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Spain’s VOD Boom May Have Lasting Effects

Netflix’s first Spanish original TV series, “Las Chicas del Cable,” which became available to subscribers April 28, captures the excitement of a technological revolution, imagining a plush 1928 Madrid where four young girls work as switchboard operators at Spain’s first nationwide telecom. Targeting female telenovela-sated audiences worldwide with upscale romantic melodrama, “Las Chicas del Cable’s” central issues remain, however, startlingly familiar: Machismo, pre-destined love and broken hearts.

Fast-forward 90 years from 1928 and Spain is caught in another cable revolution: VOD. Netflix entered Spain in October 2015; HBO España, a standalone streaming service, followed suit last November; Amazon Prime Video a few days later.

Netflix has bought bullishly, acquiring dozens of films from top Spanish companies, reportedly often paying premium prices. It has produced its first Spanish original movie, workplace thriller “7 Días.” But that buying spree may be over.

“They’ve been a great partner,” says Nostromo producer Adrian Guerra (“Palm Trees in the Snow”). “But we need to see if Netflix’s purchases were a [first-phase] wave, as it will depend on how the films perform now on their platform.”

Amazon will reportedly move into movies from the end of the year, but may prove more selective than Netflix from the get-go. HBO España is said to be aiming to produce one high-end appointment TV series a year.

So the Spanish film industry’s problems remain startlingly familiar: Regulatory uncertainty, under-capitalized public funding scheme and public broadcasters.
Central government funding at Spain’s ICAA film institute remains meager: just €30 million ($32.7 million) for new films in 2017.

Producers traditionally look to pubcaster Radio Television Española (RTVE) to pre-buy auteur and alternative movies. But RTVE labors under huge fiscal pressure. Its first 12 pre-buys this year sparked a furor, not for the projects selected, but those passed over: new titles by prestigious auteurs such as Iciar Bollain, Benito Zambrano and 2016 Cannes Critics’ Week winner Oliver Laxe (“Mimosas”).

In such tightened circumstance, Spain’s film industry is diversifying fast. Bringing to the table a $75 million annual investment in original TV fiction, Movistar Plus is launching its first four original series in October: “The Zone,” “The Plague,” “Velvet Colección” and comedy “Vergüenza.” Some 10 new releases will air in 2018. Many Movistar Plus series are made by top movie directors or producers, including four of Spain’s latest six best picture Goya Award directors: Cesc Gay (“Felix”); Alberto Rodriguez (“The Plague”); David Trueba (episodes of “Whatever Happened to Jorge Sanz?”) and Enrique Urbizu (“Giants”).

“We need to see if Netflix’s purchases were a [first-phase] wave.”
Adrian Guerra

“This is great news for the film industry, given producers’ lack of options to make films, and Movistar Plus’ recourse to film producers for its pay TV series,” says Alvaro Longoria of Morena Films, who admits his company is “trying to move more into TV.”

Sales agent Latido Films is initiating high-end TV series sales, says director Antonio Saura, beginning with “South” from Portugal’s Ivo Ferreiro (“Cartas de Angola”).

Producer and sales agent of the original “Red Band Society,” Filmax is looking to bring its expertise in international sales and financing to broadcasters with which it partners, and split rights with TV operators in order to allow Filmax to bring tax-break financing to the table, says Filmax CEO Carlos Fernandez.

“International business is driven by event movies, big art films, risky new talent movies and crossover films with artistic and audience ambition and big fest potential,” says Film Factory Ent.’s Vicente Canales.

It’s questionable how many films of this ilk will be engendered by new points system subsidy regulation, in place since 2016, that prioritizes incentives for projects with TV/theatrical distribution and sales agents’ minimum guarantees.

So companies are increasingly looking to partner with Latin America. “You can find gems in Latin America, films of large thematic richness,” Saura says.

As marquee Latin American directors — think Damian Szifron, Pablo Trapero — step up in scale on ambitious projects that attract Hispanic stars, Spanish companies — Telefonica Studios and El Deseo, most recently — are boarding higher-end projects that can attract Hollywood studio distribution. In the latest move, Mod Producciones has co-produced Santiago Mitre’s Un Certain Regard entry “The Summit,” starring Ricardo Darin and distributed in Latin America and Spain by Warner Bros. Tandem Films, the newly launched production label of Cristina Zumarraga and Pablo Bossi, looks also to work a Latin America-Spain co-production axis.

Or companies are looking to mixed financing formulae. Combining pre-sales, equity and local Spanish funding, Adrian Guerra is co-producing the English-language “Down a Dark Hall” from Rodrigo Cortes (“Buried,” “Red Lights”). Lionsgate, “Twilight” author Stephenie Meyer’s Fickle Fish Films and Temple Hill Ent. are co-producing “Down a Dark Hall.” Nostromo also used Navarre’s film tax shelter, EU approved last August, to co-finance the Navarre-shot “The Invisible Guardian,” bringing more financing muscle to one of Atresmedia’s event movies. In the Basque Country’s Biscay, producer Eduardo Carneros is looking to apply 30% tax deductions for local investors to co-finance “Red Fjords,” a co-production with “Everest’s” Baltasar Kormakur.

Above all, the Spanish film industry is simply being more selective. Spain and international markets can absorb far fewer films, and, whatever their type, they have to be quality titles.

“We had a very good year. But we must be far more selective, focusing on films which are interesting for festivals,” says Saura.
“We’re producing far less than before, analyzing projects, measuring risk, investing in development, producing films with roots in Spain, but international potential,” Fernandez adds.

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