Spain Moves to Address Rights Ownership in Rules of Engagement with Streamers

The Head
Courtesy of The Mediapro Studio

The horse has not left the stable. This summer, Spain’s government unveiled a crucial draft Audiovisual Communication Services Law aimed at implementing an E.U. directive which in Spain’s case will oblige streaming services to invest in Spanish content.

The bill established a quota obligation at 3.5% of global platforms’ annual revenues – which pales in comparison with France, of course, where OTT players – Netflix, Amaxon, Apple TV – are required from this year to invest 20%- 25% of yearly turnover.

That 3.5% figure was written in stone, some industry sources said as Spain’s TV industry gathered in Pamplona for the 5th Conecta Fiction, a co-production forum between Spain and Latin America.

But Spain’s version of the E.U. Audiovisual Media Services Directive will most certainly evolve, José Nevado, managing director of PATE, Spain’s most powerful producers union, said in Pamplona after a panel on Tuesday morning tackling European Fiction Content – the New Framework for European Fiction: Spain.

For one thing, the draft law which will be tabled before Spain’s Council of Ministers, perhaps as early as Sept. 21, will contain a clause that addresses the thorniest of questions for Europe’s independent producers: Rights ownership.

In line with French regulation, draft regulation will introduce a clause stipulating that for a significant percentage of TV series co-financed by platforms, rights should revert to independent producers after a 36 months license for joint exploitation with OTT players, Nevado said.

There will be series that are just too big for all but the most moneyed of independent producers to take the risk of co-financing. Alejandro Amenábar’s “La Fortuna,” financed by Movistar Plus and AMC Studios, looks like a case in point. There are companies in Spain which have pockets deep enough to invest in high-end series and retain IP, such as The Mediapro Studio on “The Head.”

Platforms will be permitted, however, to 100% finance a number of high-end drama series with producers working for hire, paid by a fee calculated as a fixed percentage of the series’ budget, currently around 7%-10% of budgets.

PATE is also pressing for the quota investment to be raised from 3.5% to 5% of annual revenues.

The mixed business model supported by PATE has been influenced by the French ownership of top production houses in Spain.

Last November, Mediawan, for example, moved to create Mediawan Studios España, a production center made up of ITS Spanish companies: Grupo Boomerang TV and production houses Good Mood and Weekend Studio. Such large companies are looking to build asset value by companies’ accumulation of IP.

Spain’s transposition still raises large issues. “U.S. copyright law sees [series production] much more as a market affair than as something that needs protecting, so we need to strike a right balance at a legal level, and in the industry as well,” said Ecija’s Juan Salmerón, who chaired the Conecta Fiction panel.

“We are seeing contracts in which any problems have to be resolved in the courts of Los Angeles, for example. Scriptwriters say they have no power or authority over prequels,” said Fabia Buenaventura, head of the audiovisual division at Spain’s SGAE, a rights body representing 11,000 directors, scriptwriters, translators, adaptors and composors.

Whether platforms will be prepared to pay top dollar on series with three-year rights reversion is another question.

But a mixed model will allow producers to earn income working for hire which they can then invest in series to which they retain rights.

After passing through Spain’s Council of Ministers, the draft bill needs approval by the country’s parliament, both its lower house and its senate.

The aim is to get the new legislation on the statute books before December. But even the transposition of the AVMS Directive remains part of a larger picture.

“For the first time, a Spanish government has really put film and TV on its agenda,” said Nevado, referring to prime minister Pedro Sánchez’s announcement of a €1.6 billion ($1.9 billion) Spain AVS Hub plan to power up Spanish production by 30%.

We should be thinking ahead not just to next Monday but a long term future.”