New media faces obstacles

Content holders must leap over problems

MADRID — Sogecable, Spain’s leading pay TV operator, is determined to mix the country’s ancestral tradition with new business. The world’s most prestigious bullfighting event, at Madrid’s San Isidro Fair, can be viewed live via 3G Vodafone cell phones on premium channel Canal Plus Eventos, part of Sogecable’s Digital Plus Movil platform.

Launched in December by Sogecable and Vodafone Spain, DPM broadcasts 16 round-the-clock channels and five live.

That’s just one new media move in Spain. From cell phones to broadband TV and VOD portals, Spain’s main film and TV rights owners are cautiously making deals. The question isn’t if there’s money to be made — there is. The question is really how much, and can the market grow.

On April 25, mini-major Filmax Entertainment and France Telecom’s Orange opened Spain’s first cell phone video club with Filmax’s hit “Perfume: The Story of a Murderer.”

On March 27, Egeda, Spain’s producers’ rights collection society, launched, an open Web VOD retail and rental site. Its initial Spanish pic catalog includes 250 live-action features plus shorts and animated movies.

Another rights collector, SGAE, bowed La Central Digital in 2003. Apart from music, the B2B contents management system offers some 800 European and Latin American film titles for VOD and pay TV.

“The new tech platforms complement traditional DVD distribution,” explains Carlos Rojano, Filmax business general manager.

But new-media growth faces obstacles.

One’s piracy. From June 2005 to June 2006, there were 132 million illegal movie downloads in Spain, Western Europe’s piracy champ.

Plus, the takeup of new services can be slow. In July, Telefonica P2P portal Pixbox partnered with Universal Pictures Spain to sell U movies. By December, Pixbox had registered more than 150,000 downloads, but these were mainly music files.

But for indie distribs and producers, broadband TV VOD already reps small but useful coin. Telefonica’s IPTV platform Imagenio, now one of Europe’s biggest, reached 383,000 subscribers by year-end 2006. Its VOD service taps titles from Disney, Paramount, DreamWorks, WB and most indies.

The 1-year-old IPTV platform Orange TV sells VOD titles from Disney and Spain’s Filmax and DeAPlaneta as part of a quadruple-play offer. Telco Jazztel’s IPTV service Jazztelia, which operates a VOD window, offers firstrun and catalog films from Manga, Tripictures, Filmax and Versus Entertainment.

OJO TV, the VOD service of dominant cable operator ONO, sells pics from Universal, DreamWorks, Fox, Paramount and Disney as well as Spain’s Manga, Filmax and Notro.

Operators pay up to $8,054 per title, then work a 50/50 revenue split while sharing revenues on catalog pics.

A few operators offer pay TV windows that pay $8,054-$26,847 per title, still way below traditional pay TV prices.

Other companies are activating Internet VOD portals, targeting Spain’s 7 million-plus broadband users.

Egeda’s Filmotech boasts highly competitive prices: $2.62 per week with unlimited views; $2.62 for three views during three months, and Download to Own for $7.79.

For producers, Filmotech offers an attractive business model: After digitizing films via Egeda Digital’s lab, it takes costs off the top, then remits remaining returns to producers. These can reach more than 50% of the revenue, according to Fernando Lopez, Egeda’s corporate development director.

Despite some typical technical teething problems, Filmotech’s been welcomed by Spain’s film community. Among most downloaded first-month titles were Vicente Aranda’s “Mad Love,” Spanish-Argentine comedy “Almejas y mejillones,” Paz Vega starrer “Sex and Lucia” and Luis Berlanga’s classic “Calabuch.” In two months, its contents will be accessible worldwide.

“If we want to become a legal alternative to piracy, we must offer an early release of firstrun titles on portals,” says Lopez, who plans to add European films.

More open Web VOD services will follow, such as FilmStar, promoted by Ociovision. FilmStar is testing its DivX compression technology with pics from Notro Films and subsid distrib Versus, and is encouraging video retail outlets to promote the service on a commission basis.

But broadband TV offers better business for film than VOD Web portals.

La Central Digital, whose catalog also includes 1,500 hours of European animation, sells film titles to IPTV operators — Orange TV and Imagenio — and provides worldwide film rights and its streaming technology to VOD Web portals, including,, and

Orange TV carries two thematic channels packaged by La Central: indie films’ Canal Autor and El Gato Feliz, showcasing European toons. Imagenio will soon carry both channels.

If a catalog film title is sold on an IPTV VOD platform for $2.15, La Central gives its provider 81¢.

Per Sydney Borjas, audiovisual strategy director at SDAE-SGAE, revenues from IPTV sales are increasing 20%-25% a year. (SDAE is the digital division of SGAE.)

But the market demand hasn’t consolidated for VOD Web business, Borjas says.

Mobile TV is also immature. 3G cell phone users could reach 4 million users by year-end. Vodafone Digital Plus Movil was a watershed.

“We’re just beginning. It’s important to test new formats to see where we should dedicate most energy,” explains Jacques Roldan, head of Sogecable’s New Media Contents Unit.

Starting last month, Vodafone Live! clients pay $11.60 a month for DPM. A free, trial DPM drive attracted 140,000-plus subs.

Filmax has launched Filmax Mobile, having produced more than 1,000 multiplatform clips. Non-adult movies have a short, but checkered, history in legal new media. On some services, adult content, news, sports and music have proved more popular. Some producers doubt film’s longterm new-media prospects.

“Historically, film drives new platforms. Once consolidated, they’re not interested in movies,” says Zebra’s Antonio Saura.

But Saura appreciates new media’s “creativity and increasingly immediate relation with the public, which mitigates manipulation.”

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