Public service broadcasting is when the members of the public pay for channels through a TV license. This is has to be paid for by anyone that owns a television and also tax payers. Because of this, the channel has to be suitable and must cater for all audiences.
The aim of this is to inform, educate and entertain.
The BBC is also funded by selling merchandise and programmes.
Many BBC programmes are sold across different countries, for example BBC have sold some drama and comedy programmes to Australia's TV company Foxtel quite recently.
A good example of merchandise being sold to help fund the TV channel could be Doctor Who.
Bilbiography
http://www.abc.net.au/news/2013-04-17/abc-disappointed-as-bbc-sells-programs-to-foxtel/4635492
http://www.bbc.co.uk/aboutthebbc/insidethebbc/whoweare/publicpurposes/
en.wikipedia.org/wiki/Public_service_broadcaster
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