Comment: Birt's problems at BBC are far from over

With new Labour safely elected, John Birt, director general of the BBC, will be sleeping a little more easily than he was. The future of public service broadcasting, and the licence fee to fund it, looks that much safer. But, as today's annual report is expected to show, the task of competing in the increasingly commercial world of broadcast TV just keeps getting tougher and tougher.

Most business people would kill for the sort of problem the BBC has - a guaranteed income. Unfortunately, it is not all upside. For a start the licence fee has to be constantly justified and fought for - and with Auntie now priced out of the market for live sport and Hollywood, that's a lot more difficult than it was. Man cannot live on EastEnders and Teletubbies alone.

But perhaps worse than that, the fixed licence fee means the Beeb has limited scope for growing its revenue. That in turn means spreading a fixed pool of money more and more thinly in the fight for audience. It can readily be seen that a vicious circle of decline culminating in removal of the licence fee is never far from becoming a reality.

For the time being the BBC is maintaining its position admirably. Last year, its share of UK viewers and listeners held steady at 45 per cent. So far this year it may have grown slightly. No problem there, then. The trouble is that from this year onwards the BBC will be spending 9 per cent of its revenues annually on the conversion to digital. That's a long way from betting the shop on the Beeb's digital future, as Mr Birt has already observed, but nonetheless it means less money for programming and less money for trouncing the competition.

The BBC's great white hope is its commercial arm, BBC Worldwide. This seems to offer a real chance of exploiting the brand internationally and developing sizeable commercial revenues outside the licence fee. Recently announced deals with Flextech and Discovery Corporation have the potential to create considerable value for the BBC. Even here, however, progress seems to be slow and relatively unambitious. The BBC has set itself the target of tripling the contribution from Worldwide over the next 10 years to around pounds 200m, which sounds and is impressive. However, at less than 10 per cent of revenue from the licence fee, it's not enough to transform the corporation's finances. So although Mr Birt can expect rather more sympathetic treatment from the present Government than the last, his management task remains as daunting as ever.