Brexit & The Media Industry

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Someone asked me yesterday what Brexit would mean for the media industry. It's something I've written and talked about here and there, but the actual consequences now that this eventuality has befallen us demands greater consideration.

First of all, there's the macro economic climate. The pound is weak and tax is being lowered, meaning that investing in the UK becomes cheaper and discourages buying from abroad.

However, from all the discussions I've had, the psychological impact of the divorce from the EU will put off potential partners not just from Europe but around the world. I keep on hearing the phrase 'little Englanders' from all kinds of people dismayed at the outcome of the referendum. It does not bode well.

However, the break up will derail the grand plan to make the EU one market for content, which was set to hit the rights industry very badly. This also has the added benefit of keeping things complicated for the US Big Internet companies trying to take over the media industry. As proposals stood, they could have waved their chequebooks and pretty much bought or wiped out the whole media sector in Europe in the straight-to-streaming (STS) era.

The fact that the UK will not be signing up to TTIP for the near future is also a book to our creative companies and will give them breathing room to try and compete again with US companies. Moreover, already the tax regime seems to be levelling out after the Chancellor's announcement on reducing Corporation Tax.

Pretty much every major UK media company has already been taken over by major US players, and they are likely to be impacted - Liberty Global and Virgin Media had firm plans to build pan-European businesses, ready for the time when sports rights for most of the continent would be sold as a block. They will continue to have to treat the UK, the most lucrative of all markets, as a separate entity, which means that footballers' agents will be dragging on their cigars at the Leave vote.

Meanwhile, the move may well take ITV off the marketplace, since it will prove to be a somewhat less attractive stepping stone to pan European ambitions for the likes of Discovery and even Comcast.

The BBC is also probably in a better place, with its future already recently settled, it would be difficult to see any UK politician daring to undermine our national treasures for the foreseeable future.

The UK has a tradition of heavily subsidising the creative industries, from the promotion of local TV stations to tax breaks on film investment, and with the 'austerity government' coming to an end it's likely that there will need to be further inducements in the future to 'make up' for the effects of losing EU funding, such as it is. The media industry needs to be lobbying heavily as soon as the UK has an effective Government again.

It's difficult to predict what will happen to cross border productions: this is already a mishmash or regional, national and pan European funding. Obviously, in time, the European funding will go away. However, the UK is the stepping stone to the global English language market so it's difficult to see a major impact here, although some producers and distributors dependent on EU sources of funding have been distraught.

Movement of actors and talent will become more problematic, especially for UK talent wanting to film or work overseas. But more important will be that recruiting staff for developing web and mobile will become tougher unless the UK stops churning out graduates who cannot code.

Also, it's worth considering things far more difficult to quantify and predict. The zeitgeist of the media industry is made up of millions of moving parts and they have been thrown into a state of turmoil. There will be a creative backlash without doubt, although it is depressing how un-political the media industry has become. Perhaps that will change on the back of the ill-founded will of the British democratic process.