Telefonica Studios' Axel Kuschevatzky on Brand Strategy (Q&A)

Axel Kuschevatzky

Riding high on a wave of recent successes like "Thesis on a Homicide," "Corazon de Leon" and "Foosball," the group's chief is looking to move the company from low profile investor to heavyweight player.

Spanish telecom Telefonica recently announced it will cluster all its projects under the umbrella of Telefonica Studios to strengthen the group's brand and feed its Movistar TV service with original programming. Axel Kuschevatzky -- who steered Argentina's Telefonica-owned, free-to-air channel Telefe to blue-chip product like the Oscar-winning The Secret in Her Eyes and Argentina's present bid for the foreign language honor Wakolda and The German Doctor -- is heading the new venture . Kuschevatzky sat down with The Hollywood Reporter's Spain Bureau Chief Pamela Rolfe to discuss brand strategy and making a profitable niche in the piracy haven that is Spain.

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I understand this is not Telefonica buying up production houses like back in the early 2000s. Now you're looking to tap what Telefonica already owns?

We are aiming to increase synergies between the already existing resources Telefonica has in Europe and Latin America and then--expand, increasing the synergies between the different parts and enlarging the slate. The concept is to move beyond the [Spanish and Argentine] laws' requirements and create a global brand of movies and TV series. We're going to produce 25 films in the next two years.

You've said that the Telefonica Studio's strategy is to not cater just to the family. Can you explain that?

The whole idea is to create diversity. The canvas I would love to paint on is made up of genre pictures. I love musicals, comedy, horror, I love thrillers. And Spain is great for that. I think people can connect with genre pictures' structure. What attracts me the most about genre pictures is when the director can put his stamp on it to create personal genre movies. We've been working very successfully in Argentina for the past five years with this idea and the results have been amazing. 

Are Telefe's impressive film results indicative of where Telefonica Studios can go?

This year in Argentina, Telefe became the player, the only viable player in the market. I'm very proud of it because it has been a struggle. Argentina had an explosion of authorship, but they forgot genre altogether. There's a big tradition of genre movies in Argentina.  So the idea that Telefe put it back on the map was a big deal and the audience loved it. 5.5 million tickets sold by Telefe movies this year. We've broken the record. Before it was 3.6 million tickets--and that was for Telefe too. Our market share of local Argentine production is 90.1 percent of the domestic production. Nine of every 10 guys who went to the movies to see Argentinian stuff, went to see a Telefe movie.

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So what is the kernel of the philosophy that has made Telefe so successful?

First of all you have a network that believes in content and that makes a huge difference. The same way Antena 3 and Tele 5 did in Spain, Telefe saw the movies as a great platform to create brand.  And a network that promotes its pictures works really well. At the same time, we were looking for material, directors and stars. We create long-term relationships with directors, writers, actors and co-producers. It makes a difference because everyone knows we are worried about the quality of the product and want a solid relationship. If we look at what we call the Hollywood golden era, it's because they created these rewarding, long-term relationships.

Is that the strategy we can expect  from Telefonica Studios in the future?

There are a lot of elements in the mix. We don't have a broadcast network here [in Spain]. That means in order to have the relevant pictures, we have to work with Antena 3, Tele 5 and TVE. We are choosing on a film by film basis. I'm good friends with everyone. We did Tadeo Jones here with Tele 5, but Septimo we did from Argentina with Tele5. There are a lot of different  formulas. We just did Foosball in Buenos Aires with Antena 3.

So Telefonica will use original programming to create brand loyalty in Spain and Latin America for its products pay TV products?

I won't compare the Spanish or Latin American situation with Netflix or other VOD services you have in the U.S. Here, it's a growing market. But nobody knows exactly how to tap into it yet.  For us, it's very important to have a day and date window, exclusive 21 day window. We need to make a difference. It's not going to hurt theatrical distribution because almost 100% of the material you have nowadays on VOD is not exclusive. But it will create brand loyalty. Think of HBO.

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What about the piracy in Spain? How does that play into your strategy?

I would call it collateral damage. We already knows it's there. We are not the ones who have to enforce the piracy law. 

What do you say is the main message at this moment of Telefonica Studios?

We are here to stay. This is not Telefonica experimenting in anything. We believe in content and we do believe content has a profound effect on the relationship between people and companies. Give us some time and you will be surprised.