Analyst: Spain to Top 20 Million OTT Video Subs by Next Year — Driven by Netflix

Spain is quietly emerging as a major market for over-the-top video distribution, driven by Netflix, HBO España and Amazon Studios. New data from eMarketer suggests the country will top 20 million OTT subs next year — or about 40.1% of the country’s population.

Indeed, Netflix began producing original content in Spain in 2016 and opened its first European production hub in Madrid in spring of 2019. A trend replicated by ViacomCBS and Spain-based broadcaster Astresmedia and telecom giants Orange and Telefónica — the latter via its streaming video service Movistar.

Though Netflix will boast the largest user base in Spain, its 70% market share of subscription OTT video subs is actually lower than in other major markets. In Germany, Netflix claims 77.1% of the SVOD market, and 80% in Denmark, France, and the U.K. The report suggests a wider variety of SVOD services in Spain undermines Netflix’s domination.

“[Subscriber] growth should slow down in H2 2020, so Netflix must continue to work hard and fend off competition from emerging platforms like Disney+, HBO Max, and even Amazon Prime Video,” Matteo Ceurvels, eMarketer research analyst covering Latin America and Spain at Insider Intelligence, said in a statement. “Though competition abounds, we still view the subscription OTT landscape as a story of ‘Netflix versus the rest.'”

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AMC Networks Bows First International VOD Access in Spain

“AMC Selekt,” AMC Networks’ upstart video-on-demand service, launched its first international operations in Spain.

The service will be added to France’s Orange TV at no additional cost. As a result of this first-time agreement, Orange TV platform subscribers can watch more than 5,000 programs throughout the year, in a wide variety of genres including films, series, documentaries, lifestyle, children’s content and music.

AMC Selekt content ranges from AMC Networks, Canal Hollywood, SundanceTV, Dark, XTRM, Odisea, Canal Cocina, Canal Decasa, Canal Panda and Sol Música.

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“AMC Selekt … is the largest channel network library available in Spain and, more importantly, the most diverse,” Manuel Balsera, EVP and managing director of AMCNISE, said in a statement. “We are delighted that AMC Selekt is debuting with Orange TV, which is one of our main distribution partners in the market.”

Subscribers will have access to series such as “Dispatches from Elsewhere,” “Das Boot,” “Wisting,” “Bordertown” and “This Close,” among others. Movies include The Lord of the Rings: The Return of the King, Meet the Parents, Super 8 and The Addams Family; and documentaries on technology, nature and current events such as “The Harvey Weinstein Scandal,” “A Samurai at the Vatican” and “Antarctic Expedition.”

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In-house productions include culinary programs “Let’s Taste the World” and “Julius’ 22 Minutes,” home decoration and fashion shows “A Touch of Chus” and “Customize Your House”. The offer also includes music concerts by Vetusta Morla, Alice Wonder and Nunatak and children’s content such as “Masha and the Bear” and “Panda Kitchen.”

Vodafone Objects to Disney+ Telefónica Pact

The day after Spain’s telecom giant Telefónica and Disney announced an exclusive distribution deal for subscription streaming video service Disney+ through the former’s Movistar subsidiary, U.K.-based mobile carrier Vodafone is crying foul.

Disney+ streaming service is set to launch in select European countries on March 24.

Spanish daily El Espanol reports Vodafone sent a letter to the National Commission of Markets and Competition (CNMC) alleging the Disney/Telefónica deal amounts to “covert exclusivity” creating obstacles in its separate negotiation with Disney. An agreement Vodafone said “seemed closed” a few weeks ago.

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For Vodafone, which has seen its market share in Spain drop from 33% to less than 20% last year, according to Statista, securing a Disney+ distribution deal is key.

Vodafone claims the Telefónica and Disney deal “goes against its position as a dominant operator” and makes it difficult for other operators, including France’s Orange, to access Disney content within the legal framework established by the CNMC.

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Specifically, the government established regulation aimed at preventing companies with majority market share from using their clout to prevent competitors from negotiating for third-party content such as sports, movies and TV shows.

Vodafone cited similar government action when Movistar attempted shut out competitors securing exclusive rights to La Liga soccer, a move nixed by regulators.

Vodafone, according to El Espanol, contends that if CNMC does not intercede in the Disney+ agreement, “it would be accepting a fraud in the spirit of the [regulations].”

 

Telefónica to Distribute Disney+ Streaming Service in Spain

Ahead of its March 24 launch in Europe, Disney+ has inked distribution in Spain with multiplatform operator Telefónica. The Spanish distributor’s Movistar subsidiary and over-the-top video platform Movistar+ will distribute Disney+ in the region.

