The Brexit Dance – Good for Entertainment?

14th June 2019

The following speech below entitled ‘The Brexit Dance – Good for Entertainment?’ was delivered by Gordon Williams at the MIDEM/IAEL UK Legal Update on 5 June 2019:

Good morning everyone.

Regular attendees will know that I do this UK legal update quite often.  For the last 3 years, Susan and Peter have been asking me to say something about Brexit and I have declined on the basis that it would just be speculation, but when I put myself up for speaking this year in January, I of course agreed as by June it would all be sorted and everyone could all know where they stood.  How wrong I was.  But it could be worse – before our Prime Minister resigned, I was due for a sleepless night last night trying to interpret for you the latest indicative voting in the UK Parliament which had been scheduled for yesterday evening.

So is the Brexit Dance good for entertainment?  I’m sure that you will all have spotted the deliberate double meaning there.

Perhaps not entertained, but no doubt you have all been impressed by the highly efficient workings of one of the oldest democracies in the world in dealing with the Brexit issue.  For any of you that may be finding it all a bit confusing, then let me see if I can help as I think the simplest way to explain it is as follows:-

You’ve got your left wing in.  Your right wing out. In. Out. Shake it all about.  You do the hokey cokey and you turn around.  That’s what it’s all about.

As I hope many of you know, that’s a very popular British participation dance.  But it’s not some isolationist British thing.  My research reliably informs me that it’s well known in other English speaking countries, including America and Australia where it’s called The Hokey Pokey, and in Denmark where it’s known as The Bugi-Wugi song.   For other nationalities, if you think of The Birdy Song or The Chicken Song, then you’ll get the idea. 

Okay, I know it’s wrong to joke about such a serious issue, but for a Remainer such as myself, it’s all so depressing that you’ll just have to forgive me for using humour as a coping mechanism.

So, turning to the other meaning of my title, is what’s going on good for the entertainment industry, and for the music industry in particular?

Well, the current uncertainty doesn’t yet appear to have had an adverse impact on the British music industry.  Consumption of music in the UK continues to grow apace, up 5.7% in 2018 making an overall growth of 22% since the darker days of 2014, with streaming up 34% year on year and now accounting for almost two thirds of all music consumption.  Half of the top twenty selling artist albums were UK acts with George Ezra leading the way.  A sign of the continuing convergence of the entertainment industries was the success of various music film soundtracks, including Bohemian Rhapsody, Mamma Mia Here We Go Again, and the highest selling album of the year The Greatest Showman. 

But what does the future hold?  We’ve had the draft Withdrawal Agreement and the plan was for a 21 month transition period during which EU law would continue to apply in the UK while the future relationship between the EU and the UK is hammered out.  But the UK Parliament has rejected the draft Withdrawal Agreement, and the increasing risk is that the UK could crash out of the EU on 31st October without a deal, and EU law would then immediately cease to apply directly in the UK save to the extent it’s already incorporated into UK national law.

So what is likely to happen to the laws that are most relevant to the entertainment industry, particularly IP rights? 

On Copyright, that is already governed by national law so it will be largely no change.  The new EU Copyright Directive which was passed in April only has to be implemented into national law by the 7th of June 2021 which may or may not be after any transition period, but the UK has supported the Copyright Directive including Article 13 and the likelihood is that it will be adopted into UK national law in any event including if there is no deal. 

On trade marks, there is of course separate EU law on the EU trade mark.  Under the draft Withdrawal Agreement, owners of EU trade mark registrations were automatically to become owners of a comparable UK registration before the end of the transition period, free of charge, without needing to make a separate application.  Applications for EU trade marks that remain pending at the end of the transition period would give rise to a 9 month priority period during which equivalent applications could be made in the UK with the same filing and priority dates. The same applies to international trade marks with an EU designation.  If there is a deal, these trade mark provisions are likely to remain unchanged.  If there is no deal, in theory EU trade marks will cease to apply immediately in the UK, but the UK Government has made it very clear that they intend to replicate the EU trade mark with an equivalent UK national mark from the date of departure.  Best advice remains however that new applications should be made in the UK as well as the EU if cover in the UK is required.

Moving on to contract, the basic principles of contract law are governed by national law so there will be no change there.

As regards free movement of people and movement of goods, the general uncertainty doesn’t seem to be a particular concern for the music industry, but managers are being advised to leave free days in touring schedules for travel between the UK and EU in case of any hold ups.  Such delays and any future Customs tariffs are likely to be reflected in higher ticket prices in time.

It is in relation to the application of EU Directives that the effect of no deal is likely to be most noticeable.  In particular EU Collective Management Organisations will no longer be subject to the obligation to represent UK Collective Management Organisations for multi-territorial licensing in accordance with the Collective Rights Management Directive, though the UK has said it will continue the obligation on UK Collective Management Organisations and the expectation is that existing reciprocal arrangements will be maintained.

Also, UK residents would no longer enjoy the right under The Online Content Portability Regulation to port their Spotify subscriptions when travelling in the EU.  The same would apply re Netflix of course and Peter has asked me to mention the greater effects of no deal on the audio-visual industries, including the need for UK-based broadcasters to set up office in the EU to continue benefitting from the country of origin principle under the Satellite and Cable Directive and the Audio Visual Media Services Directive, under which broadcasters can broadcast throughout the EU while only being required to comply with the laws of the member state in which they are established.  Also, UK productions would no longer be classified as European programmes so as to benefit from the quota rules under the Audio Visual Media Services Directive requiring the broadcast of a certain proportion of EU programmes. 

Overall though I think the message for the music industry is that old British adage of “Keep Calm And Carry On”, and no doubt things will become clearer by the time we meet here again next year, although that has been said before of course!”

Gordon Williams, Lee & Thompson LLP