It's hard being both elated and miserable at the same time, but bi-polarism is the only way to describe the current state of the media business.

On the one hand, advertising is in meltdown and consumers are not buying any entertainment products except computer games (well, what is more fulfilling, middle-managing by day, or playing a level 60 warrior by night?).

One national newspaper editor has been telling those who care to listen that the market is the worst it has been for 30 years - although others come up with the not much more heartening observation that it was worse after 9/11 and in the early 1990s recession. And this is an industry that is going full colour.

Yet, on the other hand, there has never been so much good, bad and indifferent content around - whether mass popular programmes such as Britain's Got Talent, or the pages of newspapers hard to find in Britain before the internet, such as the New York Times, and a wealth of micro-creativity on YouTube or bands on Bebo.

Now, all this may be self-evident, but the bi-polarism is not what is worrying Ofcom. The regulator is grappling with how to safeguard “public service broadcasting” once the analogue television signal is switched off.

Over in the world of telly policy, a fun place in which broadcasters have to spend much time, there are worries about the future of children's programmes, regional news and whether Channel 4 can guarantee Big Brother for the nation after 2012.

It's an astoundingly claustrophobic space, in which only three media organisations really live: the BBC, ITV and Channel 4, which hardly reflects the nature of media or creativity today - and goes on in isolation to the commercial crisis that is facing the sector as the economy slows.

Even the orc-designers, or whatever it is computer games developers do, are having their own bi-polar moment.

The Canadians, whose climate is not much fun in winter, have been luring developers with generous tax breaks. It is possible to get 40 per cent off development costs if you make a game over in Montreal, while developers in Britain lumber on without much help at all, as high-skill, non-polluting jobs gradually drift overseas.

Perhaps they might instead go into the film business, in which there are lots of tax breaks, but no really viable companies, and frankly, not many brilliant movies either.

The point, really, is that the debate about public service broadcasting continues to focus on the wrong things. It continues to be a discussion about what tedious technical requirements should be relaxed, and about what, if anything, should be done about the supposedly struggling Channel 4.

Some of the technical requirements are outstandingly pointless: ITV says that it fills in forms to say where members of production teams live to satisfy Ofcom that it is meeting regional production requirements. That should simply be swept away.

Instead, the debate should be about something different, closer to what the games industry wants: finding means to encourage media and entertainment companies to invest in good-quality content.

There is no attraction in relaxing regulations, particularly in commercial radio, to benefit already rich men - Tabors and Bauers.

Any easing of the rules should be accompanied by incentives to encourage companies to continue to invest in content. With the advertising market in such a mess, incentives might not be a bad idea to help to keep the economy going too. Channel 4 might benefit also, avoiding the complex nightmare of getting a slug of cash from the BBC licence fee.

An incentive-based system - in which spending on content produced in-house would qualify for some sort of meaningful tax break - would have an extra advantage.

It would be media-neutral; even music companies might see some benefit. Although a few rules may be needed to govern impartiality in broadcast news, and to limit cross-media ownership, the problem is that Ofcom is a broadcast regulator - and so the question is whether its executives, or ministers, think a bit more broadly at a time when Britons are making wonderful content that the consumers and advertisers are reluctant to support.

— Aidan Barclay's refusal to appear before the House of Lords committee on media ownership has prompted Lord Fowler and fellow peers to ask that rules for summoning individuals before Parliament be made easier.

The chairman of the company behind The Daily Telegraph and The Sunday Telegraph, said that he never spoke in public about media issues, and does not wish to share his strategy with competitors.

Rightly, that was rejected by the Lords. Confidential strategy is never revealed by select committee hearings, and it is troubling that anyone who owns or runs a newspaper is not willing to appear before Parliament.

Newspapers demand transparency and openness - but as powerful, influential and visible institutions, their governance is a matter of public interest too. It is surprising, though, how many executives in the media business avoid public scrutiny. What are they being so reserved about?

dan.sabbagh@thetimes.co.uk

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