The media debate in the UK is unique - but the challenge of subsidising independent public interest media has urgent implications for democracy everywhere

One of the pleasures of coming from and living in the UK is how many people say nice things about our media. They say terrible things too, but especially if you work for an organisation which carries the BBC brand, by and large you get a feeling that public interest media is one thing the country does well. It is often held up by others as a good model to follow.

The British model, particularly with regard to public service broadcasting, has in fact very rarely worked elsewhere. Examples where former monopoly state broadcasters have been successfully transformed into financially sustainable and politically independent public service media have proved sparse.

The question being asked now in the UK is whether the model is working here anymore either. There are multiple reviews of public service broadcasting and public service media being published, the most recent [1] of which from the regulator, Ofcom [2], came out this week. They tend to point in different directions but all of them agree that big changes are on their way. Decisions by governments and regulators that will fundamentally reshape the future of public interest media in the country are close at hand.

The reason this matters is not simply an issue that concerns the media industry in the country – it is really an issue that concerns the future of British democracy. Its outcome might have democratic lessons too for many other countries (and, quite possibly, lessons from other countries could usefully be learned here).

Last month, as head of the policy at the BBC World Service Trust [3] (an organisation which the BBC set up as an independent charity so none of this should be taken to reflect any wider BBC position) I worked with the Ditchley Foundation [4] in putting together a conference on media and democracy. A very good report [5] of the conference has been produced by the director of Ditchley, Sir Jeremy Greenstock, and the conference was blogged by various participants (see Charlie Beckett [6], Jeff Jarvis [7] and Sina Odugbemi [8]).

Our aim in working with Ditchley on this was to introduce a set of developing country arguments into a global debate on the relationship between media and democracy and explore how the experience of developing countries could better inform the international debate and vice versa. It was both encouraging and fascinating that the conference, attended by eminent Western newspaper editors, publishers and academics, benefited so much from the insight from the developing country participants.

Yesterday the Oxford Media Convention [9], one of the foremost media conferences in the UK, struggled with many of the same issues we debated at Ditchley. The issues are huge.

There is a widespread belief in the West that the newspaper era as we have known it for the last century and a half is over. Advertising revenues are plummeting, readership is falling, editorial budgets are being slashed, bankruptcies are mounting. Ditchley took place a week before the Tribune media group - one of the largest newspaper houses in the US - filed bankruptcy proceedings.

Attempts by even the most innovative and fast moving newspaper groups - such as the Guardian [10] in the UK - to develop substantial online operations have not yet developed sustainable business models. It is extremely difficult to find optimistic figures among editors and publishers of traditional newspapers. The crisis is affecting nearly all newspaper sectors, from the most respected such as New York Times (a billion dollars in debt) through to the populist, such as many tabloids, all the way to the most rooted such as local newspapers, which are falling like ninepins (one of my "local" newspapers, the London Evening Standard, has just been bought [11] by a former KGB spy for £1 – that’s not the cover price, it's the whole paper!).

Newspapers are in trouble in the West, and so is the democratic function they provide. The fourth estate function provided by newspapers – to inform citizens, provide a platform for public debate and to hold governments to account, is in question. That function has already been greatly eroded as journalistic budgets have been slashed. It may largely disappear if the newspapers themselves fail.

But it's not just newspapers. Broadcasting is also in trouble.

Many people outside the UK perceive public service broadcasting as being provided by the BBC but this is only partly true. Other broadcasters have a public service remit, particularly Channel 4 [12] which was specifically established as a commercially funded public service broadcaster, and other terrestrial channels – ITV and Channel 5 - have public service obligations.

The BBC is in a reasonably secure position for now with its licence fee funded until 2012 and government Minister Andy Burnham and his opposition counterpart, Ed Vaizey, both stressing yesterday their beliefs in the continuing centrality of the BBC to public service broadcasting in the future. However, Burnham argues that the traditional Reithian values that have underpinned the BBC since its foundation - to inform, educate and entertain - should be supplemented by a fourth: to enable. What he means by that is to work in partnership with other public service media organisations and, in essence, help them out.

The reason is that other broadcasters face mounting losses. The advertising base on which they depend is disappearing. It's been disappearing for a while not only because the country faces the worst recession since the 1930s, but because there is a structural change in the advertising market in the country, as elsewhere. Advertising is migrating online and advertisers simply don’t need broadcasters like they did. The government and regulators are examining how to resolve this problem, with a growing consensus that the answer lies in strengthening Channel 4 (possibly through a merger with 5, possibly through a merger with the BBC's successful commercial arm, BBC Worldwide).

