Brexit: Broadcasting industry’s survival kit
Whether “hard” or “soft”, Brexit (the exit of Great Britain from the European Union) will take place at the end of March this year. While the political and economic risks have been the main focus of this painful process for both parties, the effects on the broadcasting and distribution business have not been widely discussed. Yako Molhov and Ed Hall, Managing Partner of Expert Media Partners, talked about the possible consequences for the TV industry and how the major international players will have to adapt to the new realities.
Ed Hall, Managing Partner of Expert Media Partners
Ed, Expert Media Partners has a broad portfolio of services, i.e. EPG Brokerage, Platform Distribution, Content Acquisitions; etc. What are your main activities and who do you work with?
EMP is a leading specialist broadcasting commercial advisor and management consultancy based in London. We are more entrepreneurial than many similar businesses and we are a seed investor in companies and ideas that we believe we can assist. EMP’s areas of expertise include launching television channels, assisting with licensing and providing compliance services, business planning, financial modelling, platform distribution, and channel management. We work across multiple genres including entertainment and movies, mainstream terrestrial stations, news, music and international channels. We also have a specialist team that works on television shopping. Recent EMP clients include the BBC, ITV, Ofcom, the Irish State Broadcaster RTE, Virgin, Discovery, Viacom, Sony and Turner in the UK, and Epsilon TV in Greece.
Since 2016 EMP has been researching the impact of the Brexit vote on broadcasters in the UK and Europe and we have already conducted and published major research in all EU 27 jurisdictions and the three EEA countries. EMP has also conducted research on the ground or face-to-face with regulators in Ireland, Iceland, Greece, Germany, Luxembourg, Malta, Estonia, Belgium and the Netherlands, and our clients include inward investment authorities as well as channel operators.
Indeed, the hottest topic right now not only on the UK broadcast market but also for many international players is Brexit. Separation from the EU will begin in March 2019. How will Brexit affect the UK and the European TV market as a whole?
It is still unclear what effect Brexit will ultimately have on the UK broadcast market, but there are concerns that broadcasting has not received the attention or prominence it deserves in the transitional deal presented by Theresa May. As the chance of a ‘No Deal’ outcome increases, broadcasters who use UK licenses to broadcast in Europe are looking at options for dual licensing. In some cases, this may mean jobs or functions moving out of the UK. If Ofcom-licensed broadcasters do not make alternate arrangements with an EU/EEA country, then in the event of a no-deal, they risk their channels going black on March 30. Broadcasters need to lobby the government to ensure that as negotiations commence on the long-term deal between the UK and the EU, broadcasting and the creative industries have a strong voice.
What are your main recommendations to EU broadcasters for the post-Brexit future?
My main recommendations would be to prepare early. This means making decisions now, so that and changes required as licensing changes are implemented can be minimized. The better planned Brexit decisions are, the less they are likely to disrupt the UK as a broadcast hub, or the broadcaster themselves as they may be forced to make sudden and dramatic decisions without proper planning.
There are many broadcasters with UK (Ofcom) licenses that broadcast their signal across the EU. What would be the best options for channels currently registered in the UK to move their legal activities back under EU jurisdiction?
The UK is and will remain the most important market for international broadcasters in Europe, so channels are not going to disappear. What is likely to happen is that those European operations will in future have a dual-track approach, as the EU and the UK are likely to be separate markets. That probably means some loss of functions and roles from the UK, but it is unlikely to mean major changes as the UK is the hub for many EMEA operations, and the EU is only part of that.
Do you expect any outflow of broadcasters from the UK in 2019, especially from big international broadcasting corporations and distributors?
We do expect to see a movement of licenses from the UK to the EU/EEA, and this will include large, medium and small broadcasters who currently use an Ofcom license to broadcast into the EU. But it’s important to realize that this doesn’t mean broadcast groups will relocate entirely, but that they move some parts of their operations. This could, for example, mean moving the scheduling team, using a satellite/playout provider in a different EU country, or basing editorial control elsewhere. Much will depend on how the chosen country decides to interpret the COO requirements outlined in the AVMSD, and there is a range of approaches to that, and a market is developing between EU regulators.
How will UK’s split from the EU affect the distribution business of the British companies? Should buyers expect higher prices?
Content and distribution contracts are likely in the future to treat the UK and EU as separate markets, but that is true already for most rights. It is unlikely that the overall value of distribution will change, but for some pan-European rights holders it may become more complex. In the context of a distributor who covers multiple international markets, we don’t see this as a major problem.
Tell us more about your Brexit Broadcast Licensing Directory. What is it and how will it help broadcasters to cope with the Brexit consequences?
