For executives in the BBC's Future Media and Technology (FMT) department – who, still flushed with the success of the iPlayer, tend to see themselves as gatekeepers to the BBC's digital future – last week was not a good one. First they copped most of the blame for the £100m failure of the BBC's Digital Media Initiative: the pan-BBC, end-to-end digital production and archive system that never actually worked. At the public accounts committee on Monday, even senior managers who had once been ardent supporters of the project coalesced around the view that the technology had failed to deliver effectively. In terms of internal BBC politics, it was clear that there had been a lengthy bureaucratic battle, and the outcome was widely seen as the technologists (those eager apostles of the "new"), losing out to television and its producers – in other words the "old".

But then there were two other pieces of news – both understandably less noticed than the DMI debacle but with at least as much longer-term significance. Again, there were clear signs in both cases that the BBC's technology division was on the wrong end of a strategic tussle. First there was the BBC Trust-commissioned review of the BBC's distribution arrangements. That is the transmission systems for both traditional television viewing via digital terrestrial, satellite and cable on the one hand, and non-traditional online and on-demand viewing via the iPlayer, YouView, connected TVs, mobile phones and tablets on the other. It was an exhaustive review that broadly supported the BBC's efforts to remain universally available and free at the point of use, with the same array of services across all platforms and devices and representing good value for money and so on.

But look a little closer and something else becomes apparent. It's all written in the code of cautious "don't upset the customer" language, of course, but the report paints a picture of an organisation that has perhaps given too much prominence to its online/on-demand offerings – run by the technology division – and not paid enough attention, or given as much prominence, to its more traditional broadcasting operations. Whereas the online distribution bit has a seat on the board, the traditional bit doesn't. In similar vein, not all of online distribution's costs are applied to it when they are reported in public. The report goes on to suggest that data about emerging trends in consumer behaviour should be better shared around the organisation.

This last point is particularly significant given the balance the BBC inevitably needs to strike between traditional and online distribution, and the fact that the vast majority of BBC content is still consumed via traditional means. Some iPlayer numbers for hit shows such as Top Gear and Sherlock are eye-wateringly large, but ultimately it currently represents around just 2.3% of BBC hours viewed. When all the costs are taken into account, roughly 12% of total distribution costs (£30m of £233m) delivers just over 2% of viewing.

So online television delivery might be the future but it's a) much more expensive than broadcasting over the airwaves, and b) hasn't happened yet. Hence the overall sense of the trust's review that online and traditional distribution need to be considered together and given more equal weighting. That's not something that will have gone down well in the court of FMT, where the addition of a +1 broadcast service for BBC1 was seen by some as undermining the case for the iPlayer.

Then there is what may be the biggest blow of all. The news that the BBC (along with ITV, Channel 4 and Channel 5) are going to cease funding further development of YouView and shift the focus to developing and nurturing a new-generation Freeview service. YouView was originally the baby of Erik Huggers, the BBC's former FMT director. It was his belief – and in the wake of the iPlayer's huge success the BBC's most senior management got right behind it – that on-demand delivery of television via the internet was the future and that YouView could be the way to deliver it, universally and free at the point of use. It was to "revolutionise the living room" and be the upgrade path Freeview needed to compete with cable and satellite. But currently 97% of YouView boxes are there as part of pay-TV contracts with BT and TalkTalk, and the failings of YouView technology (which is out of date and not supported elsewhere) mean that unlike Freeview it is not integrated into new TVs. So it is not universal and it is not free. And while it might suit BT to have a system based primarily on internet delivery – broadband is its core business, after all – it really doesn't suit the broadcasters, most of whose viewers still get their television programmes over the airwaves.

Which explains why the BBC and the other broadcasters have just opted to develop a new Freeview Connect service instead. Still based on digital terrestrial transmission of linear channels, the new boxes (or built-in tuners) will feature internet connections – thus enabling viewers to access on-demand services, but via a system that will still have the potential to be universal and free at the point of use.