recorded group revenues of over £900 million in 2006, spending over £600 million on programming.

Red Bee Media will invest in new facilities and is expecting to deliver annual savings of 10-15%. The proposal to contract out channel playout to Red Bee Media affects more than a hundred staff, many of whom will transfer to the Broadcast Centre on the BBC campus in west London.

The move to outsourcing operations is part of an industry trend. Commercial broadcaster ITV has contracted out its playout to Thomson.

The transfer of Channel 4 playout operations to Red Bee Media is planned to take place from the second quarter of 2008.

Channel 4 has also formally selected the Mistral system from Chello Interactive to deliver interactive advertising on the Sky satellite platform.

“This deal with Chellomedia gives us the opportunity to offer new services to our customers at attractive terms,” said Carie Bolsover, the commercial interactive manager at Channel 4. “We’re optimistic this will help to further grow the interactive market.”

Channel 4 is the second British broadcaster to use the Mistral system, following IDS, the sales house of Virgin Media.