Ian Brotherston, chief executive, TVT, offers his thoughts
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ContributorPublish date:
Jun 29, 2018
Following UK Prime Minister Theresa May's speech in March, which formally set out the country's vision for Brexit, the broadcast industry found itself firmly on the agenda for talks between the UK and European Union (EU) 27, with much debate around topics such as Country of Origin'. But a number of major broadcasters have since decided not to wait around to see what happens.
At the end of May, it was reported that Discovery is the latest international broadcaster to consider moving its European broadcasting base from London to another hub in Europe if the UK government fails to agree a broadcast licence deal with the EU. The report follows earlier news that Viacom International Media Networks, 21st Century Fox and Viceland have all announced their decision to start moving broadcast licences from the UK, as part of a pre-emptive measure to counter the uncertainty of the Brexit process.
As anyone working in the industry knows, the UK is in many ways Europe's broadcasting powerhouse. It currently provides the main European base for eight of the top 10 global players operating in the EU. How this role is handled in Brexit negotiations will have a critical impact on the future shape the sector takes in both the UK and the EU.
May's March speech touched on the Country of Origin' (CoO) principle in the EU, which allows a broadcaster or on-demand service provider to be licensed in any member nation for operation across the whole of the EU. This rule has played a significant role in the UK's development into Europe's major media centre.
To further complicate matters, the Audiovisual Media Services Directive could be subject to change too. Following discussions last week between the European Commission, Council and Parliament, proposed changes to the regulations will mean that at least 30 per cent of content programmes of TV channels, video-on-demand and video sharing platforms such as Netflix, YouTube, or Facebook will have to be European. A formal vote will be taken on this proposal in September 2018.
There is no doubt that the UK currently plays a pivotal role in EU broadcast. In fact, roughly half of linear channels licensed for satellite, cable and digital terrestrial television in the UK are not actually intended for broadcast to local viewers but target other EU populations under CoO rules. Independent research commissioned by TVT last year shows that close to 12 per cent of all channels broadcast in the EU are based in the UK. Every EU country has channels ranging from six to 77 that are licensed by Ofcom, the UK regulator, and broadcast in their local market.
What's more, TVT research showed that the UK is the main over-the-top (OTT) TV hub for the EU, with 226 OTT platforms, 82 of which carry video-on-demand services targeted at viewers elsewhere in Europe. These OTT exports' far exceed those of the Netherlands, the other significant EU OTT hub with 51 platforms 18 of which are targeted beyond its borders.
What happens with CoO after Brexit will have a major impact on the future of broadcast throughout Europe. While the UK Prime Minister has already made clear that she sees a need to explore creative options in this area of negotiations, what is beyond dispute is that it is critical broadcasters and the ecosystem of service and technology providers supporting them have some idea of where these discussions will lead as soon as possible.
It appears these assurances have not done enough to allay concerns across the industry, particularly now that Discovery, Viacom, 21st Century Fox and Viceland have taken measures to protect their interests by preparing to move elements of their business from the UK. They may not be the last. According to the story in TVB Europe, other content owners with bases in the UK are expected to follow suit, including Disney, the Modern Times Group and Turner Broadcasting.
Whether you're for or against Brexit is at this point immaterial. What we need as an industry soon keeping in mind the clock is ticking on Brexit and March 2019 is the date the separation is due to begin is some clarity how the transition will affect the way broadcasters operate in the UK and the rest of Europe.
Past experience teaches us that any major shift in this business takes at least 18 months, so regardless of the eventual outcome, media and entertainment companies need to devise strategies that prepare them for a post-Brexit world now.
As with every other industry looking at major potential change as a result of the UK leaving the EU, the broadcast sector wants and needs to know how Brexit will impact their future. There are, however, no easy answers. We can only speculate where this is all going.
But broadcasters and content owners with international ambitions still have an opportunity to start preparing for the future of their TV services, particularly in key areas such as versioning, compliance and playout exploring what the possibilities and requirements are and what options exist with respect to services and providers.
Before the Brexit process moves into its closing stages and an end game is established, the challenge will be to find strategic approaches that enable industry players of all types to continue to thrive while planning for a whole range of business scenarios, regardless of what the eventual outcome of Brexit negotiations might look like.
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Ian Brotherston, chief executive, TVT, offers his thoughts
