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Movistar + Expands Its International Reach

In budget, and even maybe cinematographic values, the weightiest world premiere at this year’s San Sebastian Festival, the biggest movie event in the Spanish-speaking world, will be a TV drama: Movistar Plus’ “Gigantes,” a brutal Madrid crime family saga.

Another Movistar+ original series, Paco Leon’s “Arde Madrid,” a comedy shot in black-and-white about the antics and tribulations of Ava Gardner’s domestic staff in 1961 Madrid, has potential as a crowd-pleaser.

The premium pay-TV operator is seeking to create content that will set it apart from rivals, and “Gigantes” and “Arde Madrid,” its ninth and 10th original series, form part of the most muscular drive into premium TV production by any of Europe’s big telecoms.

Movistar + parent Telefonica, Europe’s second biggest telecom, whose 2017 revenues totaled €50 billion ($60 billion).

The content drive is now showing its first results, not only in Spain but also abroad, where Movistar + cut its first banner deals.

In the U.S., Starz has acquired “La Zona,” a murder mystery set against a nuclear plant meltdown, in one of the earliest deals by a U.S. premium cable operator on a Spanish series; Beta Film is selling the series for Movistar Plus. “La Zona” has also sold to France’s Canal Plus, and German public broadcaster ZDF.

The U.K.’s upscale BBC4 began broadcasting “The Plague” in Saturday night primetime on Sept. 1. Directed by Alberto Rodriguez (“Marshland”) and set in a dazzling 1580 Seville, the historical serial killer thriller — Movistar Plus’ biggest-budgeted series to date, costing a first-season $11.7 million — has also been acquired by Sky Deutschland. Viasat World has licensed rights across the U.S., Europe and Africa on “The Plague.”

Meanwhile, public broadcaster RAI has picked up Italy rights on fashion house melodrama “Velvet Collection,” Movistar Plus’ first series, released last September; Netflix has acquired rights to most of the rest of the world.

In Latin America, Movistar + is taking a different route of direct distribution, launching a channel, Movistar Series, available free-of-charge starting Feb. 15 as part of the basic package of Movistar TV’s pay-TV offer and OTT service Movistar Play. Mixing Movistar + original series and third-party content mostly produced in Latin America and Spain, its “quality Spanish-language TV series and movies are closer to the culture and feelings of Latin American audiences,” says Michael Duncan, CEO of Telefonica’s Global Consumer Unit.

By late August, Movistar Series was available in Chile, Colombia, Peru, Ecuador, Costa Rica, El Salvador, Panama, Nicaragua and Guatemala. It will launch in Argentina, Uruguay and Mexico “in the next few weeks,” Duncan said at that time.

“Movistar + is creating series fundamentally to offer our platform’s clients in Spain unique, distinctive content,” says Domingo Corral, Movistar + director of original fiction.

But international reach matters, he adds. One reason is revenues: First season international sales alone don’t cover the costs of a series. But on hits, they can contribute significantly to their bottom lines, Corral says.

Above all, however, the battle for premium TV is becoming ever more a battle for premium talent — witness Netflix signing up Shonda Rhimes and Ryan Murphy. Telefonica needs to show world-class Spanish-language talent that it, too, has what Corral calls “international repercussion.”

“When Telefonica decides on something, they just go and implement it, with enormous resources,” says Francois Godard at Enders Analysis.

By the end of San Sebastián, Movistar + will have launched 10 series as well as the sophomore season of “Velvet Collection” in 13 months, and achieved a high-profile major market presence. Sensual thriller “The Pier,” from “Money Heist” creators Alex Pina and Esther Martínez Lobato, is one of the most-awaited series at this October’s Mipcom, where it will receive a gala world premiere screening.

In Latin America, Movistar Series is already placed among the top five channels in most countries where it airs, according to a Telefonica source. Latin American pay-TV clients climbed 4% in the first six months of 2018 to 4.801 million on June 30. And Movistar + has cut some stellar deals.

“If somebody had told me a year ago that one of our series would be airing in primetime on the BBC, I wouldn’t have believed them,” Corral says. “We’ve only been going for a year, not a decade. We’re just beginning. From that point of view, our early international results are positive.”

But it is the potential of Movistar +, especially in Latin America, that may give it a competitive advantage. Netflix had 124.4 million paying subscribers worldwide by June 30. Total Movistar TV, mobile and broadband customers amount to 200 million in Latin America, says Duncan.

IHS Markit expects “at least” 1.5 million new traditional pay-TV subscribers for Telefonica in Latin America by 2022, with most of the growth coming from Peru and Brazil.

But many more new subscribers will come for the online services that have already launched and that Telefonica Movistar is planning to bow this year, says María Rua Aguete at IHS Markit.

Just how fast Movistar + builds in Latin America may depend in part on its drive into local production. It’s no coincidence that Telefonica-Movistar’s biggest success story in Latin America is Peru, where it set a record in the second quarter for gross pay-TV additions, offering the most original content of any operation in Latin America via a six-channel bouquet.

Movistar + is teaming with Fox Networks Group Latin America and Pablo and Juan de Dios Larrain’s Fabula in Chile to develop “Santa Clara” (a working title), “a series with Spanish and Latin American elements,” according to Corral.

Movistar + is “in active conversations with talent in the region and possible partners, though yet to close deals,” he adds.
“There’s a market opportunity in Latin America where there are signs of a demand for a slightly more sophisticated series,” Corral says. Telefonica-Movistar + is well placed to reap this harvest.

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