The Brexit Broadcast Licensing Directory is a research tool aimed at broadcasters, government officials, regulators, media lawyers, academics and journalists assessing, studying or reporting on the UK television and video industry. It contains information for all broadcasters who may need to re-license post-Brexit. The directory outlines and compares the regulatory environment of each of the 30 EU and EEA countries and details the business considerations as well as what it is like to live should members of staff be required to relocate. The directory also offers hundreds of verified contact details for every regulator in Europe as well as other key contacts in every market.
EMP is a leading specialist broadcasting commercial advisor and management consultancy based in London. We are more entrepreneurial than many similar businesses and we are a seed investor in companies and ideas that we believe we can assist. EMP’s areas of expertise include launching television channels, assisting with licensing and providing compliance services, business planning, financial modelling, platform distribution, and channel management. We work across multiple genres including entertainment and movies, mainstream terrestrial stations, news, music and international channels. We also have a specialist team that works on television shopping. Recent EMP clients include the BBC, ITV, Ofcom, the Irish State Broadcaster RTE, Virgin, Discovery, Viacom, Sony and Turner in the UK, and Epsilon TV in Greece.
Since 2016 EMP has been researching the impact of the Brexit vote on broadcasters in the UK and Europe and we have already conducted and published major research in all EU 27 jurisdictions and the three EEA countries. EMP has also conducted research on the ground or face-to-face with regulators in Ireland, Iceland, Greece, Germany, Luxembourg, Malta, Estonia, Belgium and the Netherlands, and our clients include inward investment authorities as well as channel operators.
Indeed, the hottest topic right now not only on the UK broadcast market but also for many international players is Brexit. Separation from the EU will begin in March 2019. How will Brexit affect the UK and the European TV market as a whole?
It is still unclear what effect Brexit will ultimately have on the UK broadcast market, but there are concerns that broadcasting has not received the attention or prominence it deserves in the transitional deal presented by Theresa May. As the chance of a ‘No Deal’ outcome increases, broadcasters who use UK licenses to broadcast in Europe are looking at options for dual licensing. In some cases, this may mean jobs or functions moving out of the UK. If Ofcom-licensed broadcasters do not make alternate arrangements with an EU/EEA country, then in the event of a no-deal, they risk their channels going black on March 30. Broadcasters need to lobby the government to ensure that as negotiations commence on the long-term deal between the UK and the EU, broadcasting and the creative industries have a strong voice.
What are your main recommendations to EU broadcasters for the post-Brexit future?
My main recommendations would be to prepare early. This means making decisions now, so that and changes required as licensing changes are implemented can be minimized. The better planned Brexit decisions are, the less they are likely to disrupt the UK as a broadcast hub, or the broadcaster themselves as they may be forced to make sudden and dramatic decisions without proper planning.
There are many broadcasters with UK (Ofcom) licenses that broadcast their signal across the EU. What would be the best options for channels currently registered in the UK to move their legal activities back under EU jurisdiction?
The UK is and will remain the most important market for international broadcasters in Europe, so channels are not going to disappear. What is likely to happen is that those European operations will in future have a dual-track approach, as the EU and the UK are likely to be separate markets. That probably means some loss of functions and roles from the UK, but it is unlikely to mean major changes as the UK is the hub for many EMEA operations, and the EU is only part of that.
Do you expect any outflow of broadcasters from the UK in 2019, especially from big international broadcasting corporations and distributors?
We do expect to see a movement of licenses from the UK to the EU/EEA, and this will include large, medium and small broadcasters who currently use an Ofcom license to broadcast into the EU. But it’s important to realize that this doesn’t mean broadcast groups will relocate entirely, but that they move some parts of their operations. This could, for example, mean moving the scheduling team, using a satellite/playout provider in a different EU country, or basing editorial control elsewhere. Much will depend on how the chosen country decides to interpret the COO requirements outlined in the AVMSD, and there is a range of approaches to that, and a market is developing between EU regulators.
How will UK’s split from the EU affect the distribution business of the British companies? Should buyers expect higher prices?
Content and distribution contracts are likely in the future to treat the UK and EU as separate markets, but that is true already for most rights. It is unlikely that the overall value of distribution will change, but for some pan-European rights holders it may become more complex. In the context of a distributor who covers multiple international markets, we don’t see this as a major problem.
Tell us more about your Brexit Broadcast Licensing Directory. What is it and how will it help broadcasters to cope with the Brexit consequences?
The Brexit Broadcast Licensing Directory is a research tool aimed at broadcasters, government officials, regulators, media lawyers, academics and journalists assessing, studying or reporting on the UK television and video industry. It contains information for all broadcasters who may need to re-license post-Brexit. The directory outlines and compares the regulatory environment of each of the 30 EU and EEA countries and details the business considerations as well as what it is like to live should members of staff be required to relocate. The directory also offers hundreds of verified contact details for every regulator in Europe as well as other key contacts in every market.
