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The EMP view of what Brexit means for the TV Market

Time to get a grip on the UK media's future and move on...

The largely London-based UK media industry seemed shocked to its core when the announcement of the 'Leave' vote was made in the early hours of 24 June. Despite the many voices questioning the polls in the days beforehand, and the fact that most polls were bumping against their margin of error, many businesses with a London-centric view of the world were genuinely surprised by the result, to the extent that most media companies were largely closed on Friday 24 June as normally robust media executives hid under their duvets and wondered what the future would hold.

Speaking that morning outside 10 Downing Street, David Cameron said it would be the next Prime Minister's mandate to decide when to activate Article 50 of the 2009 Lisbon Treaty. That provided some brief stability, as it is only that move which will formally set in motion the UK's legal exit from the EU. Theresa May has also made clear her view that until the UK government is ready with a negotiating position and a team in place to manage it, nothing will happen to start the process.

That should come as a huge relief to media companies, and I have spoken to senior executives in most of the UK's larger broadcast companies since the vote, including one client who had only just been awarded Ofcom licences and wondered if they were worth having. Today, we remain in the EU, nothing has changed, and even when Article 50 is activated, the UK will be bound by EU laws for two more years: it is only after that point that the film and TV sectors will change.

Of course at the moment, how it will change, and what the government's position will be remains a matter of deep mystery, but just like every other legal and regulatory decision by government, they will be listening carefully to interested parties and industry experts in coming to their view. And so to Important Point One:

The media business in the UK has a chance now to lobby and campaign for a future that works.

This is not a time to sit back and read blogs or Tweets and wait to see what happens. One key directive likely to come under scrutiny as we work out what to do next in the film and TV industries is the EU's Audiovisual Media Services, or AVMS Directive. So the key questions for any senior executive has to be, what do you like or not like about the current directive? Despite its importance, most people I speak to don't seem to know that it is being revised as we speak? Are we better in our out of the single market envisioned for digital services? In my experience the AVMS Directive has had both positive and damaging elements, and the lack of common enforcement and interpretation across member states has been incredibly frustrating. Have you tried launching a TV shopping channel in France?

Under the current rules, media services are regulated in their home country and are subject to limited EU-wide standards. Yet at the same time broadcast licences are recognised across the EEA, not the EU. Television channels licences in Iceland or Norway are free to broadcast in the UK without an Ofcom Licence. Is that a good or a bad thing? Do we want to maintain that? That brings me on to Important Point Two:

The UK is likely to remain a centre of broadcasting within Europe throughout my lifetime.

The fibre, satellite connectivity, tax and compliance regime, airport and travel links, existing relationships, the ever-growing heart of Sky in Europe at Osterley and our English language mean that the UK is likely to be the largest part of any international broadcaster's European plans for the foreseeable future. In fact, it is easy to argue that looking at our market in isolation provides the UK government with a chance to make the UK even more attractive with incentives and support for media and broadcasting, we are starting from a strong position, for most global broadcasters the UK is the largest business they have outside the US or their own home country.

If we retain our "European" status for the foreseeable future, which is what John Enser, partner at London-based law firm Olswang believes will be the case, then this would prevent the remaining 27 EU member states from blocking or applying unfair regulation to Ofcom-licensed media entities, according to a legal blog. Common sense suggests they are right, and the very real challenges faced by the financial services industry with 'passporting' simply do not apply to media and broadcast. The idea that you could at the stroke of a pen move every major American network EMEA headquarters from London to Frankfurt is absurd, and I can't see it happening, but the risks lead me on to Important Point Three:

DCMS needs to grow some metaphorical balls and fight for our industry.

Every industry in Britain will be looking for help and support from government as we face the future. We are going to lose flagship EU funding schemes, most notably the Creative Europe program and the MEDIA programme, which together contributed a combined €144 million worth of financing to U.K. media entities since 2007. We also risk losing our negotiating leverage across the European TV and film regulatory landscape, although my own experience this year of transferring broadcast licences from one EU member state to another makes me wonder how real that common regulatory framework ever was.

At the moment government officials at DCMS are often viewed as much as policemen of our industry as they are its ambassadors. That has to undergo a radical paradigm shift as one of the UK's largest export earners seeks to stand out from global competition and create an even bigger creative and production market. As long as we replace those EU schemes with new investments in our domestic production capability, and revisit our production tax break incentives then we can (and arguably much more easily outside the restriction of the EU) grow a bigger better hub for global film and television production.

It doesn't take much lateral thinking to envisage that tax-efficient environment extending to the technologies and processes behind the broadcast industry, and not just the making of content. Everyone should be lobbying DCMS now, outlining how they see government helping to build a UK which is able to support and grow the film and television industry. It's what all the professional bodies should be doing now: there has never been a more important time to renew your membership of PACT, or the RTS, and join committees and make sure your company doesn't treat professional bodies as a means to getting cheap tickets to events. We need a voice, so make sure your company is part of it.

Which leads me neatly on to Important Point Four:

It's time to end the free-flow of negative posts and comments in our industry

A Media Business Insight survey published in April of this year showed that proportion of people in the UK media industry who feared there would be negative consequences for our industry if we voted leave was 67%. Apparently just 22% said leaving the EU would have a positive impact on the media sector, with a further 11% uncertain of the consequences.

The vote has happened now, and everyone from farmers and fishermen to City bankers and car manufacturers are starting to plot their way to success in the new Britain, whether that is in the Single Market, the EEA or EFTA, or as a free-trading member of the WTO. We don't yet know which of those options will prevail, but much more importantly, we don't even seem to have started a conversation as an industry about which of those options we prefer. Instead I see too many senior figures in our industry posting (or even worse re-posting) negative stories about how the UK is in dire straits and headed to failure or on the road to becoming a Fascist state.

I don't see that future for us: if we can start a realistic dialogue about what a free-trading UK could do in film and television, I suspect we could come up with some breathtakingly innovative ideas. Let's not leave this to the conference and 'summit' piranhas to invent a new event and charge everyone a grand to attend it. Let's instead start a conversation here and now about how we can boost our industry in a post-Brexit world and if we do, let's leave the enduringly negative thinkers out of it: they don't have anything to add.

For more ideas or access to a cracking team of commercial and government experts at EMP, get in touch.


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