Report: Up to £1 billion from international broadcasters at risk

February 2018

Losing access to EU markets could jeopardise up to £1 billion in annual investment from international broadcasters, a new report published by COBA reveals.

International broadcasters invested a record £1.02 billion in the UK last year, up more than 50% on 2011 – but this investment is at risk unless the Government secures access to EU markets once the UK leaves the EU.

International broadcasters invested £1.02 billion in the UK last year, an increase of more than 50% on the comparable figure (£679m) in 2011, according to new independent research commissioned by the Commercial Broadcasters Association. The research shows:

  • The importance of the UK’s status as Europe’s leading international broadcasting hub
  • The strong potential for growth in jobs and investment driven by international channels
  • The potential damage to the UK television sector if access is not secured to EU markets for international broadcasters based in the UK.

The research was commissioned by the Commercial Broadcasters Association, the industry body for multichannel broadcasters, from leading media analysis firm Oliver & Ohlbaum Associates. It looked at investment by channels that are based in the UK but broadcast overseas. It excluded spend on their UK businesses, looking purely at their investment on non-domestic channels that are broadcast from here to other countries. The UK is Europe’s leading international broadcasting hub, home to 761 Ofcom-licensed channels and content services that broadcast from here to overseas audiences (predominantly to the EU).

The report found that international broadcasters invested £1.02 billion in 2017 in such areas as content investment, production facilities, wage costs, overheads and technology – making a major contribution to the critical mass and global competitiveness of the UK television sector.

This investment has increased by more than 50% on 2011’s figure of £679m. This growth highlights the increasingly global nature of the television sector, demonstrating how important fast-growing international channels are to the future growth of the UK as a leading global broadcasting centre.

However, this status as a global broadcasting centre is at risk if the UK cannot secure access to EU markets for international channels based here once it leaves the EU. Under current EU rules, any Member State must recognise a broadcast licence granted to a broadcaster by another Member State. Once the UK leaves the EU, in the absence of alternative arrangements, international broadcasters will be forced to restructure their European operations in order to qualify for a broadcast licence from a country within the EU.

Adam Minns, COBA’s Executive Director, said:

“The UK is Europe’s number one broadcasting hub for good reason and no one wants to restructure their business. But if a UK broadcasting licence is no longer recognised by the EU, international channels will have no choice. This report shows the immense value they have for the UK, and the huge potential for future growth – if we can get this right.

“We also call on both the UK and the EU to provide clarity on transitional arrangements quickly, to provide security for businesses and their employees in both the UK and the EU. Broadcasters cannot wait until the cliff edge in March 2019 before making these decisions, they need to plan any restructuring well in advance.”

 

For further information please contact: Adam Minns, COBA Executive Director, adam@coba.org.uk or (020) 3327 4101

COBA is the industry body for multichannel broadcasters. COBA members operate a wide variety of channels, including news, factual, children’s, music, arts, entertainment, sports and comedy. Their content is available on free-to-air and pay-TV platforms, as well as on-demand.

Oliver & Ohlbaum (O&O) is one of Europe’s leading independent policy and strategy advisors to the media and entertainment industry, where it has unrivalled knowledge and expertise.

Background notes

* The UK is Europe’s leading international hub for global media groups, home to more television channels than any other EU country. Around 1,400 channels are based here, representing more than a third of all EU broadcasters. More than half (761) of the channels licensed in the UK actually broadcast to overseas countries, not to the UK.

* These channels employ thousands of people in the UK – more than 1 in 5 jobs in the UK broadcasting sector are related, wholly or in part, to international channels. They invest hundreds of millions of pounds a year in wages, overheads and the technology required to get channels on air, helping ensure the UK broadcasting sector has the critical mass to compete on the global stage.

* The number of non-domestic channels based in the UK is growing significantly more quickly than domestic ones (17% a year for international channels vs 11% for UK channels).

* Total EU broadcasting revenues (advertising and subscription) are worth £56 billion a year, representing around 22% of the global market of £244 billion.

* Non-domestic television channels broadcast to EU markets in a way similar to passporting in the financial services sector: the UK regulator Ofcom grants a broadcasting licence which, under EU law, must be recognised by any other EU Member State. Were the UK to leave the EU, this recognition would no longer be granted – at least on a comparable basis – without securing access through an alternative arrangements.

* Broadcasters could not simply take a licence in another country without restructuring their European businesses in order to obtain a licence to broadcast from a remaining EU country.

* This would lead to a direct loss of investment from international broadcasters based here. It would also have a negative impact on related sectors in the broadcast supply chain.

ENDS