Disney’s branded subscription streaming video platform, which launched Nov. 12, 2019, in the United States, has more than 26 million subscribers. The service was initially set to launch across parts of Europe on March 31. That date was moved up a week across the U.K., Ireland, France, Germany, Italy, Spain, Austria, and Switzerland.

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The service, which offers Disney, Pixar, Marvel, Star Wars, National Geographic, in addition to original content, features more than 25 exclusives, 500 movies and 300 series.

We’re delighted to have Telefónica on board for the launch of Disney+,” Jan Koeppen, president, The Walt Disney Company EMEA, said in a statement. “This marks an exciting new era of entertainment featuring premium content across our portfolio of brands, and we can’t wait for Movistar customers to experience it.”

Movistar, which is Spain’s largest telecom with more than 22 million subscribers, last year inked a partnership with Netflix.

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Spain Lawmakers Seeking 8% Tax on Foreign OTT Video Services

Lawmakers in Spain are looking to impose an 8% tax on over-the-top video services operating in the country, including Netflix, HBO, Amazon Prime Video, Sky Now and DAZN.

The so-called RTVE (Radio Television Espanola) tax is aimed at funding Spain’s ad-free public broadcaster, which has been undermined in recent years by plummeting advertising sales among commercial broadcasters, who contribute about 1.5% of their revenue to RTVE’s budget.

The proposed tax is incorporated in the Audiovisual Media Services Directive, which aims to level the playing among broadcasters such as Atresmedia and Mediaset, pay-TV operators/telecoms (Movistar, Telefónica España, Orange and Vodafone) and now OTT video.

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The updated law would impose a 5% tariff on in-state SVOD revenue earmarked toward domestic film production, and another 3% directed toward RTVE.

According to Spanish media site El Español, the tax would apply to revenue generated by an OTT service’s Spanish subscribers. As a result, HBO would be charged a percentage of the revenue generated by its 475,000 Spanish subs, instead of the company’s reported revenue based on the location of its tax-incentivized fiscal headquarters.

The tax  could become law by the end of the year.

Separately, local and national governments worldwide continue to search for ways to tap into the lucrative OTT landscape — with varying degrees of success.

Georgia lawmakers in February backed away from imposing a 4% tax on subscription streaming video services. The tax is still on the table for music services, video games and e-books.

“People didn’t like what has become known as the Netflix tax, so we took that off,” Rep. Bill Werkheiser told the media. “The effort initially was to help fund broadband. It won’t do that without the Netflix or streaming services tax.”

Netflix Spain Raises Prices

Netflix is continuing to roll out price hikes across Western Europe with Spain reportedly the latest country to see a €2 monthly increase to €12.99 ($14.80) from €10.99 ($12.52).

Netflix previously raised prices in Germany, Austria and Switzerland.

Netflix Spain also upped the fee for Ultra-HD on up to four devices to €15.99 ($18.22) from €13.99 ($15.94). The basic plan remains unchanged at €7.99 ($9.11) per month.

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Netflix in January raised by $2 its most-popular plan in the U.S. to $12.99 from $10.99. The basic $7.99 non-HD plan increased to $8.99, while the premium plan allowing four simultaneous 4K streams increase to $15.99 per month from $13.99.

Comcast Cuts Spain’s Llega Sky SVOD Pricing 31%

Llega Sky, the British satellite operator’s nascent streaming video service in Spain, is cutting the monthly subscription price 31% to €6.99 from €9.99.

Launched in September 2017, Llega Sky offered TV series and on-demand movies from around the world in Spanish, predominantly in HD.

Despite including 12 popular pay TV channels, combined with access to TV shows “The Walking Dead,” “Big Bang Theory” and Grey’s Anatomy,” and hundreds of movies, the service has struggled to resonate with consumers.

Llega Sky reportedly has generated just 114,000 paying subscribers – significantly behind market leader Netflix with 2 million, HBO (475,000) and Rakuten (147,000).

The move follows Hulu’s decision in the United States to reduce the basic subscription plan (with advertising) to $5.99 from $7.99. The SVOD service recently disclosed it had topped 25 million subscribers, which includes online TV platform, Hulu with Live TV.

Sky’s corporate parent Comcast last week revealed it plans to expand over-the-top video platform Now TV platform across Europe.

Now TV offers monthly entertainment packages targeting movies (Sky Cinema), general entertainment, Premier League soccer (Sky Sports), children’s programming (Sky Kids) and reality TV-based Hayu – which is owned by NBC Universal and available in the U.K., Ireland, Australia, Denmark, Sweden, Norway, Finland, Canada, Holland, Belgium and Luxembourg.

