The wily chief executive, Mark Scott, formerly of Fairfax Media where he had seen first-hand the decimation of the business model as readers moved from buying newspapers to  free internet,  was determined it was not going to happen to the ABC.

Under Scott, the ABC quietly poured more money into digital services, including highly successful iView service, its websites and news services on mobile. Commercial media, notably News Corp Australia and to a lesser extent Fairfax Media, have cried foul at the taxpayer-funded competition .

But when Communications Minister Malcolm Turnbull took an axe to funding last month and cut $254 million over five years, the debate over what the ABC should be doing has suddenly come into sharp focus. Turnbull may well have intended the cuts to be absorbed through efficiency savings.

But Scott has seized the uncomfortable moment to do some re-aligning of his own, announcing that 100 people would go from News and Current Affairs to fund a $20 million digital investment program and 70 new digital jobs. He also called time on some long -running  ABC programs including the state-based  7.30, Bush Telegraph, and several Radio National programs.

Both inside and outside the ABC there is now furious debate over the role of the ABC. Is abandoning state coverage and cutting regional services for the sake of expansion into digital really what the national broadcaster is mandated to do?

Compering the Walkley Awards for excellence in journalism in early December,  one of the ABC's best known journalists, Sarah Ferguson, used the podium to deliver a forcefully articulated case for the ABC doing what its charter clearly calls on it to do – high quality indepth journalism, predominantly for TV and radio .

With Scott sitting almost at her feet, she derided the head of ABC Digital for referring to television and radio as "legacy media" to be " dealt with" .

"It's an interesting word – legacy, I think. You know that legacy is the word that Qantas uses to describe all those bits of the airline that aren't Jetstar,"  she said angrily.

"The way I look at it, 'legacy' is what my fast-departing colleagues, with their years of broadcast experience, leave behind for those of us who still hold fast to the idea that the journalism we do on radio and on television is important.

"These days, of course, they call it 'content'. You imagine what the digital future would look like without it."

But within the ABC there are some who are applauding Mark Scott's foresight. They point out that virtually no-one between ages of 12 to 34 watches scheduled  TV . They argue the ABC's future depends on  transforming and offering new types of programming attractive to younger audiences.

" I understand where Sarah Ferguson was coming from about wanting to preserve the integrity of what she does. She's done some amazing indepth journalism," says Dan Ilic, who filled in on 702's morning slot this week and who describes himself as an "investigative humorist". He's about to head off to San Francisco to work on a streamed program for Al Jazeera, which is at the forefront of digital experimentation.

"My gripe was her making fun of the digital audience. Because the digital audience is everyone," Ilic says.

"The battle for resources is the struggle. It's not about one audience over another."

Marc Fennell, who hosts Radio National's tech program Download this Show, reviews films on Triple J and anchors SBS's The Feed, says Scott's investment in digital services at the ABC is not just necessary, it's a matter of survival.

"To be a responsible public broadcaster you have to move into this space.  TV viewing habits are moving online. All the data shows this."

The ABC's own research shows the audience skews older.  OzTam reach figures for 2014 show the ABC is watched by 82 per cent of all over 65s (based on five minutes viewing a week)  and 69 per cent of over 50s. But that figure plummets to just 31 per cent for the 13-24s.

The pattern is similar for ABC Radio though thanks to Triple J, it has a solid 34 per cent reach into the 25 to 34 demographic.

Fennell laments that the debate over what the ABC should do has become conflated with the cuts.

"Unfortunately this is coming at a very emotional time, a very hurtful time, where people in the ABC are facing redundancy and being put in sharkpools. In another context we would be having a much more constructive discussion."

"Radio National where I work, has been doing some great longform in-depth journalism that works equally well on radio as it does as podcasts," he says.

" I bear no malice to Sarah Ferguson but her statement annoyed me because it's a time when we needed more nuance, not less," he says.

Staff at the ABC are now waiting to find out whether they have jobs beyond Christmas. People with similar skills have been placed in pools for assessment as to who will go and who will stay, a process that has been likened to the Hunger Games.

Quentin Dempster, the longtime face of the NSW 7.30 Report, already knows his fate. He is going.  On Friday he appeared before a Senate Committee investigating the impact of cuts  and presented a list entitled "Vandalising the ABC". In excruciating  detail it outlined the impact of the cuts for audiences, which he said had not been frankly stated by the ABC.

"What can be seen from the following impacts is evidence of the sacrifice of the ABC's fundamental Charter obligations, " he said

"The impacts raise a distressing concern that ABC journalism through the digital revolution will be turned into 'churnalism' servicing the relentless demands of the 24 hour news cycle."

Dempster said that Scott had claimed online and mobile were the key to securing the ABC's future but had not explained the nature of the content other than it will be content that attracts younger viewers.

Announcing the $20 million digital reinvestment,  Scott said his vision was to take the ABC's share of the digital audience from 25 per cent to 40 per cent.

"Mark Scott needs to explain exactly what content he will be asking taxpayers to reinvest in and how it fits with the legislated Charter of the ABC to enhance a sense of national identity, cultural diversity, to inform and, of course, to entertain. How will this content draw from the talents and ideas of creators around Australia and not just from Sydney? "

But Professor of Media and Communications, at Swinburn Institute of Social research Jock Given says history reveals debates over the ABC Charter go back as far as when it first ventured into making TV programs. They have continued as it opened shops, set up multiple channels and now digital services.

"One of the reasons you have charters for public broadcasters that are flexible is that you want institutions that respond quickly and creatively to change," he says.

Ilic says that in the past 12 months two interesting things have happened that point to Scott being on the right track. "Around the world broadcast television and radio have begun being referred to as `legacy media', and digital media is becoming just media," he says.

The second is that the mobile phone has replaced the television as the most popular "first screen", with the TV in the lounge room slipping into second spot.