The UK’s creative industries, which include films, music, television, video games and publishing, among other sectors, account for some of the most recognisable products exported by the country around the world. But how does EU membership affect these industries and what would the picture look like following a Brexit? Sally Broughton Micova writes that EU membership provides a number of benefits to creative industries which could disappear if the UK votes to leave on 23 June

Broughton Micova, Sally

LSE Research Online

Creative industries and the EU: “There are clear winners in this not-so levelplaying ﬁeld, and the UK is deﬁnitely one of them”. Free image / Pixabay.6/16/2016Why the UK’s creative industries are better oﬀ in the EUblogs.lse.ac.uk/europpblog/2016/06/16/uk-creative-industries-better-oﬀ-in-the-eu/The UK’s creative industries, which include ﬁlms, music, television, video games and publishing,among other sectors, account for some of the most recognisable products exported by the countryaround the world. But how does EU membership aﬀect these industries and what would the picturelook like following a Brexit? Sally Broughton Micova writes that EU membership provides anumber of beneﬁts to creative industries which could disappear if the UK votes to leave on 23 June.There are at least two main reasons why the UK’s creative industries are better oﬀ within the EU.First, the UK is a leader in and beneﬁts greatly from being part of the EU’s single market for creativeindustry services. Second, UK companies and citizens are better protected in the global marketplace by being withinthe EU, as EU membership provides the means to collectively deal with competition from powerful globalcorporations.The UK’s creative industries within the digital single marketThe move towards a single market for audiovisual media production and distribution within the EU began in 1989,with the UK playing a key role in this move. It is currently governed primarily by the Audiovisual Media ServicesDirective (AVMSD) and, of course, EU competition rules. The aim of this directive, which is under revision, is toestablish minimum standards and a “level playing ﬁeld” for a common audiovisual production and distributionmarket. The basic idea is to encourage growth by creating economies of scale within the wider European marketand encouraging cross-border co-operation.It would be diﬃcult to argue that a level playing ﬁeld has been achieved. Broadcasters or producers whose homemarket for audience and advertising are the 1 million Estonian speakers or 2 million Slovenians are inherently notcompeting on the same level as the UK’s ITV or Germany’s RTL within the European market. There are clearwinners in this not-so level playing ﬁeld, and the UK is deﬁnitely one of them. This is one of the reasons, as AlisonHarcourt found, that UK industry stakeholders are particularly concerned about the future shape of this EU market.The UK serves as the “country of origin” for over1,000 cable and satellite channels broadcast in therest of Europe. The UK is home to the Europeanoperations of several of the large global brands suchas Discovery, Fox, and Disney, and to many otherservices, such as the British children’s channels thathave large Nordic audiences or the ones for Europe’snumerous linguistic minorities. The principle ofregulation only in the country of origin has been thekeystone of the AVMSD, and allows such services tobe based in the UK, even though their intended publicand market might be elsewhere in Europe. Thesechannels are regulated by the UK’s Ofcom and tovarying degrees contribute to the UK economy.The UK’s production sector has been one of the bigwinners within the EU, which is probably why 85% ofthe members of PACT, the sector’s trade association,1/3support remaining in the EU. Aside from the beneﬁts of serving television and other distribution channels within awider market, the UK’s producers are among the top beneﬁciaries of EU programmes aimed at boosting the sector.The EU has provided subsidies for ﬁlm and other audiovisual production and distribution for over a decade in orderto boost the international competitiveness of European production. Just in the ﬁrst two years of the current CreativeEurope programme, UK producers and cinema distribution companies and organisations received €40 million.According to DCMS data, the UK’s exports to Europe from the “ﬁlm, TV, video, radio and photography” sector in2013 were worth over £2.2 billion. That is £1 billion more than those to America, and the second largest contributionto the total exports from the UK creative industries (software and IT being one of the other sectors). The UK’stelevision broadcasters have been experiencing steady growth in revenues since 2009, but Ofcom’s 2015 marketreport show these have been levelling out a