 

 

 

Acorn TV Bows Service in Spain

AMC Networks’ British-themed subscription streaming video service Acorn TV is launching operations in Spain.

Acorn TV, which is part of home entertainment distributor RLJ Entertainment that AMC owns a majority stake in, last December announced plans to launch service in Australia, New Zealand, India, South Africa, 10 European countries, South America, as well as Caribbean countries.

Consumers can go to acorn.tv to subscribe or access the service via apps on Apple TV, Android, iPhone, iPads, and Roku streaming players. The programs will be in English-language with English and Spanish subtitles available. The Acorn TV streaming service is available for €4.99 per month.

“Streaming is booming in Spain with 74% of users watching TV content through the Internet, placing Spain as the largest streaming penetration country in the world – even ahead of USA”, Miguel Penella, CEO of RLJ Entertainment, said in a statement.

 

Netflix Establishes Content Production Hub in Madrid

Seeking to better coordinate original content production in Europe, Netflix July 24 announced the establishment of its first production hub in Madrid.

The hub will be located at Ciudad de la Tele (TV City), a new campus in Tres Cantos, Madrid, being developed and managed by Grupo Secuoya, an audiovisual production services company.

The hub will be a central facility for Netflix’s growing slate of Spanish-language original content over the coming years, including new and existing titles produced by Netflix, as well as series and films made by production partners for Netflix.

As part of the multi-year partnership, Grupo Secuoya will provide facility management and other services to Netflix, including being the exclusive production services partner for projects based at the Ciudad de la Tele campus. Netflix will take occupancy of three sound stages beginning in September, with the option to occupy additional space as construction completes.

“Spain has a rich heritage of innovative, immersive content creation and we are excited to strengthen our investment in the cultural heartland of Madrid,” Erik Barmack, VP of international originals at Netflix, said in a statement.

Creation of the production hub reflects Netflix’s deepening investment in Spain, with over 13,000 cast, crew and extras working on 20 Netflix original productions across the country this year.

Spanish titles coming soon to Netflix include season 3 of “Las Chicas del Cable” on Sept. 7th and Élite, a young adult drama coming soon, with titles currently in production, including Isabel Coixet’s new original film Elisa & Marcela and The Alcásser Murders, a new original documentary series.

Netflix recently announced an overall deal with Álex Pina, creator of “La Casa de Papel” (Money Heist), the most watched non-English language show on Netflix. Netflix is also investing significantly in licensed and co-produced titles created by Spanish broadcasters and producers. This includes a recent agreement for first-option access to drama series from Atresmedia, with “Fariña” and “La Catedral del Mar,” among the upcoming titles launching on Netflix globally.

“Netflix sets a world-class standard in its production process and the decision to create a production hub in Madrid is proof of Spain’s leadership in the audiovisual industry, as well as the depth of its talent pool,” said Raúl Berdonés, president of Grupo Secuoya.

“We very much welcome Netflix’s decision to establish its first European production hub in our country,” added María Peña, CEO of ICEX, the Spanish government agency for trade and investment promotion. “We are sure this project will contribute strongly to positioning Spain as a competitive location for the global entertainment industry. In that respect, it will be entitled to our full support.”

FilmStruck Bows Service in France and Spain

FilmStruck, the online movie subscription streaming service owned by WarnerMedia, has launched operations in France and Spain.

The subscription video on-demand service, which entered the international marketplace with its U.K. launch in February, offers French and Spanish consumers a diverse movie catalogue from the Warner Bros. library and the Criterion Collection library, as well as other global and local content partners.

The service offers a range of critically acclaimed movies across many categories – independent, classic, cult, contemporary and world Cinema – and also features curated themes and exclusive bonus material, including cast interviews, original artwork, Criterion mini-documentaries and hosted introductions.

With a strong emphasis on catering to different audiences with local content, FilmStruck content for each market reflects local curation expertise. The service for France will draw on local content partners Carlotta Films, MK2, RKO and StudioCanal, while the service for Spain will team with local content providers Wanda, Caramel and A Contracorriente Films, among others.

“Rolling FilmStruck out to these additional markets is a significant next step for us,” Aksel van der Wal, EVP, Turner International’s Digital Ventures & Innovation Group, said in a statement. “France and Spain both have a rich heritage in and love for movies, as well as being rapidly developing SVOD markets, which makes them both exciting markets to tap into with what we believe is a fresh and differentiated offering working with fantastic content partners.”

The expansion of the service into France and Spain comes shortly after DV&I and WBDN announced the appointment of Kerensa Samanidis to the role of GM, FilmStruck, International. Samanidis joins from the British Film Institute where she was head of digital products and distribution overseeing BFI’s digital strategy.