Speaking at a Royal Television Society dinner last night, Bazalgette argued that the debate about which broadcasters should receive what proportion of public funding was largely irrelevant, with public service broadcasting funding being hinged too much on the old established players such as the BBC and Channel 4.
He said: "We've all been facing in the wrong direction and obsessing with the institutions of the old world. Let's turn around, face the new world and start to imagine the possibilities."
Instead of continuing with the old model, Bazalgette proposed the adoption of an online system he called "Boggle", where any would-be comedian, writer or musician could post their own content, with the most voted for receiving programming funding.
Bazalgette suggested that arts institutions, such as the English National Opera (on whose board he sits), could forge links to Boggle and ultimately produce PSB programming themselves.
He said: "Boggle would link the existing offerings of museums, galleries, theatre companies, opera houses and concert halls. Why shouldn't Nicholas Hytner at the National Theatre commission and distribute video drama? Why shouldn't Nicholas Serota at the Tate make art programmes?"
In order to fund a shake-up of the existing PSB system, including his Boggle concept, Bazalgette proposed the sell-off of various BBC assets and parts of Channel 4; releasing ITV and Five from PSB obligations and redistributing the £150m in excess license fee, which has been put aside for the BBC to fund digital switchover and not available until 2012.
He also argued that giving Channel 4 public money would work to the detriment of its risk-taking approach to programme making. His comments come in stark contrast to Channel 4 chairman Luke Johnson who is asking for public cash.
His comments follow shortly after Ofcom published its public service publisher concept.
Bazalgette's own independent production company was behind programmes including 'Changing Rooms' and 'Ground Force', before he sold it off to Endemol in 1998.