UK digital investments at risk in Brazil?

The news that Warner Media, the US giant, is expanding further into Latin America is a significant step.

They are investing significantly in streaming on-demand media. It is clear they see this as an important market.  The UK and Europe should likewise look to our Latin American friends for enhanced trade and investment.  This has never been more important than now, with new technologies set to determine the growth markets of the future.

This is why regulatory clarity and stability matter.  Businesses need to minimise long term risk, and need confidence that the markets in which they invest are stable and reliable.  Latin America has faced uncertainty in many guises over the years, often driven by governments of varying political colours.  That Warner Media is taking such a significant step underlines the view that it is increasingly a good place to do business.

But it is not a good sign that Brazil is to be excluded.  Famous for its rainforests, biodiversity and vibrant culture, this country of 210 million people has a GDP of nearly $2 trillion.  It is a huge part of Latin America and a key market for any outward looking trading nation. 

In 2011 the Government of Brazil passed what is known as the SeAC law, it mandates Brazilian content quotas for media broadcasters and includes restrictions that prevent cross ownership.  This means that media companies cannot own both content producers and broadcasters or channels.

These sorts of regulations have caused significant debate, and problems for large companies wanting to invest and expand. This is a fast moving market which has seen companies often producing and broadcasting their own content in order to compete and offer a better service.

With global companies like Warner Media this matters directly to the UK.  Their studios in Leavesden are important employers and contributors to the UK creative industry.  We want to see them invest more in the UK.  When George Osborne was Chancellor he introduced a range of incentives and tax breaks to promote our already top class creative and film industries.  In the global economy, though, events and regulations the other side of the world can have an impact at home.

We need to support investment, and reap the benefits of global trade.  We also need to be clear that, whilst we respect sovereignty and the democratic rights of countries to choose their leadership, we always want to see appropriate and stable regulation.  Brazil has huge potential for future investment and there is an appetite in the UK to reach out to new markets and build deeper and stronger relationships with old friends.  This was recently underlined by the priority given to a visit by Boris Johnson’s Minister of State for Trade, The Rt Hon Conor Burns MP, so soon after his appointment. 

In areas such as this, out dated regulation and uncertainty can stifle investment.  We should be advocates for good sense reform that can unlock the potential that we all want to see realized.

For a large company to step up its investment in Latin America, but exclude Brazil, is a sign that something is wrong.  UK companies will likewise be watching with interest and drawing their own conclusions.  Hopefully, whether in this sector or any other, we can continue to build on our ties and deepen our relationships.  Regulation and stability may not be the catchy political buzz words of the day, but they will determine much of the course of our shared futures.