BBC in drama of 21st century media

LONDON, Oct 17 (Reuters) - Having angered the Queen and the public, Britain's BBC is set to shed staff with sweeping job cuts this week in the biggest crisis to hit the world-renowned broadcaster since a government clash over Iraq. The publicly funded corporation, known for its excellence in journalism, has seemingly stumbled from one crisis to another this year, damaging viewers' trust and its credibility.

On Thursday, Director General Mark Thompson is expected to announce plans to cut up to 2,800 positions due to a tighter budget, with news and factual departments to bear the brunt. Staff and unions have warned the quality of its output will drop. Its bbc.co.uk/news Web site, which it says attracts about 35 million users a month from around the world, will also be affected, according to media reports.

The result is plummeting morale and questions over strategy."The mood is shocking," said one member of staff, requesting anonymity. But not everyone is convinced by the tales of woe. The broadcaster, which does not carry advertising, dominates the British media scene, drawing mass audiences to its main television channels and regularly setting the news agenda.

Its radio stations account for more than 50 percent of the market in terms of the number of listeners tuning in and its Web site is one of the most popular in Britain. BBC World, its commercially funded, international 24-hour news channel which broadcasts in more than 200 countries, BBC World Service and World Service radio will not directly be affected by the cuts, and BBC Worldwide is Europe's most successful exporter of television programmes.

Media analyst Claire Enders said the BBC has to be seen to be sorry when it makes a mistake, due to its position as a public broadcaster and the scrutiny that brings."All these games get played out in a very public way," she said. "Sack cloth and ashes, boo hoo, heads roll. But in the background is the exceptional performance of an organisation that has a guaranteed income. They are immensely fortunate."

To some, the BBC's problems reflect its struggle to adapt to the digital age. Fearing irrelevance in a time of so many digital channels, the corporation -- which is funded by a tax on television-owning households -- has launched a host of new channels, radio stations and interactive services to appeal to niche audiences. Its critics argue that this drive for volume, ratings and viewer involvement has led to its latest problems, including the fiasco with the Queen.

On that occasion, the BBC had to apologise after showing promotional footage for a documentary which wrongly implied that Queen Elizabeth had stormed out of a photo shoot with celebrity photographer Annie Leibovitz. That followed a string of admissions about faked competitions on well-known charity specials, radio stations and the popular children's series "Blue Peter", which hammered viewers' trust in the corporation once fondly known as "auntie".

The scandal has spawned damning headlines and red-faced on-air apologies. Steven Barnett, professor of communications at the University of Westminster, told Reuters the recent viewer deception was not as serious as the Iraq coverage row, but it could have more damaging consequences.

In 2003 the two sides clashed bitterly over a BBC story which alleged the government had hyped intelligence on Iraqi banned weapons. Barnett said that was an "old fashioned" clash which mostly drew the support of the public and the press. Caption:A shopper looks at television screens showing the logo for the BBC London news programme, in a retail outlet in central London in this March 2, 2005 file photo.