C21 feature: Breaking away
Brexit struck TV-land like a bolt from the blue but the UK industry has since developed a clearer idea of what it wants from the negotiations – and a strategy to get it. Richard Middleton reports.
When the Brexit bell finally tolled last June after months of divisive campaigning in the UK it caused consternation for much of the business world, television included.
Suddenly the status quo in the UK’s TV industry was thrown into disarray. How could European executives and talent be smuggled in once the borders closed? Would your international investor pull its funding and leave your passion project high and dry? And what the hell had happened to that carefully chosen media stock portfolio you’d put together?
Fast-forward a year and a bit, and things are looking a tad rosier. The TV industry is still commissioning, producing and broadcasting, but clouds remain on the horizon.
Article 50, the part of European law that starts the mechanism of exiting the EU, was invoked in May and while legislative details are only now beginning to be thrashed out, there’s a great deal more clarity over just what the industry wants, if not much idea of when changes might occur.
“I wouldn’t be presumptious enough to say I know anything about the timeline, and anyone who does is talking through a hole in their proverbial,” says John McVay, CEO at UK trade body Pact, clearing up any confusion over just when things might take place.
McVay, who was drafted in by the UK’s Creative Industries Council to identify issues and opportunities following the referendum, also admits that he’s “not necessarily positive, I’m just realistic that sitting around moaning isn’t going to do anything to help anyone.”
This stance reflects not just swathes of the UK industry but – perhaps even more importantly – those of its European neighbours.
“We’ve continued to do deals with France Télévisions, Germany’s ZDF and a number of others across Europe, in terms of coproductions, presales and distribution,” says Ben Barrett, co-founder at UK-based financing and distribution outfit Drive.
“The one thing that has been made very clear to us by clients is that they want to maintain the relationships we already have; they don’t want Brexit to impact on that in any way, other than the regulatory or framework changes that might be introduced.”
McVay says his main interest has been “to maintain relations with government and lead officials” to ensure they understand the issues affecting TV and the wider creative industries sector. Top of the wishlist is freedom of movement.
“Government is well aware of this and anyone – not just from our industry but from any sector – will get the message that access to highly skilled or appropriate labour for the UK economy is a big issue,” says McVay. “Whether you’re a strawberry farmer or a US studio based at Pinewood, they need access to different talent and skills, and the ability to get this easily and at low cost is a big issue.”
It’s a point that Martyn Whistler, lead analyst for media and entertainment at Ernst & Young in the UK, agrees with. He says the UK government needs to up its efforts and argues that failing to support the industry now could cost dearly in the long term.
“Over time, decisions around Brexit will be made and the extent of change will become clearer,” he explains. “In the meantime, it’s not enough to point to tax incentives as the solution. The answer needs to be more comprehensive – there needs to be support for trade, to open up new markets, there needs to be more continued support around relevant training.
“At the same time, the government needs to create the right conditions for companies to stay in the UK and continue to invest,” he says, adding that “any support around rules on movement would be very helpful in this regard.”
There’s also the question of EU funding, the future of which remains unclear. Just prior to the Brexit vote, Barrett’s outfit Drive used Creative Europe money to part-finance Blink Films’ Volatile Earth, produced for PBS Nova in the US, the UK’s Channel 4 and EU broadcasters such as Discovery in Italy and RMC France.
He admits to hearing whispers that UK proposals might not be looked on as favourably since the referendum but adds that he’s seen no evidence of this and would use this funding route again.
Indeed, Agnieszka Moody, director of Creative Europe Desk UK, is encouraging UK companies to apply for its funding. Creative Europe has supported numerous international dramas ranging from Franco-Norwegian thriller Occupied and Canal+ show Les Revenants, to Swedish thriller Midnight Sun and German period drama Babylon Berlin, and funding is still available in the UK.
