Conor Dignam on Broadcasting

The BBC can afford the move to Salford if it really wants it

Hand over the cash or the puppy gets it" was pretty much the threat BBC director general Mark Thompson made in a speech last week.

The cash of course is the 1.8 per cent above-inflation licence fee settlement that the BBC is demanding from government for the next seven years.

And the poor puppy with the gun barrel being held to its head is the BBC's plans to move 1,500 staff up north to a new media centre in Salford from 2010.

BBC departments due to make the move include children's, new media, and Five Live. It would be the biggest move of people and power out of London that the BBC has ever undertaken. Its impact on the economy of Manchester and Salford and on the creative community in the north would be enormous.

Of course this isn't simply an act of altruism. It's no coincidence that the BBC's regular surveys of support among licence fee payers finds that the further north you go the weaker is the public backing for the BBC. So the BBC has some solid reasons for making this move.

But there has always been an important caveat fixed to the move north - it was dependent on a favourable licence fee settlement for the new charter from 2007. So over the last couple of years the move out of London has become a hostage of the licence fee settlement.

Last week Thompson finally made it clear that the move would be one of the things on his list of "nice but not vital" that might have to be axed if the BBC doesn't get the cash it needs.

Both Thompson and Grade insist that they both really want the move to go ahead - but without a 1.8 per cent rise above inflation in the licence fee, the project would be endangered. Thompson insisted that a "more modest" plan might have to be explored.

Meanwhile, senior BBC executives have said that there is "no plan B" - meaning that all the planning has been done around the full move - and the whole thing would have to go back to the drawing board (or into the wastepaper bin). The BBC is also saying that if the licence fee negotiation drags on much longer, it will be 2011 not 2010 before a single soul from London sets foot in the new Salford operation. Clearly this is deeply disappointing for Salford itself which is backing the move and has helped identify a location at Salford Quays to house a new media village built around the BBC's presence.

Now all these fine plans are hanging in the balance. The problem for the BBC, of course, is that few actually believe they couldn't fund the move if they wanted to - even from a licence fee settlement below the 1.8 per cent above RPI that they've asked for. The corporation made much of its decision a year ago to go public with the sums it wanted for the licence fee - but many of its figures turned out to be spurious at best. It began by saying it needed a 2.3 per cent above RPI licence fee settlement. This would include £300m to pay a spectrum charge from Ofcom even though the regulator never said it planned to levy a charge against the BBC. This has since been dropped from the corporation's calculations. The BBC's inflation-busting licence fee bid also included a £1.4bn estimate for the cost of "super-inflation" - based on the rising cost of talent - yet just months later the BBC signed up Jonathan Ross in a new three-year deal for £18m. For its commercial rivals, the "jacuzzis of cash" available to the BBC because of the last licence fee settlement is helping to drive the super-inflation it is now complaining about.

And when it came to the move out of London, the BBC's figures have been wildly off again. First the cost was put at £600m only to drop to £400m when the BBC took another look at the figures and how the move would be organised. The final figure may be lowered again, when it becomes clear how many of the 1,500 staff will actually need to be relocated and how many will leave the BBC or move to new jobs.

But whatever the outcome of the licence fee negotiation, the BBC is going to have to see through its commitment to its move out of London.

It is vital for the future health and support of the BBC that it does find a way of reducing its focus on London and moves significant production and broadcasting centres out of the capital. The damage done to its reputation if it tries to downscale or cancel these plans will be enormous and long-lasting.

The BBC is a rarity in today's world - a public sector institution that works remarkably well, delivers enormous value to the country and for most people is well worth the £10.96 per month we currently pay for it.

So the BBC deserves and should get a healthy licence fee settlement - and 1.5 per cent ahead of inflation would certainly qualify as such. But it must stop using the move north as a hostage in these negotiations and commit to the project because it is the right thing for the BBC to do for its long-term future. Keeping these BBC departments in London after making such a good argument for moving them simply isn't going to wash. And Thompson and BBC chairman Michael Grade know that.

Conor Dignam is the editor of 'Broadcast' magazine

Let's not panic over YouTube. Content will always be king

It's a tough job but someone has to do it... Last week, I spent three days around the beaches and bars of Cannes at Mipcom 2006, the annual international programme market for the TV industry. More than 12,000 people from 4,000 companies took part in this frenzy of TV buying and selling. The sheer volume of shows of all shapes and sizes was astonishing.

While thousands of programmes were being bought and sold, the conference being held inside the massive Palais des Festivals was pretty much agreeing that TV as we know it is dead. The buzz was all about "on-demand, downloads and 360-degree commissioning". During the event, it was announced that YouTube had been bought for $1.6bn by Google - confirming the demise of the old order in media.

The problem, of course, was that all around Cannes last week, that was clearly not the case. Old-fashioned TV shows, broadcast on old-fashioned linear TV channels, were doing fantastic business.

The BBC's new Saturday evening hit Robin Hood, made by the independent production company Tiger Aspect, was bought by broadcasters in Australia, New Zealand, Denmark, Spain and Portugal, with more deals likely to follow. Granada International was doing brisk business in ITV's returning gems Cracker and Prime Suspect, and formats like Pop Idol from Fremantle and Deal Or No Deal from Endemol continue to play to huge audiences around the world.

That is not to deny the digital changes taking place in the TV world and the challenges they present. But Mipcom is a welcome reminder that content is still king in the new age of digital media - and high-quality TV shows that engage and entertain audiences will remain at the heart of that world for a very long time to come.