And finally... it's over to the electronic town hall

News-gathering has changed radically since ITN launched 40 years ago. In the near future it may be unrecognisable

Trevor Macdonald, Britain's most popular news presenter, will mark the 40th anniversary of Independent Television News in rather subdued fashion next month. ITN, producer of News at Ten, plans only a brief mention of the milestone during its flagship programme on 22 September, followed later in the autumn by a documentary to run on ITV.

But senior executives at ITN say the anniversary has provided an obvious chance for some serious thought about the future not only of ITN but of television news.

"The past 40 years were about teaching British viewers to get their information in a new way," says Stuart Purvis, ITN's chief executive. "The next 40 years will offer usnew opportunities, but also some threats."

The company has already begun to respond, aiming to sell its branded services into international markets and branching out into other areas of production: documentaries for cable companies and a new talk show hosted by Selina Scott to run on NBC Superchannel.

As the provider of news for ITV and Channel 4, ITN has a guaranteed basic income. But it must look elsewhere for real growth prospects, Purvis says. This is especially true at a time when the market is changing so radically, driven by two major forces: technology and competition.

Some of these changes are already under way. ITN, for example, has forged ties with NBC, the US broadcaster, and provides news services to NBC Superchannel in Europe. It plans trials of a new digital production system being developed with Sony of Japan, to improve its ability to create and distribute material to a growing list of customers. Like other news producers, ITN also has links with broadcasting companies around the world, exchanging material and in some cases sharing office space too.

Purvis is not alone in anticipating tremendous changes in the way news is gathered and broadcast in the UK. The traditional newscasters - the BBC and ITN - have been joined by a host of other players in an increasingly crowded market. Reuters, with a 38-year history as a supplier of television images, has recently become a programme-maker in its own right, taking over most of the news gathering and production work at Sky News, the 24- hour news channel that forms part of Rupert Murdoch's BSkyB satellite and cable network.

"We are a content provider," says David Kogan, Reuters' head of TV, "and we are happy to supply programming." Increasingly, Reuters is competing directly with some of its clients, such as the BBC and ITN. It is producing 35 hours of documentaries for NBC Superchannel, for example, to be hosted by David Frost.

The deal to supply Sky was perhaps a harbinger of things to come. Sky, says its director of programming David Elstein, had already "changed the shape of TV news in the UK. Sky offers round-the-clock news, giving viewers more control over what they consume. We had become used to three bulletins a day. That is no longer a constraint."

But Sky's audiences remain small and its operations probably loss-making. Even smaller are the numbers that see the output of the Financial Times, which has expanded its own television interests, providing business news to cable outlets.

"It is likely that the more channels you get, the more viewers will be able to select news in different ways," says Mark Damazer, editor of BBC TV news programmes. "But for the foreseeable future, the BBC and ITN will be the major terrestrial broadcasters."

Indeed, the BBC and ITN still dictate the standard of news in the UK. Elstein concedes that Sky News, anxious to avoid accusations that it was providing the tabloid TV version of Murdoch's Sun, stressed quality and comprehensiveness. But will that last? Won't the cost pressures, the explosion in TV capacity and, ultimately, the technological revolution heralded by digital TV change the face of broadcast news?

News industry executives agree that the fragmentation of the television market - the growth of cable and satellite and the promise of additional capacity in the form of digital TV within three to five years - will lead to a growing appetite for news. At the same time, cost consciousness, at the BBC as well as in the commercial sector, has meant cuts in staff, greater use of agency material, and a convergence in the look and feel of newscasts on the main channels.

All the same, those responsible for news at the major outlets insist that quality has not suffered, and that British viewers are still better served than those in Europe and the US.

Richard Sambrook, news editor for the news gathering side of the BBC, concedes that the decision to have a single staff for both TV and radio has been criticised. But he defends this "bi-media" approach.

"We have more people on the spot, with more foreign bureaux," he argues.

Damazer insists, however, that despite the growing reliance on agency material from Reuters or the US networks, the BBC has no intention of dispensing with its own network of bureaux.

"The industry has changed in the past 15 years," he says. "And there are now multiple sources of news. But to do it right, you have to foster the careers of journalists. The network has to be sufficiently resourced."

ITN has taken a slightly different route, as the coverage of the Bosnian crisis demonstrates. The BBC has been spending pounds 2m a year keeping a presence in the former Yugoslavia. ITN sends a crew only when news looks like breaking, doing a few high-profile stories and keeping costs down.

Both ITN and Reuters are in line to supply the basic news service to Channel 5, depending on which of the four consortia wins the licence. But nearly everyone agrees that the real revolution will come with digital TV. By proliferating the number of channels, digital provides great scope for specialist news channels 24 hours a day. Interactive services might also attract viewers keen to share their views on news events: an electronic town hall akin to Jeremy Paxman's You Decide. Altogether, there will be a huge appetite for programming, and suppliers will be scrambling to fill the space.

That work will be made easier by changes in production, also thanks to the digital revolution. News will be gathered in the field and sent via digital satellite to newsrooms. There, editors will take the feed directly, add library footage from a digitised library, and send it out over digital TV channels.

Few believe this revolution will jeopardise quality. "The digital revolution could actually be good for news gathering," says the BBC's Richard Sambrook. "It means we can create and move material around more cheaply." Indeed, there may even be advantages in seeing news gatherers specialise in regions or topics, creating high-quality packaged news features and reports to be bought on an open market by broadcasters.

The great fear, at least among senior broadcasters, is a tabloidisation of news. But this does not bother Sky's Elstein. "If the BBC is the Daily Telegraph of news, and Sky and ITN the Daily Mail, perhaps there is a gap in the market," he says. "I, for one, do not dispute the legitimacy of tabloid TV."

Besides, the tradition of broadcast news has become firmly entrenched, fed by the BBC's illustrious history and ITN's 40 years of service. Whatever else emerges from the digital revolution, the expansion of channel choice and the growing role of agencies and suppliers of current affairs programming, there is, as Sambrook says, "a premium on first-hand information and reporting".

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