The challenges ahead for Dyke

Stage Six at TV Centre: One of the changes brought in by Sir John

The BBC's Media Correspondent Nick Higham looks forward to the job in store for the BBC's new director general Greg Dyke.

Sir John Birt will be a hard act to follow. In his seven years at the top, the most controversial director-general in the BBC's history has put his early training as an engineer to good use, restructuring the organisation from top to bottom.

He introduced an internal market called Producer Choice, which gave programme-makers freedom to buy resources like studios and camera crews from inside or outside the BBC.

He replaced long-established divisions covering television and radio with a new split into BBC Broadcast (which commissions programmes for TV and radio channels and markets them to audiences) and BBC Production (which actually makes the programmes, competing for commissions with independent producers outside the corporation).

BBC Choice: One of the BBC's new digital side services

He developed the BBC's commercial activities, launching commercial pay-TV channels in Britain in the US with commercial partners.

He encouraged the adoption of new technology, in the process dramatically cutting the costs of programme-making.

And he took the BBC into the digital broadcasting era with the launch of new services like BBC Choice, BBC News 24 and BBC Online, in the belief that the BBC would wither into insignificance in a world of hundreds of channels if it stuck only to its traditional role.

Cost of change

But those changes have been achieved at a cost - as many of those who applied for his job were rumoured to agree.

In the course of their interviews with those aspiring after John Birt's job, the BBC governors heard repeatedly that today's BBC is administratively top-heavy, over-managed and far too slow at taking decisions.

The morale of programme-makers is low, after years of reorganisation and budget cuts. Creativity is stifled by what one applicant for the director general's job, Andrew Neil, described as "Byzantine bureaucracy".

He said: "There is too much money spent on policy, planning and pontificating in the BBC, not enough on programme-making."

The launch of new channels has led to fears that the BBC is becoming over-stretched - that the £200m a year being spent on digital services is being diverted from the core services, BBC One and BBC Two and the five UK-wide radio networks, which deliver the bulk of the audience.

The corporation has come under fire for its failure to retain many sports rights, in competition not only with the deep pockets of BSkyB but with ITV and Channel 4.

And it has angered commercial competitors in broadcasting, publishing and other sectors, who resent its ability to use its TV and radio channels to promote its commercial ventures. Its rivals have to pay for advertising and remain unconvinced by assurances that the licence fee is not being used unfairly to cross-subsidise commercial activities.

Rocky road

Applicants for the director general's job were asked formally for their analysis of the challenges facing the BBC, and their ideas for tackling them. Greg Dyke will have to resolve a number of inevitable conflicts.

How far, for one thing, should the BBC continue to expand? Or should it perhaps contract, concentrating resources on fewer areas?

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What's the best way to protect and develop distinctive, high quality public service broadcasting? Everyone agrees that's the BBC's function, no one agrees just how you define "public service", "distinctive" or "quality" in practice.

How does the BBC protect the licence fee in a digital world in which the audiences for the established mainstream channels are falling, and more and more people choose to pay for a wide range of services?

A government-appointed panel is currently considering the licence fee, and ways of supplementing it - perhaps by charging a supplement to anyone with a digital television receiver.

The BBC knows it must be popular if it's to justify a tax which every television has to pay - but chasing mass audiences leads to accusations of falling standards, dumbing down and a lack of distinctiveness.

Greg Dyke is unlikely to throw out entirely the reforms of the Birt era: the upheaval would be too great, too much of what Sir John achieved was necessary.

But five years from now the BBC may well look very different, behind the scenes and perhaps in the programmes that viewers and listeners see and hear.