Hit hard by piracy, Spain’s box office was down in 2011. But can a new piracy law, a growing VoD market and the popularity of local films give Spanish distributors cause for optimism? Juan Sarda reports
In an uncertain market already ravaged by chronic piracy, last year’s box-office results gave Spanish distributors little to celebrate.
The value of Spain’s box office in 2011 was $830m — down 2.4% from $856m in 2010. Ticket sales dropped 2%, down to 98 million from 101 million in 2010. Though the figures will not be conclusive until March, when the Ministry of Culture will make the final results public, it is clear the Spanish box office has been hit hard in recent years. In 2004, the best year at the box office in the last decade, there were 143 million admissions — 30% more than last year.
The business has also been hurt by the collapse of the Spanish DVD market. In 2003, the DVD business was worth $516m. In 2010, the last year with official numbers available, it was worth just $144m. Video-rental stores have declined in number by more than 75% over the past decade.
According to distributors, broadcasters are also buying fewer films. “Commercial TV channels are not investing money in cinema,” says Josetxo Moreno, co-founder of Golem Distribution. “We are struggling to survive.”
One bright spot is digital distribution, with Spain’s video-on-demand (VoD) market posting growth in 2011. New services introduced include filmin.es, a joint venture between independent distributors Golem, Alta Films, Wanda Films, Versus Entertainment and El Deseo among others; filmotech.com, which is focused on Spanish cinema; the mainstream youzee.com (owned by exhibitor Yelmo); as well as cineclick.com, waki.tv and Voddler. Netflix was expected to launch in Spain in 2011 but has been delayed until at least summer 2012.
‘The new piracy law is without doubt a very good step’
Jose Maria Morales, Wanda Films
However, the growth of VoD is still a long way from balancing out the decline of the DVD market, partly because many consumers are used to simply downloading or streaming films illegally. “You will not find any figures about [VoD growth] because at this point they are ridiculous,” says Enrique Gonzalez Kuhn of Alta Films. In addition to its involvement in filmin.es, Alta is also the owner of the arthouse cinema chain Renoir. “What I can tell you is that before the closure of file-sharing site Megaupload in January, we had eight new customers a day [at filmin.es] and now we have gone up by 125 in just a few hours.” Theatre attendance across Spain also grew 33% the first weekend after the US FBI’s closure of Megaupload.com.
The government approved a new piracy law at the start of 2012. The law, effective from March, will be able to close illegal websites within 10 days. “We really don’t know at this point how it is going to work,” says Jose Maria Morales of producer and distributor Wanda Films, “but it is without doubt a very good step.”
Another bright spot was the success of Spanish films at the local box office in 2011, with the market share of local productions rising to almost 15% — up 3% on 2010. The 3D comedy sequel Torrente 4 was the highest grossing local film of the year on $25.6m. Other successes included titles from well-known local directors including Iciar Bollain’s Even The Rain ($4.7m) and Pedro Almodovar’s The Skin I Live In ($6m). Spanish genre films were also solid bets, with Enrique Urbizu’s No Rest For The Wicked taking $5.3m and Jaume Balaguero’s Sleep Tight taking $4.7m. Local comedies were also a big draw, with the sequel to teen franchise Brain Drain grossing $6.8m.
“I am always optimistic about Spanish cinema,” says Alta’s Gonzalez Kuhn. “I think there is a new generation of good film-makers and we’ll see the results very soon. Genre films are already working very well with Spanish audiences and they have great prestige worldwide.”
Nevertheless, US product rules the Spanish box office, with The Twilight Saga: Breaking Dawn — Part 1 and the likes of Pirates Of The Caribbean: On Stranger Tides, The Adventures Of Tintin and Harry Potter And The Deathly Hallows: Part 2 all performing well.
Among the 20 most successful films in 2011, the only other Spanish title apart from Torrente 4 is Woody Allen’s Midnight In Paris — co-produced by Spanish outfit Mediapro — on $10.2m.
The presence of Spanish talent always helps to give a US film traction in the local market. On Stranger Tides, earned an astonishing $25m in Spain last year, its visibility boosted by Penelope Cruz. It was the same story with Puss In Boots ($19.9m), with Antonio Banderas heading the voice cast.
