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New BBC Head Faces Range of Challenges, Opportunities

George Entwistle will take over as leader of the British public broadcaster on Monday.

LONDON - George Entwistle takes over as the new top executive of the BBC on Monday, facing a range of challenges and opportunities that industry observers have weighed in on over the course of the past few weeks.

News veteran Entwistle, who has two children, has served as director of BBC Vision since April 2011, a role in which he oversees all of the BBC's major TV channels. In the post, he was the executive with final responsibility for the coverage of the Queen's diamond jubilee, which drew more than 4,500 complaints, most of them focused on criticism that a river pageant didn't provide enough information and was presented like light entertainment.

Industry insiders describe him as a loyal BBC employee who has a lot of enthusiasm and tends to take a hands-on management approach.

Observers here suggest he must not only devise long-term strategies for the BBC's approach to international and digital opportunities, but also strengthen the financial footing of the U.K. public broadcaster, possibly by streamlining its bureaucracy to cut costs, among other things. At the same time, the BBC's revenue from the license fee that taxpayers must pay is expected to fall in real terms over the next few years.

The salaries of BBC stars have also caused some dismay here, and the BBC these days has to compete for talent in a more aggressive commercial environment created by BSkyB's increased content spending and ITV's success with such shows as Downton Abbey.

But some also argue that several of the BBC's biggest critics, such as Rupert Murdoch's News Corp., have been weakened amid the Leveson Inquiry into media ethics in the wake of the phone hacking scandal, which could allow the new BBC to play some offense.

Murdoch's UK newspapers and the Daily Mail tabloid are "damaged goods" following the Leveson Inquiry, former BBC boss Greg Dyke argued at the Edinburgh International Television Festival last month. "The Olympics summed up what the BBC is about...There is a wonderful opportunity for the BBC to restate what it's about over the next few years."

In a similar vein, Veep and The Thick of It creator Armando Iannucci this week said during an appearance here: "I think there's a growing recognition that the BBC, and indeed the UK's wider commitment across channels to public service broadcasting, has given us the very best television available." He added: "With a new director general there couldn't be a better time to reset the board and signal that we're just not going to take that kind of [political] interference [from some critics] any more."

In terms of future revenue, Entwistle will inherit a license fee agreement that will see the broadcaster's revenue decline in real terms. Dyke said that the unbundling of the taxpayer-financed BBC license fee from the inflation rate, which happened for the first time under outgoing director general Mark Thompson, "could be a problem for the BBC."

In several years, it could have 20 percent to 30 percent less money to spend, he warned.

But at least many in the British TV industry continue to support the sometimes maligned fee.

Lorraine Heggessey, executive chairwoman of Boom Pictures, has argued that the BBC license fee must remain a key funding source for the BBC, arguing that it "is still the most efficient way."

And while her brother James Murdoch famously criticized the fee at the Edinburgh TV festival a few years ago, Shine Group chairman Elisabeth Murdoch, the daughter of News Corp. CEO Rupert Murdoch, last month defended it.

"Though, I do imagine that George Entwistle's biggest challenge may be to demonstrate how efficiently that funding is being spent on actual content on behalf of the license fee payers," she added.

Industry observers predict that Entwistle will look for new revenue streams. "They could start to charge for the [digital video player] iPlayer after a seven day window," said Heggessey.

In terms of possible areas for cost cuts, some industry folks mentioned the BBC's in-house production infrastructure and staff. Andy Harries, CEO of TV producer Left Bank Pictures, said during a panel discussion at the Edinburgh TV festival that in-house production warrants a close look. "It's part of an old era," he said.

Heggessey said a cutback in in-house production makes sense these days as "the independent sector has proven itself more than capable."

Others cited the chance to trim complicated commissioning structures.

Entwistle will be under pressure to reevaluate the BBC's commissioning system, which many industry commentators and independent executives claim are cumbersome and unnecessarily bureaucratic.

Entwistle studied Philosophy and Politics at Durham University before starting as a magazine writer and editor before becoming a BBC trainee. He has been with the broadcaster since 1989.

As an assistant producer on popular TV show Panorama, he strenghthened his skills before later joining BBC Two's flagship current affairs program Newsnight.

Amid past criticism of executive salaries, Entwistle's annual pay package amounts to £450,000 ($730,000), down from his predecessor's £617,000 ($1 million).

One concern some have raised is that Entwistle doesn't have a strong resume in digital media. Nick Thomas, principal analyst at Informa Telecoms & Media, previously said: "The fears are that he is not enough of a digital bod to understand that for millions of its consumers, the BBC is now as much a provider of digital content as a broadcaster."

Peel Hunt analyst Patrick Yau expects the new boss to not shake the boat too much right away. "I would not expect major changes to the organization's approach over the medium term," he said.

Asked about Entwistle's biggest challenge, he said: "Whether he has the ability to deal with the inevitable politics that surround the BBC and can withstand the public scrutiny that goes with the role is difficult to say - time will tell."

Email: Georg.Szalai@thr.com; Twitter: @georgszalai