Development and production pots – €17.5m (US$20m) and €12m a year respectively – for international dramas, documentaries and animations are available, providing up to €1m per grant. Channel 4’s animated show We’re Going on a Bear Hunt was one project to receive funding, while Magic Light Animation secured cash for Revolting Rhymes, which airs on the BBC. Elsewhere, Brakeless took funding for its doc Tokyo Girls, which aired on BBC4, and Warp Films used EU cash to finance its drama The Last Panthers, produced for Sky and Canal+.
And only this month, foreign-language drama platform Walter Presents secured a grant of more than €450,000 (US$550,000) that will be used to promote European drama in both the UK and the US.
“There’s no bias against applications from the UK, as shown by recent results of development slate and TV programming funding schemes,” Moody adds. She points out that recipients of development funding since the Brexit vote have included Aardman Animations, Lupus Films and Spring Films, while production grants have gone to Brook Lapping for its show Expedition New Earth and Mara Media’s Wild Way of the Vikings.
Indeed, the UK could yet remain an active participant within Creative Europe, depending on negotiations, and Moody expects producers to be able to submit projects at least until the deadlines at the end of 2018, and maybe beyond that, depending on the progress of negotiations. The British Film Institute is also leading a screen sector task force to identify impacts and opportunities and to provide feedback to government, but there are clear concerns that support must remain in one form or another.
At clearest risk are the smaller, start-up indies that lack corporate backing. Moody agrees, adding that the “fragile, independent” part of the sector “that has no corporate or other links to non-European powerful players” is being most affected by the lack of clarity over Brexit, yet is most in need of suitable funding routes to grow.
Distributors selling UK shows also face potential upheaval and a curtailed market, with the situation still hazy over whether UK programming will continue to count towards European broadcasters’ EU programming quotas.
Whistler also highlights that a decision will have to be made over whether channel operators based in the UK can still broadcast into mainland Europe. “That’s the level of detail that we haven’t yet reached in Brexit negotiations. It will happen but the sooner the better.”
He also urges producers to extend their tentacles far and wide into new markets, but is bullish about opportunities within Europe too. “We’re certainly seeing more demand, especially from Asian markets. It’s now up to UK producers to take advantage. But don’t ignore the opportunities in Europe. Given where the pound currently sits, it’s attractive for European media companies to buy UK content.”
It’s a similar story from McVay, who says Pact has upped the ante, to an extent. In July, it appointed four industry stalwarts to act as ‘Export Ambassadors’ as part of a plan to help shape its export strategy and identify global trends and key markets.
Denman Rooke, executive chairman at October Films and one of Pact’s ambassadors, has seen his company’s turnover bolstered by exports, to the extent that 75% of its revenue now comes from outside of the UK. Reflecting Whistler’s comments about Asia, Rooke attended the Shanghai TV Festival with Pact in June – a signal of intent, perhaps, to ignite and strengthen partnerships.
“We are seen worldwide as innovative and imaginative producers,” he says. “This is a great time to be selling ourselves on the international stage, and I am looking forward to my role in helping Pact facilitate these opportunities.”
Yet as McVay points out, this is not a kneejerk reaction to Brexit but rather building on a pre-existing, long-standing attempt to crack more parts of the world.
“We’ve been active in all the global markets for a long time now, but we’ve stepped up a few more activities to make sure we maintain good coproduction and financing relationships with our European friends.” He also highlights that, despite the furrowed brows of 2016, the US remains the UK’s biggest market for TV, not Europe.
There are, of course, wider macroeconomic concerns circling the industry too, not least dampened demand for advertising, but Whistler says such fears should be partially allayed by the fact that premium, unique content will be needed to differentiate operators should revenues stall.
So the sky over the UK hasn’t yet fallen in and, at the time of writing, there is even the prospect of sunshine. European execs can still hop on the Eurostar to discuss their latest big-budget drama coproduction, international investors have not scurried out of the UK with their money under their arms and most share prices have rebounded. There are reasons to be cheerful after all.
Published 30-08-2017 by Richard Middleton on www.c21media.net