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Peter Bazalgette, the broadcasting executive who brought reality television to Britain, tells Ian Burrell why the commercial break will soon be dead

Step out of the lift at Endemol UK, the creative hub of Britain's reality television culture, and you find yourself standing in a precarious mesh cage, 100ft above the ground. It feels like the prototype set for a celebrity bungee-jump reality show. And after being ushered into a whitewashed room, furnished with only two blue sofas and a small television screen in the corner, it is difficult to suppress the suspicion that you are being secretly filmed.

Eventually, Endemol's boss, Peter Bazalgette - the man who launched Big Brother in Britain - arrives. He is bearing the news that Endemol is in discussion with six British channels over proposals for 13 new reality shows. This prolific production schedule brings in an annual turnover for Endemol of more than £60m and infuriates those industry commentators who believe Bazalgette is single-handedly dragging British television into the gutter.

The London Evening Standard's vicious TV commentator, Victor Lewis Smith, who is Bazalgette's most spiteful critic, has a favourite joke. "The Bazalgette family first achieved prominence in Victorian Britain through their sterling work with drains and sewage," it runs. "How fitting that Peter is keeping the family connection in place by smearing our screens with excrement."

Baz, as he is known, professes himself unperturbed by "very subtle and original" comparisons to the engineering feats of his great-grandfather Sir Joseph Bazalgette. The criticism of Endemol's output - which includes the leisure shows Changing Rooms, Ground Force and Ready Steady Cook and the reality programme The Salon - amounts, he says, to the "drip, drip, drip of Metropolitan twaddle".

He says: "There are an awful lot of people in this country who are opinion-formers who don't particularly like television, or are too busy to watch it, who seem to have very strong opinions based on some halcyon period that they think they remember but I think they've imagined."

Bazalgette first attacked this "golden-age-ism" two years ago, during an intellectual backlash against the fever of public interest surrounding Big Brother. He claims that his faith in reality TV has been vindicated because fears that shows would become increasingly manipulative have not materialised. "It hasn't been getting more extreme," he says. "I'm a Celebrity... Get Me Out of Here! is the most amusing pantomime. It's not dark or immoral; it's just rather jolly entertainment." In fact, I'm a Celebrity... was not an Endemol production, unlike the extreme reality show Fear Factor, shown on Sky One, which has featured contestants eating horse entrails.

But a spectre hangs over Bazalgette's new golden age of television. As a non-executive director of Channel 4, he is acutely aware of the risk of what he describes as a "creeping structural problem with advertising" that could undermine the future of commercial TV. His fears are not based on the global economic downturn but on the effects of new technology that enables viewers to avoid watching adverts.

Personal video recorders (PVRs), such as Sky Plus and Tivo, give the option of virtually commercial-free viewing. At the touch of a button, a three-minute ad break can be whizzed through in six seconds. Bazalgette has seen his children, aged 12 and 16, use the family Tivo to strip out the commercials from the programmes they select. "When they watch telly," he says, "they time-shift half of what they watch; they strip the ads when watching commercial shows and they hardly ever watch BBC1 or ITV. There are some fundamental shifts going on."

Although only about 300,000 homes currently own a PVR, within 10 years the devices will pose a severe threat to traditional commercial broadcasting, Bazalgette believes. "I am not saying we are facing a cataclysm right now," he says. "But everyone is aware that there may be seismic changes occurring. We are going to have to come up with all sorts of dramatic new ways of getting advertising messages to people." He suggests that the future of subscription television could be one where "you get a cheaper subscription if you take ads" (and can be proved to have watched them, presumably).

He says: "That is a model where, rather than the viewer buying programmes from somebody, he is selling his attention. The difference in price for a lower subscription is the price of my attention."

Additionally, broadcasters may consider "more advertiser-funded programmes", involving greater use of sponsorship "with messages buried much more in the programmes". Such messages, he says, should not be subliminal - but product-placement in fictional programming should be acceptable.

"Frankly, we have lots of movies that play on television with product-placement in them. In future, there is probably going to be a role for product-placement in TV dramas. Viewers are perfectly intelligent about this, and as long as it's all upfront, there's not a problem."