Spain's market is thriving, but piracy is taking its toll

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CANNES -- The Spanish film industry has cause to celebrate: The domestic share of boxoffice earnings jumped to some 19% this year -- up from 13% last year -- thanks to a few standouts; the government has finally enacted the Film Law; and Spain's broadcasters are throwing their considerable weight behind juicy projects.

Not only that, but two of Spain's most international directors -- Pedro Almodovar and Alejandro Amenabar -- have hot projects in production.

Alex de la Iglesia's English-language whodunit "The Oxford Murders," Miguel Bardem's comic-based "Mortadelo and Filemon: Mission -- Save the Planet" and Frederic Forestier and Thomas Langmann's "Asterix at the Olympic Games" -- which boasts Spanish pedigree thanks to Madrid-based TriPictures' 10% stake in the French production -- have buoyed Spain's quota of the domestic market.

Add to that the fact that Woody Allen has signed on for two more projects with Barcelona-based production house Mediapro and Spanish horror films like Filmax's "REC" are enjoying success internationally and it would seem the industry is booming.

But not all is roses.

While Spain is certainly not the only European country with a vibrant black market, it was responsible for 18% of the illegal downloads worldwide of the top 10 most popular films in 2007, according to Spanish Producers' Rights Management entity EGEDA.

"Pirating is a huge problem, and it's causing damage for many companies. But it is the tip of the iceberg of a radical change in the business model. When there are changes in business models, it causes abnormalities like theft over the Internet," explains Adolfo Blanco of publicly listed content provider Vertice 360.

Elsewhere, Spain's television broadcasters have become the driving force behind ambitious film projects.

Spain's legislation requires broadcasters to invest 5% of revenue in film production, accounting for $152 million of local production investment in 2006. As advertising revenue grows, so does broadcasters' investment in the domestic production pipeline.

Following the success of last year's Cannes entry "The Orphanage" and Agustin Diaz Yanes' "Alatriste," private TV operators Telecinco, Antena 3 and La Sexta's parent company, Mediapro, have added handsome projects to their slates.

Spanish films that debuted at the recent Malaga Spanish Film Festival -- Antena 3's comedy "Chef's Special" and Telecinco's Basque terrorism drama "We're All Invited" -- are examples of the boxoffice-friendly fare broadcasters are backing.

But then there are also heavyweight films: Woody Allen's "Vicky Cristina Barcelona," starring Penelope Cruz, Javier Bardem and Scarlett Johansson and produced by Mediapro; Telecinco's co-production of Steven Soderbergh's upcoming duo "The Argentine" and "Guerrilla"; and Telecinco is throwing its weight behind Amenabar's much-anticipated "Agora."

But rumor has it that a new trend may be afoot.

According to the Spanish Producers Federation (FAPAE), the recently passed Film Law, which provides fiscal incentives for private investors in the domestic industry, has ushered in a new wave of financing. Banks like Santander or BBVA are reportedly looking to take equity stakes in productions to cash in on the 18% tax breaks promised under the new legislation.

"These incentives for film and television production, which encompass films and television series, could be the key to creating a real film industry in Spain," FAPAE president Pedro Perez says.


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