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Paramount Home Entertainment Intl. will distribute all Universal Pictures Intl. Entertainment DVD and Blu-ray releases in Spain.

Kicking in Jan. 2, the agreement runs five years. The accord covers film and TV content from UPIE and its partners. It embraces the operations, finance, sales and marketing of all UPIE prodct.

Among first titles bowing under the arrangement will be U toon hit “Despicable Me” and “Get Him to the Greek.”

U’s partnership with Par offers economies of scale for both in a rapidly diminishing market.

Blockbuster pulled out of Spain in 2006 as a protest after videostores illegally rented out retail units.

Ravaged by piracy, the Spanish DVD market has lost some 60% of its value, shrinking from €857 million ($1.1 billion) in consumer spending for rental and retail in 2003 to an estimated $466 million this year.

“Following Blockbuster’s exit and given the decline of Spain’s home entertainment market, this partnership is not totally surprising,” said Screen Digest video analyst Tony Gunnarsson. “It is consistent with Universal’s other licensee agreements elsewhere, such as in Eastern Europe.”