Major film streaming and DVD rental site Netflix will arrive in Spain in January 2012, following its success in the US and Canada, but will face a tough challenge in a country ravaged by piracy.

The news of Netflix’s imminent arrival in Spain has been confirmed by Pedro Perez, president of the local producers association FAPAE, who said Netflix had contacted various Spanish producers ahead of its launch.

“Netflix has already broken into the US market gaining 26 million subscribers so far and they expect to have 30 million before the end of the year who are paying between 8 and 10 dollars a month,” said Perez.  

The company offers more than 3,500 films and is expanding its reach rapidly, opening up in 43 countries across Latin America and the Caribbean just last month to much fanfare. But whether it can perform in Spain will be one of the company’s toughest challenges.

Spain is on the International Intellectual Property Alliance’s Watchlist of offenders for piracy with 400 million illegal downloads per year, compared with 100 million tickets sold in the theatres. Several attempts by local producers and distributors to provide legal downloading sites in Spain have struggled so far.

“We are part of the Filmin website, which offers titles from local producers, and although we are growing slowly, there are not enough subscribers to believe there is a market, like there is in France, the UK or Germany,” one leading local distributor told ScreenDaily.

Even the much-trumpeted arrival in Spain of Apple’s iTunes store in November has failed to ignite change, with sales figures remaining low.

But this isn’t stopping companies from trying. Aside from Netflix, the Swedish film and TV platform Voddler has also just launched in Spain. Based on the model of Spotify, the site will offer 80% of its content for free, which have already been shown in the cinemas, video clubs and on TV, and the rest will be films currently showing in video clubs with low charges of between €1-€4.

Furthermore, the Spanish government is taking steps to tackle piracy with the approved Sustainable Economy bill, which will allow the courts to close down sites offering illegal downloads.