BBC Three is to be dropped as a television channel and move exclusively online, as part of plans to cut costs. Subject to approval by the BBC Trust, which could yet reject the plan, the BBC Three channel would cease broadcasting in the autumn of 2015. The channel is aimed at 16-34 year-olds, who are increasingly accessing programming online. Certain programmes on BBC Three have successfully premiered online, in some cases getting more viewers online than on cable, satellite and terrestrial television. Could this be the beginning of a channel shift from broadcast to broadband?

Tony Hall, the director general of the BBC, has said that “tough choices” would have to be made if the BBC is to make savings.

Last October, speaking on BBC Radio, Lord Hall said: “I wouldn’t consider closing a channel”.

However, announcing the plans to close the BBC Three channel, he said: “Something has to give. And that means hard choices. But there is one choice I will never make — and that’s to sacrifice quality.”

This would be the first time the BBC has closed a television channel. BBC Three was launched in 2003, replacing BBC Choice.

BBC Three would become an online only proposition. “I believe the iPlayer is a key part of the future for public service broadcasting,” he said.” I am sure that this is going to be increasingly important for our younger audiences. And reaching those audiences is vital for the BBC.”

“It will not just be a TV channel distributed online — it will be an opportunity to look at new forms, formats, different durations, and more individualised and interactive content.”

“25% of viewing by 16-24 year olds is to catch-up or other screens and over the next few years we expect that to reach 40%. We recognise that, for now, most of this audience still do their viewing on television, and that is why we plan to show BBC Three’s long-form content on either BBC One or BBC Two.”

So, in other words, those that currently watch the television channel that was specifically created to reach this demographic will still be able to watch the same programmes on the main BBC channels.

Taking the channel off air would require the approval of the BBC Trust, which represents the interests of television licence fee payers.

Danny Cohen, the director of television at the BBC, described it as “the biggest strategic decision the BBC has made in over a decade”, although it seems difficult to compare it with the launch of Freesat or the decision to invest in YouView.

He added: “I think this can be transformational for both the BBC’s relationship with young audiences and the BBC’s approach to the digital age overall.”

“It will not just be a TV channel distributed online. There is a wonderful creative opportunity here to develop new formats with new programme lengths – and to reach young audiences in an ever growing number of ways.”

In financial terms, it looks like a token gesture in the context of the total BBC budget of £3.8 billion.

The BBC currently has a deficit in its pension budget of £2.0 billion and has agreed to contribute £740 million over the next four years to top up the scheme.

The budget for the BBC Three service is just under £90 million a year. The BBC says taking BBC Three off air will save £50 million a year, although it is going to move £30 million of that to spending on BBC One, so that is more like a saving of just £20 million. There will be no saving on broadcast distribution costs, because the BBC is planning to use the capacity to extend transmission of the CBBC pre-school service by an hour a night and then run a repeat of the main BBC One channel, delayed by an hour.

The BBC Trust previously rejected plans by the corporation to close the 6 Music Radio station, following a campaign by listeners.

Apart from the dubious financial rationale, moving an entire channel brand from broadcast to broadband is a significant step for the BBC. The question is whether BBC Four might be next.