Spanish cinemas on strike

Arthouses in Spain protest government's film law

MADRID — At 11 p.m. last Monday, Madrid’s Morasol Cinemas should have been halfway through its late-night session. Instead, a metal awning was padlocked over the six-plex’s entrance.

Taped to a wall, a flyer proclaimed: “This cinema will remain closed Monday June 18 in protest of the government film law. …”

On June 18, this despondent scene was repeated all over Spain. Spain’s main Renoir, Golem and Verdi arthouses stayed open. But many major mainstream loops — Yelmo Cines, Cinesa, Abaco-Cinebox, ACEC — shuttered. Per exhibitors’ lobby Fece, 93% of Spain’s cinemas — 3,770 screens — closed for the day.

The move was in reaction to the Spanish council of ministers’ approval June 1 of a draft film law which bettered tax breaks for pic production, but ignored exhibitors’ main demands: capping distributor rentals and regulating six-month exclusive theatrical windows.

The bill also maintains the years-old exhibition quota, which requires cinemas to play one Spanish or other EU-territory pic for every three foreign (read U.S.) film screenings.

“Spanish films are increasingly unpopular in Spain,” Fece’s Rafael Alvero declared June 15, announcing the strike. Local pics’ market share in Spain — 7.8% through June 3 — no longer justifies a 25% screen quota, he argued.

Alvero’s Spanish film slur was a red rag to a bull for the Spanish press.

It’s also something of a red herring. The hardtop lockout has other reasons.

“The screen quota probably hurts exhibitors a bit, but Spain’s exhibition market is a complete disaster,” says Karsten Grummitt, managing director of Dodona Research in the U.K.

Comparing Spain in 1998 and 2006, Grummitt argues, admissions are basically flat — 119.8 million vs. 121.65 million. But Spain has added a net 1,235 screens.

For Grummitt, over-plexing has been driven by real estate development. Fueled by cheap money, Spain has seen a 14-year property boom.

American-style suburbs have sprawled around major cities. Suburbs need shopping malls to attract house-buyers. Malls need cinemas to drive traffic. Construction companies have built them, then rented them to exhibitors, as loss leaders.

According to Media Salles statistics, Spain now has a cinema screen for every 9,779 inhabitants. That compares with France’s 11,565, Italy’s 15,409, Germany’s 16,875 and the U.K.’s 17,889.

The real rub for exhibitors is to bring down U.S. distributors’ cut of B.O. grosses. Averaging 51%-54%, per divergent estimates, they’re higher than Britain and Italy’s 45%.

“If the government wants to regulate, it should compensate us for the screen quotas,” says Yelmo Cines CEO Fernando Evole.

As Evole points out, a market shakeout has set in: screen-count dropped by 102 to 4,299 last year.

The shakeout could be long and hard. Rampant piracy — Western Europe’s highest level — has plunged per-screen-admissions to 28,297 in 2006, 27% down on 2000.

While exhibition suffers, more industrial action could follow.

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