Mark Thompson, the Director General of the BBC, has hinted that he would back a merger between Channel 4 and Five, but insists that more focus should be made on migrating beyond traditional television.

With Channel 4's financial difficulties widely discussed and Five being hit hard in the recession, Thompson believes that the time has come for difficult decisions.

In an opinion piece penned for the Financial Times, Thompson says: "A strong Channel 4 is important, but the question of public service broadcasting beyond the BBC runs wider than any one channel or institution."

Merger

A merger between Britain's fourth terrestrial broadcaster Five and Channel 4 has been mooted for some time, and is believed to be considered one of the more practical options for steering public service broadcasting (PSB) through troubled waters.

"Consolidation could offer the prospect of both short and long-term benefits: immediate cost savings and an increase in scale in key markets from advertising sales to programme acquisition, but also the chance for a smaller number of larger players to focus on credible and affordable digital plans," continues Thompson.

"If the goal is sustainable PSB beyond the BBC in the long term, consolidation may be part of the solution."

Worldwide

Another solution that has been offered is to hand BBC Worldwide to Channel 4 – the arm of the BBC that makes money through the likes of DVD sales and global rights to popular shows like Strictly Come Dancing.

"The BBC's own delivery of content to the public and its ability in the downturn to invest substantially in the creative industries will be more important than ever," writes Thompson.

"But we must share the benefits of our scale and technology, as well as looking at how BBC Worldwide, our commercial arm, can help. We are engaged in positive talks with other broadcasters exploring various industry partnerships that – if they occur – will deliver at least £120m of benefits to the other PSBs each year by 2014.

"But policy makers need to look at other levers, including consolidation, regulation and competition."

Thompson believes that the more pressing need for PSB is how to transcend the normal channels in an increasingly convergent world.

"The biggest flaw in the initial diagnosis of the problem was that it missed the most serious challenge: how public service television can migrate beyond traditional television to digital platforms; and how inspiring content, delivered in services that are free at the point of use, can stimulate demand for universal high-speed broadband," he adds.