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The potential impact of Brexit on the UK's broadcasting industry

View profile for Paul Herbert
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This article was first published on Lexis®PSL TMT on 26 September 2018. Click for a free trial of Lexis®PSL.

How has membership of the EU benefited the industry?

First and most obvious is freedom of movement. This has been hugely beneficial for the UK, since its status as a leading international creative hub means that the UK is able to attract and retain the best talent from around the world—particularly from the EU. It is estimated that between 10–20% of the UK’s audio-visual workforce is comprised of EU nationals—in London, the percentage is much higher.

The Digital Single Market is another factor, particularly in relation to copyright. There have been several measures over the years intended to harmonise EU copyright law. Most recently was the proposal to extend the single country clearance arrangements that we already have for cable and satellite services to the online world.

By far the most important of all of these is the Audio-Visual Media Services Directive, 2010/13/EU (AVMSD). This was originally enacted in 1989 as the Television Without Frontiers’ Directive, 1989/552/EEC. Among other innovations, it introduced various quotas, such as the requirement that 50% of the content in UK broadcast services has to be of European origin. A further 10% must comprise independent productions (gold plated in the UK to 25%). The AVMSD also addresses the protection of minors, the regulation of advertising content, sponsorship and the protection of certain sporting and cultural events as listed events.

And by far the most important provision in the AVMSD has been the country of origin principle. This is the rule that enables freedom of movement for broadcast services. Therefore, broadcast services under the jurisdiction of one Member State which are receivable across the EU are only required to be licensed in the originating state and to comply with the laws and regulations of that state. The UK has done very well out of this principle. There are currently in the region of 2,200 licensed broadcast services across the whole EU, half of these—1,100—are licensed by Ofcom here in the UK and, according to Ofcom, half of those—650 or so—are international broadcast services, broadcasted from the UK into the rest of Europe (and often beyond). This has enabled the UK to become a leading hub for international broadcasting. The country of origin principle also now applies in the online world so that video on demand services can benefit.

How will Brexit affect talent and funding?

Clearly the key concern in relation to talent is whether or not the large percentage of EU nationals who currently live and work in the UK in our broadcasting and production sectors will be able to stay and, if so, on what terms and within what parameters? Free movement of cast and crew may be in jeopardy if visas, permits or carnets are required.

There is also the risk of loss of funding—the EU’s Media/Creative Europe Scheme provided over €100m in grants to the film and television industries between 2007 and 2013. It remains to be seen whether the UK government would apply the savings in contributions to the EU budget to create subsidies in this area. Ironically, one upside of Brexit is that it would no longer be constrained from doing so as the UK would (probably) not be subject to EU State Aid rules.

Where should broadcasters be thinking about re-locating?

As the Chequers White Paper itself acknowledges:

‘The UK is leaving the Single Market—as a result the "country of origin" principle…will no longer apply.’

Optimistically it added:

‘The UK is seeking the best possible arrangements for this sector.’

But the outlook is uncertain and broadcasters, like all other businesses, dislike uncertainty. A number of them are therefore actively considering whether and if so when and where to relocate.

An obvious destination is another English-speaking country. This places Ireland top of a non-existent list and it is assiduously marketing itself as a destination for emigrant broadcasters. It boasts a flourishing creative sector with a wide talent pool, and an analogous legal and regulatory environment—not to mention significantly lower corporation tax rates and a geographical bridgehead to the US.

Obviously, this not a decision to be taken lightly. De-coupling from existing and often long term contractual and operational arrangements, is not exactly straightforward, nor is seeking to replicate those with new providers in a foreign jurisdiction.

Will UK programming still be treated as EU content?

Yes, as confirmed in the EU’s ‘Notice to Stakeholders’ works originating in the UK will continue to be classed as European Works by virtue of the fact that the UK is a signatory to the European Convention on Transfrontier Television of the Council of Europe 1989.

How might UK broadcasters get EU access in the event of a hard Brexit?

It will remain theoretically (and technically) possible for broadcasters based in the UK to continue to broadcast their services throughout the EU. However, they would need to ensure that their services were licensed in each of the Member States in which they are received, and correspondingly that their programmes complied with local laws and regulations. In many cases those differ from Member State to Member State, so in practice this would be nigh on impossible to construct. There would have to be some saving mechanism, such as mutual recognition, something hinted at by Prime Minister May in her Mansion House speech in March 2018.

What about the Satellite and Cable Directive 1993?

The Satellite and Cable Directive 1993, 93/83/EEC provides for a mechanism for copyright clearance analogous to the country of origin principle. It provides that pan-European satellite broadcasters which simulcast terrestrial services are not usually required to obtain pre-copyright clearances in all Member States in which the programmes are received. Cable operators which retransmit terrestrial services enjoy compulsory licences in return for payments to collecting societies. Under the Great Repeal Bill this directive would be preserved into UK law but its future applicability (and relevance) would be determined according to the bigger picture in the UK–EU broadcasting and copyright canvas.

The government has issued a series of technical notices setting out information to allow businesses and citizens to understand what they would need to do in a ‘no deal’ scenario, so they can make informed plans.

This guide is for general information and interest only and should not be relied upon as providing specific legal advice. If you require any further information about the issues raised in this article please contact the author or call 0207 404 0606 and ask to speak to your usual Goodman Derrick contact.