Why the Spanish Film Industry Is Embracing Netflix

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As the global film sector debates the streamer's business model, Spanish producers see "only advantages" to its first European production hub, which officially opens Thursday in Madrid.

When Netflix premiered two Spanish original features at the recent Malaga Film Festival, they were received as just two more titles in an Official Selection full of young talents from across Spain and Latin America. Absent were the kinds of protests and vitriolic reactions that have dogged the global streamer’s presence over the last year at events in various countries, from Cannes and Berlin to the Oscars.

Netflix’s first competition title at the event actually “generated interest among people in the business," according to Beatriz Bodegas of La Canica Films, executive producer of Malaga competition title Who Would You Take to a Desert Island?

Bambu Producciones executive producer Teresa Fernandez-Valdes adds of her out-of-competition screener, A Pesar de Todo, "The Malaga Festival recognized it as a product that is still called a movie, still called cinema, even if it’s not being exploited in theaters."

While not everyone in Spain will welcome the streamer with open arms, especially theatrical exhibitors and free-to-air TV channels, producers have received Netflix with a mixture of excitement and relief.

“Netflix has changed the lives of producers in Spain,” Joaquin Padro, president and executive producer of Barcelona-based Rodar y Rodar, said before the Berlin premiere of his company’s competition title by Isabel Coixet, Elisa & Marcela, a Netflix original. “We’re in great need of an engine like this.”

Netflix CEO Reed Hastings will officially inaugurate the company's new Madrid-based production hub, a first for Europe, on Thursday in the presence of Francisco Ramos,  Netflix's vp Spanish Originals, and representatives from the industry. 

Netflix is rapidly expanding its international production output, opening production offices in Mexico City and Paris (adding to its European HQ in Amsterdam) and, in London, the company is reportedly in advance negotiations to take a long lease at Pinewood Studios' new space at Shepperton Studios, as well as at sites in the northern city of Liverpool and in East London.

“I see only advantages to Netflix’s Madrid hub,” says Enrique Lopez Lavigne, CEO and founder of Apache Films and Apaches Entertainment, producer of several Netflix acquisitions including the cult horror film Veronica. "I belong to those producers who consider there to be a progressive transformation in consumption habits…. The movie theater will never disappear, but a certain kind of cinema will have to find its niche and its model in order to find its potential viewer or client."

Spain offers strategic advantages for Netflix as well. “The television industry in Spain is very mature and you get a quality/price ratio you can’t get in other countries,” suggests Fernandez-Valdes, who, with partner Ramon Campos, produced Netflix’s first original series in Spain, Cable Girls, and will premiere new Netflix series High Seas this spring. “Apart from English-language fare, the fiction that travels the world today with the greatest acclaim is Spanish,” she adds.

Case in point: Money Heist, originally produced for Antena 3 Television, became Netflix’s most-watched non-English language show ever, winning an International Emmy and landing creator Alex Pina an exclusive overall deal with the streamer last year. Netflix just announced the show's third season will premiere July 19.

Series producers say Netflix boosted their already primed sector by providing the security that comes with commissioning whole seasons rather than the renew-as-you-go ratings decisions of the past, and improved working conditions and quality with bigger budgets — as much as 20 to 25 percent more per episode, by some accounts.

The company’s arrival is also credited with prompting Spanish platform Movistar+ to begin producing more — and more ambitious — series as well as films. HBO España (30 Coins, Foodie Love, Patria) and Amazon (El Cid, La Templanza) have picked up the pace this year in Spain as well.

Jose Antonio Felez, head of Atipica Films and producer of Netflix original film Seventeen, which is currently in postproduction, calls the appearance of these platforms “decisive” for greenlighting ambitious productions like his company’s Movistar+ series The Plague, which re-created 16th century Seville on a budget of 10 million euros ($11.2 million) for its first season of six 50-minute episodes.

Film producers point to three realities of the Spanish market to explain why they’re willing to give up rights and skip or limit theatrical releases on certain kinds of films to work with Netflix: an enduring financial dependency on TV sales and subsidies; an overcrowded box office; and a desire to see Spanish talents find international audiences that have historically eluded them. They also praise the "creative freedom" they say they've had on Netflix originals.

Although Netflix doesn’t share budget figures, its originals film budgets seem to fit the usual scope for typical Spanish productions — around 1.65 million euros ($1.85 million) for Desert Island and a little over 3 million euros ($3.36 million) for Seventeen, for example. More important, as Bodegas suggests, certain films like Desert Island “only get made thanks to Netflix.”

The character-driven generational drama by second-time feature director Jota Linares, “would have been tough for me to put together in a conventional way,” she says, with subsidies contingent on a TV sale that might not have happened. Likewise, Elisa & Marcela struggled for a decade to find financing and looked destined for TV before Netflix got involved, according to Padro.

On documentaries, which in the past were mostly low-budget and reliant on international co-producers, Morena Films founder and producer Alvaro Longoria, who co-directed the Netflix documentary Two Catalonias, suggests the streamer has triggered a “revolution” of bigger budgets and much bigger ambitions.

While Netflix is understood to be planning theatrical releases for some Spanish originals, including Elisa & Marcela and Seventeen, there could be resistance ahead judging by the refusal of some Spanish exhibitors last fall to carry Netflix title Roma due to its short theatrical-exclusive window.

A representative for the national exhibitors’ group FECE noted that while Spain, unlike neighbor France, does not have a legally mandated exclusive theatrical window, exhibitors consider theater exclusivity of “vital importance for the whole industry.” A film’s “ordered exploitation in windows generates an initial impact and expansive wave that grows with the windows system.” Netflix’s model, in FECE’s view, “brings no value and is not solidarity with the rest of the film industry.”

A Pesar de Todo will go straight to Netflix on May 3. Desert Island opened March 25 on one screen in Malaga before its April 12 premiere on Netflix, a release that could be enough to qualify it for the country’s annual Goya Awards. Eligibility rules reinstated by the Spanish Film Academy on March 25, after debate about including series and streaming products, require films to premiere theatrically for a minimum of seven days on the same screen, or three days for documentaries, but do not preclude a simultaneous release online.

Film producers broadly say they’re comfortable skipping a wide theatrical release in Spain for the kinds of non-event films that typically underperform locally. Lopez Lavigne cites two recent Apache features that found a “second life” on Netflix: Your Son and Quien te Cantara. Despite excellent reviews and local awards or nominations for both films, the two were seen by fewer than 100,000 moviegoers combined at the saturated Spanish box office last fall.

While viewing numbers aren't generally made available, Lopez Lavigne finds evidence across social media that Netflix offers films like these “a second premiere that, depending on the movie, generates growing interest week by week, blog reviews in other territories, a community beyond our borders of film lovers and those curious about Spanish or genre films.”

Producers also seem open to giving up most if not all international rights on some films. Longoria echoes others’ opinions when he suggests that a simultaneous release across Netflix's 190 markets “beats the traditional model of international distribution” territory by territory, especially when you factor in individual promotional campaigns in each market. “For local films in the Spanish language, this did not work 99 percent of the time.”

“In Apache, we’ve seen — through films like Veronica, Holy Camp! and Your Son — that the concept of territoriality has broken,” says Lopez Lavigne. For him, the Netflix premiere and permanency in the streamer’s catalog also represent a “second life for the authors and teams that dedicated years to these projects."

“We’re experiencing a great moment in terms of  creation,”adds Felez. “Spain has a very high level of talent in technicians, directors, actors, screenwriters. And now all of that talent can shine.”