The UK has just, via a referendum, voted to leave the European Union. There are a lot of things this leaves up in the air, not least the leadership of the country (Prime Minister David Cameron announced his intention to leave office by October). And there won’t be any material changes to things like entry into the country for at least the next two years, the realistic minimum length of time it will take to properly negotiate what happens next.
There will, however, likely be changes in the medium to long term. Any alteration to the reciprocal freedom of movement UK citizens currently enjoy with our European neighbours might see the necessity to provide carnets for transporting equipment across borders; and perhaps even the possibility of an I-visa like system for controlling who can report on what and from where, especially relevant for news crews.
Screen Daily lead their coverage with a quote suggesting leaving the EU will be ‘devastating’ for the UK’s film and TV industry, and through a variety of vehicles the EU has contributed hundreds of millions of Euro to UK productions over the past ten years alone. Harvey Weinstein has also used the D-word, and shares in ITV and Sky have dipped sharply since the result of the referendum was announced. Documentaries, often funded piecemeal from a variety of sources, could also suffer if production companies in the UK are no longer able to access European funding bodies.
The impact has been felt across the world. Japanese camera manufacturers have taken a hit to their share prices overnight – Panasonic, Sony, Nikon and Canon are all down by between six and seven percent. Worrying but probably (possibly?) not enough to cause big shifts in their UK strategy just yet, unless of course this is the first sign of a trend rather than a one-off hit. Longer term though there’s also the question of whether it will still make sense for a big multinational to have a European HQ in Britain.
Sigma Imaging also have a UK outpost and their General Manager Graham Armitage had this to say to Dan earlier today: “Sigma Imaging (UK) Ltd purchase all our products direct from our parent company, the Sigma Corporation, in Japan. Our supply price is directly influenced by the exchange rate between GBP and Yen as all our equipment is manufactured in our Aizu factory in Northern Japan. Of course we build in a small buffer which prevents the necessity of constantly changing our prices with every minor fluctuation of exchange rate but the dramatic fall in the value of sterling as a result of today`s vote to leave the EU is far too great to be absorbed in this way. We feel that sterling will recover to some degree and we are observing the markets before making any dramatic decisions but changes in prices seem inevitable. Today we have already seen a pronounced spike in demand from retailers wishing to stock up on popular products at current prices. However if sterling remains weak against the Yen and other currencies then price increases will find their way onto the high street sooner rather than later.”
So far, so gloomy – and now’s the time to buy if you’ve got your eye on any of Sigma’s products. Any obvious upsides? If you’re holding a lot of Dollars or Euros and need to purchase equipment or products from the UK, now is as good a time as any – the pound’s unprecedented fall in the last 12 hours means at the time of writing you’re essentially getting an 8% discount just from currency devaluation if you pay in USD.
Leading UK equipment supplier CVP has no immediate plans to raise prices in response to today’s exchange rate drops. Site editor Dan asked the company’s Operations Director Steve Baxter whether UK buyers should go out and buy lots of things today – he said “We don’t think its good for the industry, our customers, or us to do anything on a kneejerk basis and there is probably no point in panic buying.” He expects the pound to “stabilise after the short, sharp shock” of the initial Brexit news.
According to Baxter the company want to continue to offer the same value and quality as before and will only shift prices if they are forced to. The exchange rates do make buying more attractive to shoppers from outside the UK. Baxter told Dan that for those people “it is probably a nice time to buy” existing stock on dealer shelves. Some big ticket items are significantly cheaper today if you are shopping from abroad. “Due to CVP’s position in the market and our ability to hold greater stock levels than our competitors and buy both more sensibly and competitively we feel confident that we can ride out the short term storm of fluctuation exchange rates – in short we are most certainly open for business!”
From a smaller manufacturer’s point of view, Bright Tangerine‘s Rob Eagle says that “Bright Tangerine are not planning on changing our US dollar pricing at the moment – right now it’s a cost to the company and not to the customer. Of course like all other UK companies we’re watching this very closely. It’s a case of wait and see.”
Newsshooter contributor Simon Glass is just back from France after working at Euro 2016 and his take for UK shooters isn’t very rosy: “I think the main thing is that we will lose the free easy movement around Europe. There is the possibility of having to get Visas when travelling in Europe – this will add costs and will be time consuming. What is great at the moment as you don’t need a carnet when travelling in Europe with kit unlike when travelling the US etc. You can bring your kit in and go straight through customs and get on with filming. If this changes we will have to have carnets which are expensive and a pain. It will make travelling a lot harder.
There is also a possibility that the costs of flights will increase due to increased landing fees and fuel – therefore productions may opt to send a self shooter or use more locally-based crew in the destination country rather than bring a crew from the UK as it will be more cost effective. There is also the possibility that hotels and meals may be more expensive due to the exchange rates. This again may put productions off from filming abroad.”
Lighting cameraman/DP Paul Gwilliams has a slightly more optimistic view: “Travelling and working in Europe has always been pretty straightforward and I can only hope this continues. Carnets are a pain – always! – Several countries I’ve been to didn’t even seem to know how to process them, so let’s hope they aren’t introduced for UK travel to Europe – I suspect not. I also have a feeling that we’ll still be able to travel/work on filming assignments unrestricted – we’ll see but as long as it’s not like trying to work/shoot in the US then all is fine, I don’t think it’s in anyone’s interest to make life difficult for news/TV/corporate shooters.”
Gerry Morrissey, General Secretary of BECTU, the UK’s media and entertainment union, have told us “BECTU is deeply disappointed by the referendum results but we, like every other trade union in favour of Remain, will be doing our utmost to lessen the negative impacts of the decision to Leave.” That doesn’t shed much light on what they think the consequences might be for our industry, but they have also published a statement that’s more exploratory and definitely worth a read. It’s not a terribly pretty picture though, as entities like production companies that are essentially part of the service industry are traditionally excluded from or seen as adjuncts to trade agreements. Basically: it would be surprising if the creative industries were a priority in the coming negotiations of trade agreements.
And if you’re from the EU and are planning a long term shoot in the UK, it’s probably better you come sooner rather than later. If you’re hiring equipment or talent locally you’ll save money compared to this time last week and for the next couple of years at least you’ll not need any special paperwork or visas to come to the UK and start production. After that, frankly, it’s anyone’s guess.