Top investors like Netflix, Amazon expand Spanish entertainment business – Variety

In April 2018, Netflix announced that Spanish heist thriller “Money Heist” (“La Casa de Papel”) had become the most-watched non-English series of all time on the US streaming service.

As a Spanish-language series transformed global entertainment by becoming the company’s first foreign-language blockbuster, the expansion in Spain — long fostered by hits like “The Red Band Society,” “Grand Hotel” and “Clockdown” — —Very realistic liftoff.

Building on this success, Spanish Prime Minister Pedro Sanchez unveiled plans for the AVS hub in March 2021, which will invest €1.6 billion ($1.8 billion) in Spain’s audiovisual industry.

For a country that uses the term españolada to offset so-called second-rate local fare, repositioning Spain’s film and television industry as a central driver of its post-digital pandemic “reindustrialization” is almost a revolution. Spain, the Cannes Marché du Film’s country of honor in 2023, now has 7 of Netflix’s 20 most-watched non-English-language movies and TV shows of all time, more than any other country, including South Korea (with 4), France (there are two) and Germany (two).

As Spain progresses through the third year of its 2021-25 AVS hub programme, a big question is how its entertainment sector can maintain its momentum.

Some of the growth drivers of the past will continue to play out in the future.

Erik Barmack, Netflix’s former vice president of international originals, said: “If you put together the Romance-speaking countries that basically understand the structure of Spanish, you get closer to a billion people, twice the size of the English-language market. Times.” came out with “Money Heist” and “Elite,” and he just picked up his fourth Spanish novel, “Red Diamond,” for a film adaptation.

In contrast, Spain has been the biggest beneficiary of Europe’s global streaming investment, accounting for 37% of the total investment in original European content among the top 10 countries by 2021. According to the European Audiovisual Observatory’s analysis of Ampere Analysis data, the UK is at 18%, Italy at 16%, France at 12%, and Germany at 8%.

With online video subscription revenue in Spain set to grow from $1.8 billion in 2022 to $2.8 billion in 2027, investment doesn’t appear to be coming to a sudden halt, according to estimates from research film Omdia.

New growth drivers are now joining the mix. The budget of Spain’s ICAA national film agency is set to increase significantly to more than 100 million euros ($109 million) in 2023.

In Catalonia, the total audiovisual funding allocated by film and television agency ICEC rose from 12.6 million euros ($14 million) in 2019 to more than 41 million euros ($45.5 million) this year.

Domestic box office and overseas sales were driven by local filmmakers such as genre directors Alberto Rodriguez and Rodrigo Sorogoyen, whose Beast won the best prize at the 2023 César Film Festival in France. Best Foreign Language Film Award. There are also filmmakers who have rooted in universal issues in films with a strong sense of place, such as Carla Simon (Alcaraz, winner of the Golden Bear Berlin 2022) and Estibaliz Uresola (20,000 Species). bee”).

On January 1, Spain launched the world’s most competitive production tax break, which also created new impetus. Here, like Spain’s most commercialized export of independent film proposals, Spain’s growth may have been due to, not despite, streamers withdrawing 100% ownership and more cautious investments.

“In Berlin, independent film and television are more alive than ever,” says producer Adrián Guerra (Through My Window). “The space left by platforms is being taken up by independent divisions, more co-productions, more frequent territorial pre-sales and multiple sources of financing.”

“Money Heist,” “Grand Hotel,” “Velvet,” and “Cable Girls” “all delivered stellar production values ​​on a tenth of the U.S. budget, creating fantastical worlds on a fixed number of stages,” says Barmack . “The rest of the world is going to have to do a good job of that because budgets are falling and Spain has very good technical people.”

Government intervention is one thing. However, it needs to be combined with strong market forces and the artistic ambitions of a new generation to truly reshape an industry.

This seems to be happening in animation and video games in Spain.

According to “Who Is Who: Animation 2022” published by ICEX Spain Trade and Investment, Spain produced 25 animations in 2018-21. At the press conference of the Malaga Film Festival in March, animation association Diboos presented 40 Spanish films that will be released in 2023 or are in production. One of them is Juan Jesús García Galocha’s “The Mummy,” which has grossed $52 million worldwide.

“Spain is now more competitive, with tax breaks for animation, which has given a big boost to the big studios’ interest in collaborating. Creative Spanish talent,” says Rodrigo Blaas, writer-director-producer at El Guiri Estudios in Madrid. Now very interested in animation, mixing handcraft and technology, his short film “The Sith” is part of “Star Wars: Vision” Season 2 on Disney+.

Besides online video subscriptions and advertising, the biggest driver of revenue growth in Spain is likely to be games. The industry has grown from 490 active studios in 2017 to 755 by 2021, according to analysts. Spain’s gaming industry now looks set to grow further, reaching $2 billion in 2027, up from $1.4 billion in 2022, according to Omdia.

The industry has been hit hard recently. Seville’s Gaming Kitchen is preparing a 2019 sequel to “Blasphemous,” a fighting game that reached 1 million players by 2021 and will be released this year.

The industry is also highly dependent on exports. The US is the largest market for Valencia’s Chibig, says founder Abraham Cózar.

Chibig is behind games like Summer in Mara.

Emanuele Crialese, technical secretary of trade association DEV, believes that in order to grow more, independent Spanish businesses need tax breaks to drive private investment, allowing them to retain intellectual property.

The Spanish advertising industry trailed Cannes Lions winners in 2016, 2017, 2018 and 2021, with a turnover of 526.5 million euros ($584.4 million) in 2021, up from 320 million euros ($355.2 million) in 2015. Dollar).

Adriana Piquet, general manager of Spanish advertising production company Assn, said that brands can spend less money, but with YouTube and streaming media, channel and production costs have increased exponentially.

Forecasts for online video advertising in Spain predict revenues will nearly double from 2022-27 to more than $2.25 billion, a strong underlying growth driver.

These parameters explain the optimism of analysts, the Spanish government and producers towards Spain.

All in all, “Spain is the EU country with the best forecast for content growth, with revenues set to grow by 5.7 percent between 2021-25 and investment by 7.2 percent over the same period,” said María González Veracruz, Spain’s secretary of state for telecommunications and digital infrastructure, in Malaga The October 2022 report of the Spanish-American Chamber of Commerce was cited in the presentation at the AVS Center in Spain.

This is a new dawn for content creation in Spain.