Media: All about ... Public-service broadcasting

Uncertainty continues over funding and distribution, Alasdair Reid says.

For one and all at the BBC, Christmas is often a rather agreeable period. It's that time of the year when the corporation's central role in the cultural life of the nation goes pretty much unchallenged - and its commercial broadcasting rivals do the decent thing by giving it a free run in the audience ratings.

There's no more resonant symbol of seasonal surfeit than the Christmas Radio Times, which this year (as last year) raked in revenues of more than £2 million. Not bad, given the circumstances.

So there's no denying that the corporation had a rather good December. True, there were all manner of humiliations to be endured, spats to be negotiated and dismal cock-ups to be explained away.

But the Sachsgate aftershocks, the Strictly Come Dancing voting scandals and a national outcry over an outrageous decision to reschedule an episode of Little Dorrit were surely rather piffling matters when seen in context.

No - the tail end of 2008 was a time of good cheer. And not just because an opulently cocooned corporation is one of the cosiest places to be during a recession.

When debate about the future of public-service broadcasting began to heat up a couple of years ago, the bitterest pill for the BBC to swallow was the notion that public-service broadcasting was no longer to be regarded as synonymous with the BBC and the BBC alone.

It was only a short intellectual hop and a skip to the notion that the corporation might in future have to share its licence fee with all sorts of undeserving oiks - like those utterly shameless sensation-seekers at Channel 4.

With all sorts of regulatory reports due and various lobbying efforts coming to a head during an economic meltdown, the BBC was surely expecting to face up to an awkward few weeks. It hasn't quite turned out that way.

1. At the heart of the debate is a long-running lobbying campaign by the Channel 4 chief executive, Andy Duncan, to gain access to public funds - a share, say, of licence-fee revenues - to help it bridge a forecast funding gap while continuing to meet its public-service obligations.

2. Ofcom's chief executive, Ed Richards, has indicated that allowing Channel 4 a slice of the licence fee will be one of the options outlined in the regulator's public-service broadcasting review. The report's consultation period closed on 4 December and publication is now expected before the end of this month. Its basic premise will be that the UK's current PSB framework will soon be economically unsustainable.

3. That will be followed in February by the publication of Digital Britain, a report compiled by a team led by Lord Stephen Carter, the first minister for communications, technology and broadcasting. It is part of a broad-brush initiative by the culture secretary, Andy Burnham, to ensure that the UK remains a world leader in media and communications - but it will also address detailed concerns about the sustainability of commercial broadcast revenues.

In December, Carter hinted that there may be new broadcasting legislation in the pipeline for 2009; and even more importantly from a BBC point of view, he indicated that the corporation can expect its licence-fee funding to be guaranteed until at least 2022.

4. Given all this crystal-ball gazing, it was somewhat ironic that a concrete initiative by the BBC, ITV and Channel 4 to ease their funding difficulties in the digital age - the on-demand web-TV venture codenamed Kangaroo - was pulled up short by the Competition Commission. It will now have to agree to a series of conditions - yet to be decided - before it can launch; but there's still strenuous lobbying behind the scenes, not least from rival on-demand suppliers such as Virgin Media, for it to be blocked once and for all.

5. Meanwhile, Channel 4 has, in many people's eyes, completely lost control of its lobbying agenda. At the start of December, a report from the Social Market Foundation think-tank argued the privatisation of Channel 4 should not be unthinkable. This at a time when the broadcaster's proposal to merge with BBC Worldwide was being scathingly attacked by the BBC Trust chairman, Sir Michael Lyons, and mocked in certain sectors of the press.

WHAT IT MEANS FOR ...

Commercial broadcasters

- Continuing uncertainty about public-service broadcasting - what it should be delivering, how it should be paid for and whether, indeed, we need it at all - could contribute to a thoroughly miserable year for ITV and Channel 4.

- ITV already finds it difficult to plan for the future, not knowing when BSkyB will finally relinquish its strategic holding - and what implications that has for its ownership structure thereafter. So it can do without any further imponderables.

- But ITV's broad programming strategy, give or take a regional news commitment here and there, is unlikely to be affected by any of these considerations.

- In comparison, Channel 4's strategic planning problems are much more severe. There's a growing feeling that responses to "the Channel 4 problem" during 2009 will not only shape its future but the whole of the UK's broadcast ecology for many years to come.

- This week, Mark Thompson, the director-general of the BBC, threw his weight behind a Channel 4/Five merger as a way forward.

ADVERTISERS

- In the short term, advertisers can expect to benefit from continuing regulatory uncertainty in the television sector. Fearful companies make poor negotiators. Longer term, however, it's in advertisers' interests to see strong broadcasters producing excellent programming.

- Advertisers know what they like when it comes to the sorts of audiences and advertising environments that Channel 4 can deliver. The question is: are they prepared to pay for it?