UK-based broadcasters will face very serious challenges once the UK departs the European Union, according to a new research study from London-based media management consultancy, Expert Media Partners (EMP). It adds that the impact of Brexit will start to be felt by broadcasters as early as this summer.
EMP found that the UK is "by far the biggest location" from which television channels are broadcast to other EU countries, but the decision by the UK to leave the EU will likely force many of these broadcasters to relocate. At the heart of this is the EU's Country of Origin (COO) principle, a part of the EU's Audio-Visual Media Services Directive (AVMSD). This essentially defines the EU as a common area for broadcasters, so that broadcast services from one EU country that are received in another are not treated as coming from outside that country by national regulators. However, in EMP's research, most experts agreed that Brexit will likely put the UK outside the AVSM directive and licensing regime. This will force broadcasters to relocate to other EU states in order to continue distributing their content across the EU.
EMP's research has identified countries that are already courting broadcasters in the UK, to encourage them to move, and satisfy the COO requirement post-Brexit.
There has been extensive discussion regarding the move of banking and financial services from London, due to passport issues and the EU's insistence to relocate Euro settlement within the EU. We've also looked at Brexit's impact on the UK's data center industry given data residency requirements. But EMP's analysis suggests that this will also affect the broadcast and cable industry, with channels moving en masse to the continent.
"Whilst it isn't usual to think of television channels as a commodity which countries export, in the case of the UK, exporting television channels is a very substantial business," the consultancy says in its blog. "A large part of the business activity that this industry supports is currently pan-European."
EMP's analysis did not extend to further implications of this move, but as with any large industrial hub, the UK has a certain economic gravity. The presence of broadcasters attracts professionals in the industry, and their presence draws further investment, because investors know that the UK has the talent to support their businesses. For example, many startups and new initiatives in digital media and streaming services are founded and staffed by former broadcast industry executives. A wholesale shift away from the UK will hurt not only TV channels but could also slow new media technology development and streaming video services by shifting talent and investment out of the country. It may even affect advertising and media agencies, many of which are headquartered in London.
As the report points out, today the UK has "a large domestic broadcasting market, a stable and well-respected regulatory regime, good access to highly-skilled workers, availability of excellent post-production facilities and a range of satellite uplinks and technical transmission providers."
But how much of this will remain once the dust clears over Brexit?
— Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation