Legal movie downloads on the rise as Netflix eyes Spain launch

Spanish streaming growing faster than EU average ahead of US giant’s predicted arrival

A woman watches the trailer for the new ‘Star Wars’ movie on her TV.
A woman watches the trailer for the new ‘Star Wars’ movie on her TV.SANTI BURGOS

In 2009, Adam Sandler comedy Funny People made more money than the entire European streaming market put together. While that one movie grossed €65 million, 17 European nations’ online movie services made just €59 million that year, according to the most recent report from the European Audiovisual Observatory. By 2013, however, things had changed radically, with earnings up almost ten-fold to €588 million, the report said.

The data points to consolidation in the European streaming market, with revenue doubling year on year between 2009 and 2013. Online movie watching still has a long way to go before it catches up with digital music, which finally outstripped CDs in 2014, or with movie theater takings, but it has at last surpassed DVD rentals.

We’ve been waiting for Netflix to come for some time, because they will expand the market” Juan Carlos Tous, head of Filmin

Proof of the improved health of the European streaming market is the interest being shown by the sector’s biggest player, Netflix. The US giant made its first foreign foray in the UK, before setting up in Germany, France and other European countries. Now present in 50 nations worldwide, it has a global audience of 62 million people, nine million of them in Europe. This fall the company will finally BE entering the Spanish and Italian markets, say numerous sources.

The Spanish streaming market has improved significantly since 2009, when it was worth just €800,000. In fact, Spanish streaming services have grown faster than the European average: between 2012 and 2013, earnings increased by 78.5 percent, from €12.4 million to €22.2 million. The companies running Spain’s streaming sites, firms such as Yomvi, Filmin, Wuaki.tv, Nubeox and Filmotech, say that since then, the sector has expanded yet further.

Juan Carlos Tous, president of Filmin, which specializes in art-house movies and television series, says the past year has seen a 45-percent increase in new users. “Subscriptions grew by 10 percent each month over the year, but the curve for the first quarter of this year has been even more impressive,” he says.

The Netflix game changer

Last fall, when US television viewing figures showed a further decline, broadcasters pointed the finger of blame at Netflix, the streaming service that has revolutionized the way people watch movies and series, and forced the main channels to come up with their own web-based services.

Consumption of traditional television has fallen an average of 13 minutes a day over the course of 2014, while Netflix has seen its share increase by 12 minutes a day over the same period. The loss of viewers coincides with a fall in television advertising revenue, further adding to the woes of broadcasters.

Netflix, set up in 1997, only impacted on the US market as an online service a decade later. It also offers subscribers a DVD home-delivery service. It now has around 62 million users, 40 million of them in the United States, where it is present in around 40 percent of homes.

Its low cost and success has prompted Google and Amazon to come up with similar services, with HBO following their lead as production companies start creating shows aimed at an internet audience. Jeff Bezos, the owner of Amazon, has promised to offer his subscribers movies one month after they are released in theaters, while traditional networks are putting their shows online the day after they are broadcast on television, if not simultaneously.

Josep Monleón, content director at Wuaki.tv, says his company’s growth has been pretty much identical: a 45-percent increase in subscribers over 2014 to reach the current figure of 1.4 million.

The reasons why growing numbers of Spaniards are signing up to streaming services are many and varied, say industry players, citing improved bandwidth, and cheaper and more effective devices to link television sets to the internet. At the same, the closure of sites offering unauthorized downloads of movies and television series has also helped. Most Spanish companies are confident that the sector will be profitable in the short- to medium-term. Pablo Romero, content director at Yomvi, says that there has been a three-fold increase in the number of people watching streaming premieres over the last year. “In March 2014, Fast & Furious 6 was watched 35,000 times. This March, The Expendables 3 was watched 75,000 times.” The same trend can be seen across other genres.

The boom is prompting many Spanish players to expand. Filmin says it is opening an affiliate in Mexico, and, thanks to investment by French distributors Metropolitan, it is aiming to be present in 12 European countries within two years. Like Monleón, Filmin’s Tous welcomes the arrival of Netflix. “We’ve been waiting for them to come for some time, because they will expand the market. People now buy television sets with internet access: it’s now clear that you don’t have to watch on your computer,” says Tous.

If Spain’s streaming services are going to reach sustainable profitability in the short to medium term, they will need to improve their catalogues. One of the main reasons people say they still download pirated content is that they cannot find the series and movies they want otherwise.

“I would like to have a catalogue of 30,000 movies, but there are limits: it costs money to buy them, to digitalize them, and to host them,” says Monleón, whose Wuaki.tv offers 8,000 movies and series. He says he would also like to be able to stream box office hits within two months of their release: at present he has to wait up to four months.

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