The BBC hopes that Lily Allen will become, at least for a while, the face of its underfire digital channel BBC Three. The pop star, who is lined up to host a chat show next spring, has just the right credentials: she’s interesting and human, but not too risky. Think about Joss Stone or Amy Winehouse as possible alternatives and you get the idea why she has been chosen.

Of course, being 2007, it will not be enough for Lily simply to front the programme Jonathan Ross-style. In the spirit of the Facebook era, viewers will be able to become friends of Lily via a BBC website and help to shape the programme by suggesting the questions that she should ask guests - the kind of sensible television-to-web integration that smart new channel controller Danny Cohen has had on his agenda since the day he arrived this year from Channel 4.

This kind of programme is targeted exactly at the younger viewers that BBC Three aims to serve and is hardly likely to find offence with anybody who actually watches it. Yet if you believe the critics, whose ranks include John Humphrys, the channel is so chock full of unBBC nonsense that it is a disgrace to broadcasting. Their argument is based on programmes they have almost certainly not watched but whose titles sound outrageous enough – F*** Off, I’m a Hairy Woman, My Man Boobs and Me, and Teens Addicted to Porn to name a few. Not the most tactful phrases by any stretch, but it is a weak argument on which to damn an entire channel.

In fact, the titles – like the occasional newspaper headline – are actually somewhat racier than the shows they represent. Meanwhile, a glance at current and recent schedules reveals there is plenty of decent comedy on BBC Three, including the surreal The Mighty Boosh and the award-winning Gavin & Stacey. And in Can Fat Teens Hunt?, which is airing at present, the channel has a surprisingly addictive reality show: watching overweight teenagers trying to muddle through in the Borneo jungle is more compelling than it sounds. It isn’t Newsnight, but it isn’t all bad television, even if some of the comedy is more miss than hit.

The only people who ought to be offended by any of this are the suits at Channel 4, who are seeing the BBC start to move its tanks squarely on to their territory. The folks at Horseferry Road are the ones who should have snapped up Lily Allen, who may well do better than Charlotte Church, although everybody is allowed to fail when it comes to matters of taste. However, Channel 4’s programming budget is more than five times that of BBC Three’s, so it should be able to make some better telly than its new rival, and nobody can be insulated from competition in the digital era.

As for the rest of us – the viewers – channels as brands still matter, regardless of what we are excitably told about on-demand viewing being the death them. And the point of creating new channels is to create an environment that will retain and attract viewers, which is why MTV or Sky News or Discovery exists. The BBC, being funded by the licence fee, cannot afford to be unpopular and nor should it be. So there is no reason why the corporation cannot create a channel aimed at 16 to 34-year-olds, although when it does so it must strive for a quality and originality that is not found elsewhere.

Last year, BBC Three spent £92.9 million, and, although the budget has since been trimmed to reflect the recent cost cuts, it is down only a few million. Given that BBC Three attracts only 1 per cent of all digital viewing, it is pretty easy to suggest that it should be axed so that the entire BBC newsroom may be spared from any cuts. After all, News has a divine right to send seven journalists from four different programmes to the same murder scene when a couple may well do.

Even the viewing figures are not as bad as suggested: when BBC Three is on (from 7pm) it gets 3.4 per cent of the 16-to34 audience. That’s still too small for the near £90 million that it now spends, but its market share is growing – it was 2.4 per cent in 2005 – and there is already enough to build on.

Forget shutting BBC Three: when it comes to saving money at the BBC the most sensible option is, in broad terms, the one that has been taken – spread the pain across all genres and all channels, hit BBC Three harder than BBC One peaktime but recognise that in this phase of the digital era it does have a place. Lots of channels is, after all, where the future lies, even for the corporation, and on this occasion Mark Thompson’s defence of BBC Three is quite right. Amy Winehouse may finally be going into rehab, now that the singer has cancelled her tour. Yet her constant battle with drugs – and the endless press exposure – has hardly dampened sales. Nobody from her record company, Universal, would say as much in public, but ask them privately, when no journalists are listening, and you might get an admission that although such conduct can never be condoned, sales are good.

Make no mistake, Amy is still big business for Universal, even though her album Back to Black was first released last year. It has sold 1.5 million copies in the UK and sits on the charts at a respectable 9, a full 57 weeks after its debut. Worldwide, it sold 3.3 million copies in the first nine months of the year, making her Universal’s bestselling act in that period, according to the most recent figures issued by the company.

Drugs don’t always work when it comes to selling music, otherwise Pete Doherty would be a bigger act. What also drives sales is the sheer quality of Winehouse’s voice and the songs, which have an extra resonance against the tabloid backstory. But it is troubling that such a high-profile battle with drink and drugs ends up as such a nice little earner for the artist, her management and the record company, even when you consider that no one forces anybody to buy the CD.

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