News | Gütersloh/ London, 05/31/2016

‘The EU has helped the U.K. to become a creative powerhouse’

Interview with Baroness Gail Rebuck

Whether as a publisher, a creative, an entrepreneur or a member of the House of Lords – what Gail Rebuck’s says carries weight in Britain. She is heard far beyond the literary world. In 1982 she co-founded a publishing house. In 1985, she became the Publisher of Century Hutchinson, and in 1991 CEO of Random House U.K.. In 1998 she took the helm of the Random House Group U.K.. She has been a member of the Bertelsmann Group Management Committee (GMC) since 2012, and since 2013 has chaired the Penguin Random House U.K. Board.

In the summer of 2014, Baroness Gail Rebuck was appointed to the House of Lords. At the time she said, “I have always seen politics and Parliament as vital forces shaping our national and global lives.” In her home country, politics is currently dominated by the upcoming Brexit referendum. As part of today’s British theme day, Gail Rebuck discusses this and other issues in an interview with BENET. 

You represent the United Kingdom, one of Bertelsmann’s most important and traditional markets, on the GMC. What is your view of the current situation of Bertelsmann businesses in Britain and how important is Britain as one of the most creative countries for Bertelsmann?

Gail Rebuck: The creative industries in the U.K. are worth £84bn a year and growing twice as fast as the rest of the economy. Publishing contributes about £10bn, of which books are £5bn, but these numbers do not include the contribution that U.K. authors and books make to the wider creative economy. Three of the largest global film franchises of all time – Lord of the Rings, James Bond and Harry Potter – are from British authors and books provide endless material for top-rated TV drama series such as John Le Carré’s The Night Manager. 

Penguin Random House in the U.K. is by far the largest trade publisher, publishing approximately 4,000 new books a year, with a great focus on exports. Fremantle Media’s U.K. interests are also critical to the global production group as the U.K. has traditionally been their home market and the source of most of their hugely popular and profitable global formats like “Idols”, “X Factor” or “The Farmer Wants a Wife”. 

BMG is growing its integrated music publishing and recordings business year-on-year and making a real splash in the music industry and Arvato is showing positive growth with recent U.K.-wide reports suggesting that the services industry is performing well. Printing is also represented in the U.K.. Furthermore, Britain is a great hub for growth platforms, both on a Bertelsmann level with BMG and Education, and on a divisional level with Stylehaul and SpotX. 

All in all, the U.K. is Bertelsmann’s fourth largest territory with € 1.7 billion revenues and thousands of employees. Our U.K. businesses have been growing by 10percent on a yearly base since 2011. The content businesses in the U.K. account for 75percent, one of the highest percentages in any Bertelsmann territory. 

At recent Country Coordination Meetings, a possible Brexit has been an important topic. How would you describe the general mood among our managing directors in view of a possible Brexit? 

Gail Rebuck: At our 2016 Country Coordination Meeting in the U.K., a question was raised about Brexit from Arvato, asking for Bertelsmann’s positon. From Arvato UK’s perspective, the services we are engaged in are often Europe-wide with call centers requiring multiple-language speakers and benefitting from the free movement of a European workforce. It was also felt that it would be more challenging to attract global business service opportunities if the U.K. was perceived as too isolationist. 

The Referendum in the U.K. on 23 June is, of course, an individual voting decision but the heads of the Bertelsmann businesses represented at the UK CCM were unanimous in wanting to remain in the European Union for a variety of strategic and commercial reasons. 

How would a Brexit generally affect the media and creative industries in the U.K.? 

Gail Rebuck: The EU has helped the U.K. to become a creative powerhouse. This is partly because of the EU funding that creative industries receive and partly because our ability to trade freely with 27 other countries in Europe has boosted cultural exports for decades and enabled British artists to tour and collaborate across borders. There are around two million people working in the creative industries in the U.K. and all need those industries to keep growing and flourishing. Over 125,000 EU students study in U.K. universities and 15 percent of their academic staff are from EU countries. They make an important contribution to the U.K. economy and culture but they are also a key source of talent. 

Finally and importantly, EU laws help protect copyright for the authors, creators, writers and musicians who are so crucial to many of Bertelsmann’s businesses. Although there are differences in direction from time to time, I believe that the U.K. is better off with a seat at the table influencing policy. 

What practical consequences could a Brexit have for Bertelsmann’s businesses in the U.K.? 

Gail Rebuck: The biggest problem is that we can’t say, because no one really knows what ‘out’ looks like. That is one of the reasons why I think it is too big a risk to take. At the moment, we have full access to the EU’s single market of 500 million consumers with a say about how it functions. That means we can make sure the rules work for our companies and for the British economy, as well as for other businesses in the EU. There are alternative models to single market access if we were to leave, but none of them are as good as the deal we have at the moment. 

If we leave, we will lose access to EU funding for universities and the arts. I worry that we will then have fewer talented people able to pursue careers in TV Production, Publishing, Music and Education because they won’t be able to get the financial support they need. From a broader business point of view, no one on either side of the debate denies that the British economy would take a hit if we were to leave. The only questions are how bad would it be, and how long would it last – that is not good for any of our businesses. It would be particularly bad for outsourcing and solutions divisions whose clients would be hit in any potential widely anticipated post Brexit recession and reports show that broadcasters and publishers would also be impacted by a fall in advertising revenues. 

What is your current assessment of the current Brexit debate in U.K. and across the EU? 

Gail Rebuck: Taking the point about other countries first: it is clear that none of the other EU members want us to leave. Those (like Albania) who want to join the EU are baffled as to why we would even consider leaving. But the international support for us to remain goes much broader than other EU members. Former Prime Ministers and Presidents of countries from the USA to China, Australia, Japan and Canada have voiced their concern for the U.K. – and for the rest of the EU – if we were to leave, with many of them saying we would be worse off if we did. 

President Obama recently visited the U.K. to deliver a powerful message for the U.K. to remain part of Europe. 

In the U.K., the core of the EU debate is pragmatic and based on economic arguments. The leadership of all 3 main political parties are pro remaining in Europe, although there are of course dissenting voices in each, in particular in the Conservative Party, where the arguments focus on British sovereignty and the complex issue of immigration. The printed press in the U.K. are mostly pro Brexit but are now covering both sides of the debate. The polls are close, but with around a third of the electorate still undecided, it is difficult to predict. 

It is probably true to say that the British public see the economic benefits of being in the EU and having full access to the single market but, at the same time, worry that too much decision-making power has moved to Brussels. People perhaps feel that if Brussels did less, it might achieve more, which is why the U.K.’s voice needs to continue to be heard. 

In the publishing community in the U.K., an online poll by The Bookseller reported that 70percent of those expressing an opinion were in favour of remaining IN and that included the CEO of our largest book chain, Waterstones. His argument was that the U.K. is currently a stable, effective economy without uncertainty. 

Other reasons for remaining IN, expressed by the publishing industry, were that Brexit would be a ‘financial disaster’, worry about the imposition of new trade barriers, a lack of foreign direct investment and free movement of workers. 

My final point (for colleagues in the U.K.) is that, whatever your views on the EU, please make sure you vote. This is a decision that will have an impact for well over a decade and – whichever way you vote – it is important that this is a decision that you helped to make and not one that is made for you. (benet)