ITV’s slow decline is well known and the broadcaster revealed the extent of the reduction in its advertising revenue this week. There is already a UK-wide £40m “regional savings” programme in the pipeline, that will be completed by 2009.

Although Wales is not at the front of the queue to completely lose regional coverage from ITV it will be hit very considerably as investment through ITV Wales is reduced: with a virtually non-existent ‘national’ press, no independent radio stations based in Wales and coverage from UK-wide media outlets that is ‘patchy’ at best.

Michael Grade, ITV executive chairman, warned this week that ITV’s £1bn programming budget could be reduced unless regulatory burdens are removed. The IWA has already identified a problem with other figures from ITV: Ofcom, the regulator, produced a spend per head figure for ITV, based on a private ITV submission in 2006. Ofcom said ITV’s spending in Wales per head was £4.30. Given the number of heads in Wales this equals about £12.9m. However, at the Assembly’s Broadcasting Committee Michael Grade said the entire cost of ITV Wales’ operations was “just over £9m”. Yet, Ofcom has already accepted in principle that ITV’s claim that its public service broadcasting costs will exceed the benefits by 2009.

Having a viable alternative in Welsh broadcasting to the current channel 3 licence arrangement is a vital bargaining chip as Wales secures plurality in broadcasting. A plan to give Channel 4 extra investment through BBC Worldwide has already been dismissed. The BBC denies the ‘excess licence fee’ that Ofcom has identified exists.

The BBC Trust chairman said in May 2008: “Some observers have spotted the BBC's fund to help elderly and disabled people get the benefits of digital switchover and come up with the bright idea that, once switchover is complete, this fund can be used for other purposes. What they don't seem to have noticed is that the fund will have been spent by the time the current licence fee settlement expires, and who knows what will happen to the licence fee after that?”

There are already other ideas on the table for Wales. Ron Jones, chairman of Tinopolis, has suggested a Welsh Public Service Broadcasting agency. Another possibility is to have a separate channel 3 licence for Wales. However, any licence holder(s) would still probably need public funding to survive. These options warrant fuller examination from Ofcom – and further debate in Wales.

The owner of the Western Mail, Wales’s sole national newspaper, is struggling. Yesterday Trinity Mirror's shares fell to around 105.75p at 4pm, down from the closing price of around 151.50p last Friday. The fall followed yesterday morning’s announcement that Trinity Mirror’s full-year operating profit would be about 10 per cent below expectations.

The reasons for Trinity Mirror’s troubles are numerous. As the IWA’s recent report, Media in Wales – Serving Public Values, showed circulations have fallen dramatically, even since the inception of the National Assembly in 1999. Its circulations continue to slide. Advertising is a regional newspaper’s lifeblood and in the case of Media Wales (Trinity Mirror's company in south Wales) it has been bleeding away thanks in part to the consumer slowdown affecting both classified and display advertising and to wider challenges, including technological developments. Central to its plight, however, is shareholder pressure - the pressure to grow profit every year. In television ITV plc is scaling back its regional output across the UK thanks again to the pressure of the shareholding model. Its shares have also taken a battering in recent years, falling from 115.0p a year ago to around 47.5p last Friday. As the financial screw tightens for ITV the decline of regional programming is accelerated.

The lesson to draw from the (mis)fortunes of Trinity Mirror and ITV plc is that the conventional shareholder model just does not seem appropriate for media organisations that have such an important public service role. Choice is important for the citizen: it can promote healthy competition and media plurality; and, most importantly, gives the citizen democratic power. Whatever system we have in place must allow the citizen democratic power to choose.

Yet, in recent years many in and around the media industry have have tended to focus - perhaps too much - on plurality of media ownership rather than plurality of output. At the moment only the BBC seems immune to shareholder cost pressures. The BBC stands as the exception, with its funding by the licence fee. In Wales the BBC is the only national radio service and, if ITV plc's decline continues, could be the only player in television media as well. This surely cannot be healthy for Welsh democracy.

Strong views exist on the interconnected subjects of profit, incentives and salaries. These debates often lead into wider issues of the public and private sectors. Tonight John Hutton, the UK Government Minister for Business, Enterprise and Regulatory Reform, will say to the Progress organisation that 'Rather than questioning whether huge salaries are morally justified we should celebrate the fact that people can be enormously successful in this country.'

These debates have a resonance in Wales, where there are particularly strong views about the roles of the private and public sectors. The One Wales coalition agreement said 'the people of Wales sought a government of progressive consensus' in the May 2007 elections. This year the IWA has been hosting seminars to discuss this consensus, featuring talks from John Kay (economist and FT columnist) and Will Hutton (Observer columnist and Chief Executive of the Work Foundation), with David Marquand (former MP) and Peter Stead (Welsh historian and cultural commentator) to follow.