The public service publisher idea, the brainchild of Ofcom's chief executive Ed Richards, is here to stay but in slimline form. That was the message from the regulator today as it pegged the PSP's potential budget to between £50m and £100m.
Only last week, delegates at the Oxford media convention were assuming a £300m price tag - the suggested cost since the idea was first floated in 2004. So the downsizing of the budget is a significant shift in Ofcom's thinking as it looks to shore up public service broadcasting for the digital era.
The main reason, Ofcom says, is that because the PSP will focus on new media, the service will come cheap. We are not getting a fully-blown "channel" here, and probably not even a consumer-facing brand. Some of the ideas for the PSP mentioned by Ofcom include re-using content and user participation. The Open Media Network website outlines some of the ideas thrown up by Ofcom's workshops last year.
A PSP of this kind is good news for existing broadcasters because the threat of a new, handsomely resourced rival - a kind of Channel 6 - has receded.
There will be other potential benefits from today's decision for broadcasters interested in making public service programmes in the future.
The PSP's original "budget" was in fact a reflection of a £300m funding gap between what public service content will (theoretically) cost in 2012 and what broadcasters will be able to afford (based on predicted revenue).
The size of that gap hasn't been reassessed, so if the government decides that all of that gap should be plugged through direct intervention and the PSP costs just £50m to £100m a year, at least £200m of funding can go to other causes.
One beneficiary could be Channel 4, which has already started to lobby for some kind of outside help in the future. Chief executive Andy Duncan has said that the channel faces a deficit of up to £100m by 2012 if it continues funding public service broadcasting at current levels.
Whether Channel 4 would want direct funding that could risk compromising its political independence is questionable; the channel might prefer help through being allocated additional spectrum or being allowed greater scope for borrowing.
The other areas to which the government may decide to direct money are news and children's programming, which are valued by the public but vulnerable to commercial pressures as analogue TV is switched off by 2012.
All this will have to be decided at government level, once Ofcom has concluded reviews into Channel 4's financing and public service broadcasting. Consultants at LEK are reporting the findings of their independent study on Channel 4 to Ofcom in March.
Still to be decided is how any form of intervention would be funded. Options include diverting funds from the BBC licence fee, a World Service-style government grant, or a tax on the turnover of existing broadcasters.
Culture secretary Tessa Jowell gave the PSP a cautious endorsement when asked about it in Oxford last week, and Mr Richards has probably made his idea a lot safer today by making it less costly and less threatening to broadcasters.
