HBO Executive-Turned-Ambassador on Piracy in Spain, Attracting Hollywood Shoots (Q&A)

Courtesy of US Embassy
James Costos

"Spain needs to do more" to protect intellectual property, says James Costos during the San Sebastian Film Festival and discusses Netflix's upcoming launch in the country.

When former HBO executive James Costos was appointed U.S. Ambassador to Spain, many took it as a sign that the U.S. wanted to get tough on Spain’s unbridled piracy problem.

But few could have expected just how energetically Costos has campaigned for the film and TV sectors, paving the way for shoots for the likes of Game of Thrones and the next installment of the Bourne franchise.

As Spain’s A-list film festival rolls in San Sebastian through the weekend, The Hollywood Reporter’s Pamela Rolfe spoke to the ambassador about how Spain is attacking piracy, juicy incentives for foreign shoots in Spain’s Canary Islands and Netflix’s October launch in the country.

You were instrumental in attracting Game of Thrones to shoot in Spain and have been a big proponent of foreign shoots in Spain. Tell us about some of the initiatives you’ve spearheaded, such as the trip of Canary Island producers to L.A. and why you did it.

As ambassador, I am focused on expanding bilateral trade and investment between the United States and Spain. In my opinion, there is a lot of potential to increase ties between the entertainment industries of our two countries. The Canary Islands offer special incentives to companies looking at potential filming locations, so it was only logical for me to help the local government make connections with major U.S. film studios like Universal, Fox, Sony, Disney, Paramount, Time Warner, 21st Century Fox, CBS, Viacom, Comcast, HBO, Netflix, Warner Brothers etc. 

I set up meetings for them this past summer where former president Rivero and his team could give their presentation on the unique advantages offered by the Canaries. The Canaries have, of course, been very successful in attracting major projects from top talent, such as Exodus, involving Peter Chernin and Ron Howard, who also shot In the Heart of the Sea there recently. 

One direct result of this outreach Universal’s decision to film part of the next edition of the highly popular Jason Bourne film series on the islands. We continue to see other expressions of interest in Spain from people such as Chuck Rovin and Harvey Weinstein, while Mike Medavoy is currently shooting The Promise in Madrid.

What would you highlight as the key aspects of Spain’s new legislation designed to attract foreign shoots?

Coming from the industry and maintaining contacts with producers and directors, I am very well aware that costs associated with movie production are a major factor in determining where films get made. Spain has a lot to offer in terms of skilled local professionals, great locations, good weather etc. 

The new tax incentives are a positive development, but Spain faces stiff competition from other countries that are more aggressive in attracting film companies. The Canaries a[are] one of the regions where the local incentive package is more robust than in other parts of Spain. This may be a homegrown model for how the country might improve its appeal for attracting film production.

When you were named ambassador, everyone took it as a sign that the U.S. wants Spain to get tough on piracy. Did you see it as such and has its been read that way in Spain?

The U.S. has long held the position that Spain needs to do more to combat piracy. That’s an issue that not just predates my nomination, but the nomination of my predecessor and his predecessor as well. One of the roles of a U.S. ambassador – anywhere in the world – is to promote bilateral trade and investment. While it’s true that we advocate for strong intellectual property rights (IPR) regimes worldwide in order to protect U.S. content industries, we also do so because weak protections are a negative when it comes to attracting U.S. investment abroad. 

The lack of effective IPR protections and enforcement mechanisms in Spain costs both Spanish and multinational companies millions of dollars a year and clearly hampers investment. So both countries have an interest in seeking these protections strengthened.

Spain recently passed new anti-piracy legislation that includes the so-called Google Tax. How effective do you expect it to be and what do you see as the strengths and weaknesses of the legislation?

Over the past year, Spanish policymakers have developed an important set of reforms to the Intellectual Property Law, Criminal Code, and Civil Procedure Law, passing the Civil Procedure Law and the IPR reform act last October and updating the Penal Code with important IPR elements in March. However, a recent independent study showed that piracy rates in Spain continue to climb. The study reveals that 88 percent of cultural content consumed online last year was pirated, up from 84 percent in 2013. This is a serious concern for us, and it should be a concern for Spain, given the negative impact of piracy on creativity and jobs.

