MIKEY ROBINS, PAUL McDERMOTT and JULIE McCROSSIN (left to right) will be joined by some of the best comics in the business, including Scottish funnyman EDIE IZZARD, best known for the film 'Lock Stock And Two Smoking Barrels' and the BILLY CONNOLLY special 'Erect For Thirty Years'.

This will be GNW's fifth year at the festival, an event that attracts the biggest names in comedy from around the world.

The Melbourne Town Hall was also the venue of last year's GNW visit... and festival-goers are no doubt anticipating what the crazy team will throw at them!

It took three and a half hours to film the 60 minute show and host Paul McDermott made several barbed remarks aimed at the production crew.

Most delays seemed due to audio problems - guest artists Killing Heidi were asked to repeat a performance of their latest hit, "Live Without It", causing McDermott to comment that the work experience kids were obviously doing audio. Other barbs included: the audience was "getting value for money with eight hours of taping", referring to the venue as the "stadium of hilarity", plus telling the audience how lucky they were to "see how bad television is made".

But the biggest hint of dissatisfaction came when McDermott quipped none of this sort of stuff happened when the show was at the ABC. He then shouted: "We wanna come home", and the mostly young audience responded with wild cheers.

How much of McDermott's jibes were simply part of his cheeky, edgy humour is hard to say, but "Insider" suspects that the future news might not be all that jolly for Ten with the show still struggling in ratings.

In one blokey, giggly chinwag overhead by more than 1 million eavesdroppers, old friends Tim Ross and Merrick Watts are discussing the shame of being posted around a golf course by a group of elderly female golfers with gigantic "mummy bulges". They've just moved on after concluding that all buffed men over 35 should be banned from the gym because they make young blokes with man boobies look bad.

It's 4.30 on a Tuesday afternoon and all along the FM dial a collection of twittering, gag-cracking, caustic comics are doing their version of the Nashville music writer's eight-hour working day.

In they go, to radio studios all over the country, "doing funny" for listeners who want their stand-up served lying down. That steady stream of giggles that comes filtering out of your car radio every breakfast and drive-time is worth millions, as are sought-after radio jokesters such as Wendy Harmer, Andrew Denton and the now departed Tony Martin and Mick Molloy.

The problem is, as the earning potential of the country's best known comedians has soared, decent breaks for new talent have dwindled exponentially. In the space of a decade, dedicated comedy venues in Melbourne, once the centre of Australian comedy, have declined from 14 to just one.

It is a similar story in Sydney.

Triple J comedy duo Merrick and Rosso excused themselves from the comedy stand-up circuit almost three years ago. Ross says the pair saw the writing on the wall, that people were getting bored with straight stand-up, and tried something different. They introduced prank phone calls, projectors and video into their show and before too long were making their television debut on Foxtel's comedychannel.

I think you have to be aware that there's a time for purity in art and I don't think now is one of them," says Ross. "The industry is in a dip at the moment because everyone's technology obsessed … it's not enough to just be funny. You have to come up with new ideas, market yourself, attack and make people come and see you, and I'm not sure many people are doing that. I don't think you make a living on the circuit anymore."

The duo hasn't anticipated a career in radio but recognised that mainstream TV breaks had become increasingly difficult to find. At the same time, other dependable avenues for comics are also disappearing. Development money in TV networks, particularly at the ABC, which traditionally fostered new comic talent, has all but dried up - along with the mettle of commissioning editors.

Radio and pay-TV are fast moving to fill that void, particularly the comedychannel, which has already sired and married off comedians such as Merrick and Rosso and Rove McManus to the big networks.

That's fine for the happy few. Elsewhere, the dip has hit comedy where it hurts - right in the bottom jokes. The Melbourne Comedy Festival, which opened on Thursday, is really the last laugh for grassroots comedy. In its 14-year history, turnover has grown from $400,000 in the early years to more than $2 million today. It is the one time of the year Melbourne audiences seek out live comedy en masse and the best chance any amateur comedian has of getting a break.

The stakes can also be high for the professionals. Ubiquitous Melbourne comedy writer and stand-up comic Dave O'Neil no longer counts himself among the thousands of comedians on the breadline, working the pub circuit for loose change. Better known among industry players than comedy consumers, O'Neil makes a good living because he is willing to accept a variety of jobs. On the day we speak, he has done his regular three-hour radio breakfast show, an all-day shoot for the comedychannel and is limbering up for an 8.30pm stand-up at the Melbourne Comedy Club - "a factory" for stand-ups. On top of that he is in the middle of launching his Unfit for Life book - a comprehensive almanac for slackers.

He's a hard worker and for that he earns astoundingly good money - way more than $100,000 last year. But for him, as with so many other comedians, festival performances are still about making the right connections for the next step in the career ladder.

It's not just a comedy festival; it's a trade show - and director Susan Provan will happily admit as much.

"It's true, comedians will often chart success in a festival not from what they make at the box office but if they managed to make new contact," she says. "Industry people, casting and ad agency talent scouts come from all over Australia and festival directors from other parts of the world to see what's going on."

The opportunities are there, but it's not the relative bonanza of more than a decade ago. The rash of seminal Australian comedies, which started with Rod Quantock's Australia You're Standing in It and The Gillies Report and arguably peaked with The Big Gig, D-Generation, The Comedy Company and Full Frontal, created enormous opportunities for both comic performers and writers.

