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Telefonica’s Movistar Continues to Grow Subscriber Base in Spain

MADRID — Marking its eighth quarter of consecutive growth in pay TV clients, Movistar Plus, the pay TV/SVOD division of Telefonica, Europe’s third-biggest telecom, punched 11,300 net additions in customers from April to June.

The figure is 49% up year-on-year in terms of net adds, and takes Movistar’s total pay TV sub count in Spain to 4,106,100, extending its domination as Spain’s biggest pay TV player.

“These are very good results coming despite the recent launch of multiple new video OTT players in Spain and the end of the soccer season,” said Maria Aguete Rua, IHS Markit executive director, technology, media & telecom.

“This proves that it’s not only sports that drives pay TV growth in Spain, but also content, movies and series,” she added, noting that eight of the top 10 shows on Movistar Plus’ platform are original series.

Movistar clients in Spain may have got into a habit of including TV in their fiber optic and mobile packages: 81% of customers taking multiple Movistar services include TV in the mix, up three percentage points from the same period a year earlier, Telefonica COO Angel Vilá said at an analysts’ conference call on Thursday.

Individual shows may also have moved the dial, while stemming churn at Movistar. Released this June, “Hierro,” a classic series noir murder mystery distinguished by its setting – the Atlantic isle – and lead performance by Candela Peña as an honest by-the-book judge and self-sacrificing single mother, has proved a breakout sleeper for the pay TV service.

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Telefonica can now look for further subscription growth from various sources. On June 4, it launched Movistar Plus Lite, a standalone bouquet of eight live channels including #0, #Vamos, Movistar Series, Movistar Seriesmanía, Fox, TNT, Comedy Central and AMC, priced at just €8 ($9) and not requiring subscription to any higher-priced Movistar offer.

“Telefonica has traditionally targeted very high-value clients that pay a lot for everything. Lite will target a new market segment which might otherwise end up with Netflix or HBO,” Rua Aguete said.

Movistar clients in Spain have gotten into a habit of including TV in their fiber optic and mobile packages: 81% of customers taking multiple Movistar services include TV in the mix, up three percentage points from the same period a year earlier, Telefonica’s Angel Vilar said at an analysts’ conference call on Thursday, analyzing Telefinica first half results.

Individual shows may also move the dial and stem churn at Movistar. Released this June, “Hierro,” a classic series noir murder mystery distinguished by its setting and lead performance by Candela Peña as an unbending by the book judge and self-sacrificing single mother, has proved a breakout sleeper for the pay TV service.

Telefonica can now look to further subscription growth. On June 4, for instance, it launched Movistar Plus Lite, a stand alone bouquet of eight live channels including #0, #Vamos, Movistar Series, Movistar Seriesmanía, Fox, TNT, Comedy Central and AMC, priced at €8 ($9) and not requiring subscription to any higher-priced Movistar offer.

“Telefonica has traditionally targeted very high-value clients that pay a lot for everything. Lite will target a new market segment which might otherwise end up with Netflix or HBO,” Rua Aguete said.

For the second year running, Vodafone will not be offering Spanish soccer matches in the upcoming season, which kicks off in August. Movistar may well have benefitted from Vodafone’s pull out of soccer last season as it notched up 101,500 net adds over July to September 2018. It may benefit again.

Released at the rate of about one a month in Spain, excepting the high summer, Movistar Plus Original Series look to have become near automatic event plays for some of the service’s viewers. Movistar now has some big swings indeed in preparation for late 2019 and 2020: Its very first Original Movie, Alejandro Amenábar’s historical drama-thriller “While at War,” and Amenábar’s first TV series, turning on the legal battle for the $500 million treasure carried by frigate Nuestra Señora de las Mercedes, sunk in 1804; the anti-terrorist police drama-thriller“La Unidad,” set in Melilla; Mariano Barroso’s “La Línea Invisible,” about the build up to ETA’s first assassination in 1968.

Movistar is obliged by regulation to offer its premium content to its rivals Orange and Vodafone. But it can keep its Original Series to itself. “Some Movistar series, like ‘The Pier’ and ‘Arde Madrid,’ have been highly successful. Having something that is unique, content that people want to watch, helps them stay on the platform, and is critical,” said Rua Aguete.

“People also associate Telefonica not with a boring telecom but a big content producer, almost like  a Hollywood studio, and that attracts all segments of the Spanish population,” she added.

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