‘Genre films are already working very well with Spanish audiences and they have great prestige worldwide’
Enrique Gonzalez Kuhn, Alta Films
Spanish audiences love Hollywood stars too, and movies that do not work so well in the US and other territories often triumph in Spain thanks to the huge fanbase of some stars. For example, Clint Eastwood’s Hereafter made $33m in the US and $12.4m in Spain. Matt Damon is a popular star in Spain, alongside George Clooney, Brad Pitt, Angelina Jolie, Tom Cruise and Jim Carrey.
Animation and family movies also perform well in Spain. Among the 10 titles at the top of the 2011 box office, seven are suitable for younger audiences: Pirates Of The Caribbean, Tintin, Harry Potter, The Smurfs, Tangled, Puss In Boots and Cars 2.
On the arthouse circuit, feelgood titles, films from recognised auteurs and stories about the financial crisis proved popular in 2011. Successes included Roman Polanski’s Carnage ($3.7m, Alta), comedy Chinese Take-Away ($2.9m, Alta), Margin Call ($2.5m, Wanda), Little White Lies ($2.2m, Contracorriente), Of Gods And Men ($1.9m, Golem), In A Better World ($1.3m, Golem) and Inside Job ($800,000, Sony).
Tragedies or films with complicated or unpleasant subjects are less popular among distributors. “You think twice before buying a movie that is very depressing. We are doing better with the new movie by Aki Kaurismaki, Le Havre, than his previous films because it has this positive message,” says Golem’s Moreno.
In 2011, Golem released titles such as Golden Bear winner A Separation and the foreign-language Oscar winner In A Better World. “Prizes might help when there is a potential in the movie,” Moreno continues. “It definitely contributed to making The White Ribbon a great success but the prestige of Michael Haneke was also fundamental.”
Gonzalez Kuhn points out: “I believe quality is the main factor. We’re having a great start of the year as distributors and exhibitors thanks to The Artist and The Descendants. Not every year do you have the same level in films.”
The force of law
Spain is finally introducing new legislation in a bid to end its notorious piracy problem. But will it succeed? By Juan Sarda
When Spain’s new centre-right government announced the rapid introduction of a law against online piracy in January, the local industry was overjoyed. Piracy has long been rampant in Spain, with the government doing little to challenge the perception among the majority of Spaniards there is nothing wrong with downloading the latest releases for free.
That attitude has already decimated the Spanish music business, and the Spanish film industry has been badly affected.
The territory’s box office has been declining since 2004 and its DVD business is in the doldrums. A recent report by local industry lobbying group Coalicion de Creadores estimated digital piracy increased by 25% between June 2010 and June 2011, with the cinema industry losing $1.9bn to pirates over the same period. In 2010, Sony Pictures head Michael Lynton threatened to exit the Spanish market unless there was a law against piracy (Sony never left and the law took two more years).
The new legislation, known as the Sinde law after the previous minister of culture who created it, will be effective from March. The move re-inforces the concept of intellectual property and creates a new official committee that will have the authority to prosecute sites that offer cultural content without the right to do so. Illegal sites will be shut down within 10 days, with a judge ruling on closure.
‘A lot of people in this country don’t see anything wrong with piracy’
Agustin Almodovar, El Deseo
The recent shutdown of popular file-sharing site Megaupload by the US FBI has demonstrated the immediate impact such a move can have. Spanish video-rental stores claimed their business grew 15% the first week after the site’s closure in mid-January while cinema attendance also increased 30%. VoD sites such as filmin.es also reported a rise in subscribers.
There was more good news at the end of January when the EU, of which Spain is a member, became a signatory to the Anti-Counterfeiting Trade Agreement (ACTA), which aims to establish international standards for enforcing intellectual property rights. The commitment by culture minister Jose Ignacio Wert to fighting piracy has also given the industry confidence.
Yet there are still concerns about the law’s effectiveness. “A lot of damage has already been done,” says Agustin Almodovar of El Deseo. “We have been in this horrible situation for more than a decade and a lot of projects have failed. I salute the law but I doubt how much it is going to solve things.”
Almodovar makes the point that changing ingrained consumer behaviour will be “very complicated to do. A lot of people in this country don’t see anything wrong with piracy and I’m afraid they will find a way to keep doing it. But at least now we seem to have some help from the authorities.”
It remains to be seen whether the tougher piracy legislation will have a beneficial effect on Spain’s nascent video-on-demand (VoD) sector. Several services are active — but the sector is relatively small at this point and according to the Coalicion de Creadores, 73.9% of films watched online are illegal.
“We participate in this VoD site, Filmin, which has few users,” says Almodovar. “But if it didn’t exist, [consumers] would accuse us of not offering an alternative.”