British Home Entertainment Trade Group: 'Brexit' Impact Unknown29 Jun, 2016 By: Erik Gruenwedel
Following the “Brexit” vote last week mandating the United Kingdom’s pending departure from the European Union after 43 years, the British Association for Screen Entertainment said the economic impact on Britain’s home entertainment market remains to be seen.
The U.K. home entertainment market is the third-largest in the world.
With global markets losing billions in capitalization following the vote, the British pound dropped more than 10% in value.
“At this stage we have no further comment following our statement on [June 24],” BASE spokesperson Andrea Ayre said in a June 28 email.
In that statement, the group said it would monitor further announcements and developments “very closely” regarding fiscal impacts to Britain's home entertainment market.
Within the E.U., the U.K., along with 27 other member countries, was able to engage in business agreements more easily due to the removal of trade barriers, greater efficiency, and elimination of anti-competitive practices such as monopolies and cartels.
While the U.K.’s 25% tax incentive for movie and TV productions reportedly will continue, movie and TV show productions often involve multinational funding that now must deal with new challenges, according to Michael Ryan, chairman of the Independent Film and Television Alliance.
“The decision to exit the European Union is a major blow to the U.K. film and TV industry,” Ryan said in a statement following the referendum vote. “Producing films and television programs is a very expensive and very risky business and certainty about the rules affecting the business is a must.”
Indeed, Lionsgate recently announced the formation of GlobalGate Entertainment, an international consortium funding and producing local-language content distributed globally.
British-based subsidiaries Lionsgate UK and Universal Pictures UK not only distribute physical and digital movies and TV shows, they actively spearhead international productions. A representative from Lionsgate was not immediately available for comment.
Observers say the devalued British pound could make U.K. productions cheaper, while at the same time generating lower revenue from the sale of packaged media, theatrical tickets and related merchandise for corporate parents in the United States.
Regardless, BASE said it could weather industry uncertainty going forward.
“BASE will provide a steady pair of hands and ongoing support to all of its members in the transition and offer stability as the U.K. withdraws its membership of the E.U.”
Separately, Universal Pictures UK, Warner Bros. Home Entertainment Group and Studiocanal walked away with multiple awards at the 2016 BASE Awards, held June 10 in London. Awards were also won by Signature Entertainment, Lionsgate UK, Amazon, Sky Store, Tesco UK and Wilderness.
"The [home entertainment] category continues to create new and exciting campaigns to reach audiences in ways they haven’t before, not forgetting the innovative ways that retailers both physically and digitally are consistently evolving to meet the insatiable appetite U.K. audiences have for high-quality video content. It’s important that we continue to acknowledge all those dedicated to making the video industry the great success that it is," BASE CEO Liz Bales said in a statement.