Upcoming Netflix Spain Launch Brings Debate at San Sebastian Industry Panels

CTK via IƱaki Pardo

The streaming giant's scheduled Spain launch in October overshadows conversation of the changing business model.

Netflix’s upcoming launch in Spain hovered over industry debate Sunday at the 63rd San Sebastian International Film Festival as insiders grappled with how the streaming giant’s presence will change the game in Europe.

The newly added European Film Forum, backed by the European Commission’s MEDIA program, spent Sunday looking at audience-centric production, distrution, funding and exhibition.

George Schmalz gave impressive numbers of how creative project-funding platform Kickstarter predicted it will have raised $300 million for some 19,000 film projects by the end of the year and Sophie Kuno said Tugg — which crowdsources theatrical screenings — has organized more than 5,000 screenings and sold half a million tickets.

But as panels discussed funding and how to identify the audience, Nestor Hernandez, Original Production Manager of HBO Latin America, was clear that he expects the changing business model driven by digital content to eliminate some of the big players. He emphasized that he spoke on the panel as an industry expert and not as a representative of HBO.

“The formula isn’t just to make content, but to make content that the native digital audience wants to see,” Hernandez said. “So far, the ones that have adapted best to the digital world with their series are Netflix and Amazon.”

Hernandez also said HBO was prepping 10-minute, high-quality webseries that will differ from YouTube shorts because of the production value.

Across town at the Spanish producers' federation's FAPAE press conference, president Ramon Colom and FIAPF’s Benoit Ginisty spoke at length of how complicated it will be for local films to find distribution in the digital single market in Europe proposed by the EU.

“We believe our industry is very complex,” Ginisty said. “We want to be able to keep the right to be able to sell precise rights and invest in P&A, and preserve the freedom for local distributors to promote precisely in their respective territories — for example, using appropriate titles in each territory.”

The EU is looking to end territorial exclusivity — licensing to each of the 28 EU territories separately.

“We are terrified at what this will mean for distributing our films,” Colom said. “Who will be able to buy a lump of all the territories? Netflix. Amazon. Investment Funds. They are they only ones who can do it.”

Colom went on to convey that Netflix enters Spain next month in a bit of a loophole, with no legal requirement to buy Spanish cinema. Other Spanish broadcasters — like Telefonica, which offers the strongest VOD streaming service in Spain now — are required to invest 5 percent of revenue in Spanish production.

It’s unclear if Netflix intends to use San Sebastian as a platform to announce what would be its first acquisition of Spanish product.

Colom echoed alout what sales agents tend to whisper about. While Spanish films want globalization for distribution, it is getting harder for foreign-language films to cross borders for theatrical release.  

FAPAE announced Sunday that Spanish films accounted for 12 percent of the domestic box office as of Sept. 1, and that it expected market share to sit at 20 percent by year’s end.

Clearly the Spanish-speaking industry is looking to flesh out a new business model for distribution. To that end, Ibermedia TV — also new to the San Sebastian festival — has added a $25,000 prize for second-window, non-exclusive, free-to-air or digital distribution rights to the winner of the Films in Progress sidebar, which starts Monday.