BBC under fire.

The British Broadcasting Corporation (BBC), one of the world's most revered public broadcasting services, is in danger of selling its soul to commercialism. In the process of doing so, it may lose sight of the cultural heritage that has justified its existence for 50 years.

That damning piece of analysis formed the focus point of a controversial speech by the flamboyant Channel 4 boss, Michael Grade, at this year's Edinburgh International Television Festival. It promptly set into motion the most heated debate to date about the BBC's future in the increasingly aggressive multi-channel UK market. It not only dominated this annual event, but it sparked a feeding frenzy in the general press.

The sentiments expressed by Grade, chief executive of the advertisingsupported Channel 4 and a former BBC controller, were timely. The government's Green Paper to discuss the renewal of the corporation's Charter in 1996 will be published this fall. High on the agenda will be the compulsory public-funded license fee that finances the broadcaster--should it be retained or not? The BBC, determined to hold onto the fee, plans to respond shortly after.

So far, however, it has been bombarded by the views and criticisms from all corners of the industry. And Grade's attack was easily the most vociferous to date.

He argued that BBC senior management and governors "are putting in longterm jeopardy the very institution they are fighting to protect." He said they have "half embraced the free market, but in doing so have set the BBC on a course which can only lead to terminal decline."

His stinging remarks at the festival, an annual event that attracts the most concentrated gathering of UK media folk, did not end there. He rebuked the methods used by BBC management to run a costefficient organization that produces programs of the highest standards.

One such method is the "Producer Choice" policy, through which BBC programming departments will be given the freedom to opt out of using in-house production facilities, if outside services prove to be cheaper. That approach is a fallacy, Grade said. "If Producer Choice led the BBC into becoming a publisher contractor, buying in the market place and putting nothing back in the way of training and development, the case for public funding would seem to disappear altogether."

BBC executives waste too much energy placating a right wing government that has never hidden its contempt for public services protected from open-market forces by privileged public funding. "If it is not truly independent, and seen to be so, the BBC is no use to anyone," Grade added.

Morale at the Corporation is consequently very low, he said. An atmosphere of enthusiasm has been replaced by a pall of secrecy which makes employees feel too intimidated to voice their own opinions. The solution is for the BBC to return to the days when it embodied all the qualities expected from a "center of excellence in broadcasting."

The BBC's response to the criticism was swift. Marmaduke Hussey, chairman of the BBC board of governors, said: "UK broadcasting is changing. We can't afford to look backwards." The BBC can only hold on to its principles by looking forwards and confronting its problems, not evading them." He has a point. The Corporation earns about pound1.5 billion a year from license fees. However, it recently admitted it faces a potential loss ol 100 million in the next financial year.

Austere measures are to be implemented to save more cash for its programs. "Producer Choice" will save the BBC pound200 million next year. John Birt, who becomes the new Director-General next March, plans to cut the workforce by more than 30 per cent to 17,000.

While several EITF delegates agreed with most of Grades opinions, they shared Hussey's view that the British TV market place has changed following deregulation. The two BBC channels are now competing with two commercial networks and new cable and satellite services for audiences. According to a recent survey by the advertising agency Young & Rubicam, the BBC has lost 40 per cent of its audience to the satellite services. In addition, a fifth national terrestrial network is to be launched in 1994. The consensus seemed to be that to survive, the BBC must evolve with the times or become the dinosaurs of UK broadcasting.

Whatever the merits and faults in Grade's argument, his speech has served a useful purpose. "The festival has held sessions on the BBC for several years, and the BBC has usually been slow to respond," said Flora Gregory, the festival's director. Not this time.

Another controversial broadcasting personality who stirred some excitement at the EITF was Moses Znaimer, founder of Canada's innovative "studioless" City/ Tv station in Toronto. He is a director of Channel 5 Holdings, a consortium led by Thames Television bidding for the fifth channel's franchise in Britain. (Sony Pictures, CanWest Communications and Viacom are said to be potential investors.) Znaimer hopes to base Channel 5 on CityTv.

He had been invited to give the festival's Worldview Speech, designed three years ago to bring an outsider's perspective to the UK TV industry. With his forthright vision about the true function of the TV medium, Znaimer did not disappoint. "Television needs to be brought down to earth, to become rooted in the community," he said promulgating his philosophy of "localism" in an industry obsessed with globalization. "We point our cameras at our surroundings and at ourselves and at the young people who hang out on the street corner outside CityTV stoking their first dreams of showbusiness or their first expressions of responsible citizenship." The question is, will his vision appeal to the conservative British spirit?