bit since 2013.Though the evidence indicates that the UK is healthy and certainly leading within Europe, there are massivechanges afoot. But the new forms of competition and the challenges these bring are also better dealt withcollectively within the EU.Facing the global (American) internet giantsTraditional linear broadcasting and cinema distribution now compete with various video-on-demand (VoD) and onlinestreaming services for audiences and with a host of online services for sponsorship and advertising. Users of onlineservices are also creating massive amounts of audiovisual content themselves and “broadcasting” their work online,sometimes generating signiﬁcant revenues. In Ofcom’s latest research on media use and attitudes, 32% ofrespondents cited YouTube as an important source of information… And then there is the “Netﬂix problem”.The European audiovisual observatory’s recent report shows a rapid increase in take up subscription of video-on-demand services since 2012 in the EU. Almost half of consumer revenue from these subscriptions is generated inthe UK, where more than 70% of the market is held by Netﬂix. The observatory’s authors conclude that Netﬂix is stilla complementary service, but whereas linear television viewing remains surprisingly stable across the rest ofEurope, in the UK, where video-on-demand is strongest, it has decreased since 2011 by 22 minutes per day.There are real concerns that the legacy players of Europe’s audiovisual industries are at risk from this competition,and that those that have been the engines of audiovisual content production will not be able to maintain the levelnecessary to serve the needs of its citizens or compete globally. The European Commission’s proposal for revisionsto the AVMSD released on 25 May, would have video-on-demand providers such as Netﬂix and Amazon required tocomply with the same rules for inclusion and investment in European original content that traditional media have tofollow. If outside of the EU’s rules, Netﬂix’s powerful UK operations would not face such obligations.National level authorities have appeared rather weak when it comes to dealing with large global media companies.The UK’s competition authority waived through Amazon’s takeover of the UK’s Loveﬁlm in 2008, so instead ofdeveloping along the lines of US-based Netﬂix into a competitor in the video-on-demand market, it was dissolvedinto Amazon’s numerous services within a few years. It is the EU’s Competition Directorate that is going afterGoogle for its domination of advertising markets, a crucial issue for UK media and other creative industries thatdepend on advertising.Though this saga is still playing out, if the tax evasion issue is anything to go by, there is reason to believe that theEU will be more eﬀective at combatting the unfair practices of the large global companies that aﬀect the UK creativeindustries. The UK government’s deal over taxes with Google was considered egregious by many, but the EU’scompetition authority has recently gone after the special tax arrangements enjoyed by Apple in Ireland and Amazonvia Luxemburg as unfair competition.Stronger within a European digital, creative market2/3The value of the creative and communication industries cannot be measured solely by calculating their contributionto GDP or export revenues because these industries also provide space for expression and debate, and forcreativity and innovation to thrive. Ensuring that UK production thrives is not just about the jobs in that sector, butabout allowing British culture and values to continue to be represented and negotiated.If the domination of global giants like Google, Apple and Amazon is not held in check, how will there be space or forthe media upon which society relies for information and expression to continue to sustain itself, or perhaps for theUK’s creative talent to break into the marketplace with the next innovation? National governments will always behindered by the need to do a deal with large global corporations for short-term gains in jobs or prestige – aheadquarters here or there. Alone they also lack the capacity to ﬁnd policy solutions for the new environment inwhich the creative industries are situated. Within the EU, this is already being done.Please read our comments policy before commenting .Note: This article gives the views of the author, and not the position of EUROPP – European Politics and Policy, norof the London School of Economics.Shortened URL for this post: http://bit.ly/1UaxUeR _________________________________About the authorSally Broughton Micova – University of East AngliaSally Broughton Micova is a Lecturer in Communications, Policy and Politics at the University ofEast Anglia. 3/3

Why the UK’s creative industries are better off in the EU

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