So, newspapers are in trouble and some public interest broadcasters are in trouble? Where does that leave democracy?

Much of the debate at the Oxford Media Convention, as it had been at Ditchley, was whether citizens media and online media actors will fill this democratic role, or – for many participants – far exceed it (this was also a central theme of the Global Forum for Media Development [13] that took place last month as well). The democratisation of media and the reinvention of journalism through citizen media has been covered exhaustively elsewhere (see for example Charlie Beckett's blog and great book, Supermedia [14]). President Obama's campaign and change.gov [15] transition has also provided many with an insight into the new opportunities of political communication and democratic engagement.

Debates continue to be fractured twixt the optimists and pessimists. The optimists see a reinvention, not the dissolution of journalism and – among the radicals - the celebration of the prising of published information from the cold and increasingly dead hands of an unaccountable mainstream and largely corporate media.

The pessimists simply are not convinced that sustainable business models exist or will be developed for the new media platforms - and that the accompanying deprofessionalisation of journalism will lead to ill informed, fractious citizenries and a terminal decline in the kind of investigative journalism essential to keeping governments honest.

One stark fact stands out from this swift and fascinating maelstrom of change – there is a huge problem of money for public interest media. Whether you look at online, community, broadcasting or print, public interest media is either dying on its feet, or it is thriving through public subsidy (Burnham described the BBC as being at "the top of its game"), or it is winging it through online citizens media.

It is possible that new commercial public interest models will emerge, but the debate in the UK points to an increasing recognition that if democracies want a vibrant public interest media they are probably going to have to find fresh and imaginative ways of subsidising them.

This is not simply a question of public service broadcasting, but also local news (with hard-bitten journalists beginning to seriously question whether local news can survive without public subsidy), quite possibly online news and - just conceivably in mature markets – national newspapers themselves.

There is at the least a strong case to be made that a democratic media is going to depend increasingly in the future on a democratic subsidy. That is not an encouraging prospect given the scale of the current financial crisis but if true, it also raises profound questions and challenges for guaranteeing media freedom and an avoidance of state influence. While the BBC has found a way of receiving government subsidy whilst maintaining its editorial independence, similar examples have been more difficult to find elsewhere. A lot more thinking is likely to be needed to solve that problem.

So much for the West. What about developing countries?

In many respects, the parallels are limited. Advertising revenues are largely expanding or are at least vibrant in many developing countries, online media is in its infancy and there has been substantial public demand for new media with generally expanding media markets. Public service broadcasting is rare in forms that citizens trust and find credible, and it is commercial media – both print and radio – that have generally pioneered investigative journalism. Online media, such as Malaysiakini [16], have been at the forefront of investigative journalism and have found ways of sustaining themselves for several years.

Developing country media participants in the Ditchley meeting were markedly more optimistic and energised than some of their Western counterparts. Developing countries are also proving the crucibles for some of the most imaginative solutions to providing communities with news and information on issues that affect their lives. Community media models in countries like Colombia [17] (which depend on public subsidy) and Nepal (which have depended on international aid) might have valuable and so far ignored lessons valuable for the media crisis in the West, particularly when it comes to local news.

But there are also real market failures, particularly providing information and communication opportunities to rural populations, for enabling investigative journalism as media markets mature and intimidation of journalists increases, and for media that reaches across political, religious and ethnic boundaries in the way that community and public service broadcasting can.

Indeed, the eminent economist, Professor Paul Collier [18] argued [19] at the Salzburg Seminar [20] last year, and again at the Global Forum for Media Development in December, that the media's role in informing publics and keeping governments honest was arguably as democratically important as elections were, and that there was a strong case for public subsidy in overcoming the market failures that prevented them from fulfilling these roles.

This is a complex time for the media and it's difficult to think of a time when the future has been less predictable. But democracies need free and plural media and free and plural information systems. A contentious debate is being waged whether the traditional media systems still have relevance, but if they do it seems that public subsidy is going to have to play a stronger role.

Donors to developing countries have long struggled to work out how they can best support a free and independent media but there are increasing arguments from both development experts and from the policy arguments in more established democracies in the West, that public subsidy to free and plural media has a growing, not a diminishing role in underpinning democracies in the 21st Century.

The issues, markets and consequences twixt different media systems in the West and elsewhere differ, but the challenges of providing public subsidy to free and independent media systems seem similar. The lessons that different systems have to offer each other on this issue have yet to be learned and exchanged.

Perhaps it's time they were.

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