The BBC recently held an “impartiality summit” that revealed how biased its journalists are—in their reporting and their culture (see article from the Daily Mail here). In the words of one of the participants: “The BBC is not impartial or neutral. It's a publicly funded, urban organisation with an abnormally large number of young people, ethnic minorities and gay people. It has a liberal bias not so much a party-political bias. It is better expressed as a cultural liberal bias.”
There are at least two issues here. The first one is the public funding of media companies. The BBC is a dinosaur from days when governments in Europe controlled the radio and TV. Many other European countries had (and still have) the same sort of media funding. Officially, governments provide independence allowing journalists to do their work unencumbered. In practice, they often interfere in what is being said and by whom, thereby controlling (to some extent at least) news content. Instead, and as Christopher Coyne and Peter Leeson have shown in their research on the role of media, private media very often play a greater role in broadcasting the truth about government, markets, and democracy (see here).
The second issue is that of media bias. Is there a bias in the media in one direction or another? Even private media in Europe and in the US often seem to have a left-leaning bias for instance. Some economists have looked at the issue. One of the best works I know on the subject is in French: “L’attitude des médias de masse à l’égard du libéralisme économique” by my former professor Alain Wolfelsperger (published in Le Journal des Economistes et des Etudes Humaines, 2002). But mass media will always be biased in one way or another as they cater to the median audience—which in most Western countries oscillates around the center-left. And media bias disappears with specialization.
In any case, the goal of having state-funded media that purely reflect the opinion of the masses is hopeless. It is a waste of tax-payers’ money and it has opened the door to lobbying and government favors. Unfortunately, it won’t stop any time soon (e.g., the French government is soon launching a state-owned 24 hour information channel, when such a media already exists in France).