Music Choice Europe’s (MCE) CEO Stuart Graber has quit the company (although he will continue as a consultant) to set up a specialist Internet and new media investment company. MCE’s former marketing chief Simon Bazalgette will take the helm. Music Choice was set up in 1993 by Warner Music and Sony, with BSkyB taking a 49 per cent stake in January 1998. EMI is also a minority shareholder.

Bazalgette has denied recent stories that suggested the company was a long way from profitability. "Income is rapidly rising as digital rolls out, while costs rise at a much slower rate," he said. "Our shareholders are happy that we are on the right track."

Bazalgette said BSkyB’s rapid progress in digital has helped Music Choice’s financial position. "The service has been an extraordinary success, with around 3-4 per cent of Sky Digital viewers subscribing to the enhanced MCE service [all Sky viewers get 10 core audio channels for their basic fee] and those numbers are building thanks to a tele-sales operation now kicking in," he said.

Bazalgette said MCE has a few other services at the development stage, including some interactive options.

"We are also working on a few interesting ideas, not least a few talking books channels, and adding some children’s and music channels, but we are not yet at a stage when we can announce anything firm," he said. "Having additional revenue streams from e-commerce at the back of the platform makes it easier to create new services."