Spanish Exhibitors Call on Netflix to "Adapt" to Traditional Windows System

How Far Can Roma Go in the Oscars Foreign-Language Race - H 2018
Courtesy of Netflix

The comments came during a presentation in Madrid of year-end exhibition sector figures and a survey of VOD habits in Spain.

Representatives for the Spanish exhibitors’ group FECE have called on Netflix to conform to the traditional windows system and suggested competition from other companies like Disney could reinforce the value of that system.

“The current business model in the entire world is that there are exploitation windows for films that are exploited one by one and, as such, maximize the value of each of those windows,” FECE vp and Yelmo Cines’ Country Manager Fernando Evole said Wednesday in Madrid at a presentation of year-end sector figures and a survey of VOD habits among Spanish consumers.

“The position of exhibitors, not just in Spain but in the whole world, is that we would be delighted if Netflix understood that opportunity and adapted to the business model currently working for many companies," said Evole. "We would be delighted if a company like Netflix, which is investing heavily in content, saw the opportunity to adapt and to maximize the value of its films.”

Evole mentioned the case of Roma, which he said was a film that “would possibly have been a bigger box office success and would have had more value in posterior windows” if it "had had a maximized exploitation in all of its windows.” He added: "That didn’t happen, but we hope the position of Netflix in the future can change. And, moreover, I think it’s very good for the sector that companies like Disney, Warner and Universal are betting on digital platforms because that competition will lead to a new form of working that maximizes the value of windows.”

Spain does not have a legally mandated exclusive theatrical window. The country’s average theatrical window of three months and three weeks matches Italy’s, but falls behind Germany, France and the U.K.'s, according to the FECE report.

FECE on Wednesday offered rare data on Spaniards’ streaming habits. In a survey of nearly 134,000 people, FECE reported that people under 25, who use VOD services and go to the cinema with more frequency than all other age groups in Spain, watch mostly series on VOD platforms — 48 percent, versus 7 percent for films.

The percentage of people using VOD platforms in Spain declines as age increases, according to the survey, with people in the over-50 age group the least likely to use VOD services — 46 percent, versus a whopping 80 percent for the under-25s. The over-50s watch more films on VOD platforms than any other group (17 percent, versus 38 percent for series). The 26-50 age groups go to the cinema the least.

Despite this increasing competition from streaming services and a continuing but slowing trend of cinemas shutting down, the sector saw only a 2 percent drop in global ticket sales last year and sat as Europe’s third top market for admissions per capita, FECE reported.

In ticket sales, Spain (97.7 million) trailed France (200.5 million), the U.K. (177 million) and Germany (105.4 million), according to the report. But allowing for population size, this represented 2.1 tickets per capita, the third-highest in Europe behind France (3.2) and the U.K. (2.7).

“Theater attendance is driven by two attraction points: children’s films, where parents play a big role, and event films or films for adolescents,” noted FECE president Juan Ramon Gomez Fabra.

Last year’s top-grossing movie, contributing to Spain’s global €585.7 million ($656.2 million) box office, was Jurassic World: The Fallen Kingdom (€24.22 million, or $27.12 million), directed by Spaniard J.A. Bayona. The top-grossing local film was Champions, whose €19.09 million ($21.4 million) helped bring the market share for local films up to 17.5 percent, still the lowest of the top five European markets and less than half that of German and British films in their home markets.

The Spanish sector was helped by a government lowering of the country’s sky-high sales tax on movie tickets in July 2018, from 21 percent to 10 percent. The average cost of a movie ticket in Spain, at €5.99 ($6.71), is significantly lower than the other top European markets. There has also been a notable investment — €230 million ($257.7 million), according to FECE — in the digitalization of theaters in Spain.