So clearly, Spain needs to do more. The Intellectual Property Commission needs to make effective use of the new tools the parliament has placed at its disposal. We would be encouraged to see the IP Commission become as proactive and effective as the Competition Commission (Comision Nacional de los Mercados y la Competencia, or CNMC) in addressing IP infringement, just as the CNMC is going after non-competitive business practices. The IP Commission must use its new resources and legal options to more efficiently pursue abusers. If the Commission’s process is so lengthy that users lose interest in pirated content before it acts, the Commission ceases to be an effective actor in protection of intellectual property rights. In the case of IP violations and infringement, justice delayed is justice denied.

We are encouraged to see Spanish courts act against web sites carrying pirated content, such as in the recent judgment against Pirate Bay. With improved deterrents of stronger penalties and new civil proceeding options, we would welcome the courts’ more active role in improving IPR protections. We hope law enforcement agencies also make full, efficient use of these new tools to go after abusers. 

What other measures are necessary to fight piracy in Spain and do you know of any upcoming moves in that arena?

In addition to legal reforms, efforts to improve public awareness of the importance of IP protection and increase access to legal content could improve the situation, as they have in the United States. The public service announcement and debate forum launched last year by Atresmedia is an important example of this kind of work, and I understand that this initiative will continue in the coming year.

Netflix is set to launch in Spain in October. What challenges can the company expect that are unique to Spain or indicative of Europe as a whole?

The primary challenge is going to be the on-demand content services offered at competitive prices by domestic providers, both in Spain and throughout Europe. That said, Netflix offers a unique product, particularly in its distinctly American original series, which I think European customers will find very attractive.  

I know from my contact with the Spanish government as well as those in the audiovisual industry that Netflix’s arrival is eagerly anticipated. By providing easy access at low cost to a wide variety of productions, Netflix should also help move consumption to the legal content it provides and potentially reduce piracy. In polls we understand that many who download illegally do so because content is not otherwise available, or is difficult to attain, and Netflix’s arrival would change that.

What do you see as the strengths of the Spanish audiovisual industry?

Top-notch local professionals, diverse film locations, a relatively attractive tax regime, and good weather.

What opportunities do you see here for American entertainment companies beyond shooting on location in Spain?

It might sound cliched, but I honestly think the talent in this country is enormous. I would say that the sky is the limit in terms of creative collaboration.

U.S. executives generally have a limited number of Spanish companies or names on their radar. What are some of the surprises you’ve found since you moved to Spain?

I think that’s true, and that’s why it’s important for initiatives like Marca Espana to promote Brand Spain all over the world. I’m constantly astounded by the many gems that are seemingly undiscovered here in an array of industries. From textile producers to restaurateurs to tech entrepreneurs, this country is bubbling over with opportunity. 

The reality is, largely because of the isolation Spain experienced during the Franco era, the country remains largely undiscovered by Americans apart from a few places, such as Madrid, Barcelona and the islands. Because many American don’t automatically think of Spain when they consider a European vacation, we are often surprised by the quality of goods, services and experiences the country has to offer. For example, most Americans wouldn’t know that 5 of the 10 largest construction companies in the world are Spanish.  

Do you watch Spanish TV and, if so, what is your favorite show?

I don’t have much time to watch any kind of TV these days!

What would you say makes the San Sebastian film festival different from other events on the busy international festival circuit?

To name the obvious, there are few places in the world that can compete with San Sebastian’s beautiful landscape, fantastic food and welcoming people. I can’t think of a better place to attend an international film festival.

Spanish business customs differ remarkably from those in the U.S. Which ones would you like to see more of in U.S. business relations?

The Spanish appreciate the value of a good meal to facilitating a business relationship. While that is true in the United States, it’s not quite the gospel that it is here. And I think it should be, particularly when Spanish wine is involved! In Spain, the importance of personal relationships in conducting business also remains key, something we can perhaps learn from in our often frenetic approach to making deals.

Do you have any updated data on how Game of Thrones' being shot in Spain affected summer tourism for the local economies?

The U.S. Embassy does not independently track that data, so I can only refer to what local officials have cited as an enormous impact on the local economies. I recently read that Andalusian officials are reporting 40 percent more visitors to Game of Thrones filming locations compared to last summer, while the number of searches for flights to Seville originating abroad rose 107 percent. 

This should surprise no one. We have long known that tourism often enjoys an enormous direct benefit from filming. All over the world, we’ve seen travelers flock to the locations of popular films and TV series, and this brings in revenue to hotels, restaurants, tour and transport companies etc.