More than 10 years since those shows introduced Steve Visard, Paul McDermott, Andrew Denton and Rob Sitch to big audiences, the same school of comedians still dominate TV comedy. The only difference is these days the comedy has taken a more sophisticated turn.

The Late Show metamorphosed into Funky Squad, Frontline, then The Panel; The Big Gig into shows such as Good News Week. For Visard, king of TV comedy production in this country through the company he founded and chairs, Artist Services (soon to be known as Red Heart Productions under a merger deal), Fast Forward turned into the David Letterman Late Show-derivative Tonight Live. Sketch shows, the comedy barns for aspiring stars, are all but dead.

In their place is what Good News Week's executive producer Ted Robinson calls "smart-arsery". Robinson argues that shows such as Good News Week not only provide huge opportunities for emerging comedians but stretch the boundaries of the old TV sketch comedy formula.

"They not only give comedians a chance to demonstrate how quick they are on their feet but also fold in semi-prepared material so they can look even funnier and more spontaneous than a human could ever expect to be. There's this whole thing about getting people sitting down and talking. That thrills me because that's the sort of thing I've been trying to do for years. I've always held television can be about wit and talking, and not just about footballers dressing up at frocks."

Such shows are not to everyone's taste of course, a fact attested to by Good News Week's continuously disappointing ratings. What's more, news of the new TV-influenced style of Australian comedy has been slow to reach audiences abroad. No amount of sophistication, it seems, can convince the world that Australian humour is anything other than "a bit rude".

Karen Koran runs the Gilded Balloon - one of Edinburgh's most famous comedy venues - and is an ardent champion of Australian humour. She has hosted all of this country's best known stand-ups, including Judith Lucy, Wendy Harmer, Rachel Berger, Greg Fleet and Steady Eddy. Yet even she will admit the content can sometimes be a little raw for the genteel British ear.

"They're not scared to say what they think. Some English may find that distasteful - personally I don't."

Although shows such as Good News Week and The Panel are trying to turn that view around, comedians such as O'Neil, who cut his teeth on Full Frontal and Jimeoin, still mourn the death of the good, honest sketch show.

"There always used to be comedy shows like Full Frontal for young people to get a foot in the door, but there's no big sketch show at the moment," O'Neil says. "There doesn't seem to be any space for comedy at the ABC anymore."

Much fuss was made of the ABC's newest venture, BackBerner, supposedly a reincarnation of Max Gillies-type political satire, but O'Neil says the public broadcaster is no longer pulling its weight. Within the comics-without-contracts community, that would appear to be the main complaint; although the networks plead ratings and financial imperatives as the justification for not nurturing new talent, they will happily let someone else take the risks and pluck ripening stars as they emerge.

"The major broadcasters, in radio and TV, all reap the benefits of comic talent once it's developed and famous," says Provan. "For them, comedians are another generation of pop stars who can create large amounts of high-rating product, but there's a bit of a reluctance to actually invest in the bottom end of the market and that's where people really get their opportunity."

Provan is also critical of the networks' mercurial approach to new talent, and cites the Nine network's hasty signing of Rove McManus and Mick Molloy last year in an attempt to throw off its stodgy mantle - only to lose its nerve within months.

There is still no word on whether young Melbourne comedian McManus will get a second bite of the cherry thrills this year.

Although the show rated well and fulfilled its expectations - drawing a badly needed younger audience to the traditional family channel - Nine continues to drag its feet.

Then there was the ribald but ill-fated Mick Molloy Show, which was tipped to be the cutting edge replacement for the comfortably frumpy Hey! Hey! It's Saturday format. The show should have been hurricane proof, with a line-up of the country's biggest crowd-pulling comics headed by one of the most successful and popular radio comedians. Why that didn't translate in TV terms is not a question Nine spent much time pondering. Instead, it crumpled at the first missives of disapproval from viewers accustomed to Nine's traditionally sedate and family friendly brand of humour.

"I was really disappointed it got pulled off air," says Provan. "I think Mick's an extraordinary talent and I can't believe something could not have been saved from that."

What concerns Provan most about the networks' pathological aversion to risk-taking is not only that they are limiting their future star pool but that they may also be holding back the progress and development of mainstream comedy in this country.

"I actually think comedy is ready to expand a bit more and I worry about the conservatism of the networks. I worry about the extent to which they can compromise developing a taste in the community for new and interesting things because I think the general public are open to things."

Good News Week's Robinson sees things differently.

"At least Nine had a go. It was a well-intentioned attempt to make itself less moribund. They got rid of Daryl [Somers] and got Mick Molloy [but] they still have the same commercial imperative so they couldn't give [the show] enough chance to find its feet."

As the former commissioning editor for the ABC's comedy section before moving to Ten with Good News Week and the brains behind seminal shows such as The Big Gig and The Late Show, Robinson is a fairly recent defector to commercial TV. But he will concede that the networks have largely failed to foster new talent and that the ABC, once fertile breeding ground for comic talent, "is a bit lost at the moment".

In such a climate, it seems, it is the old jokes that are drawing the biggest laughs, as The Wog Boy, the film incarnation of the long-running Wogs out of Work gag will attest. It's reward for ploughing well-trodden ground was more than $4 million in the box-office takings in its first week - and all because it could raise a giggle.

"We are looking at a whole range of things" said Mott

"We are also working with Paul McDermott on various ideas- he is part of the equation for this year."