Industry Report: Distribution and exhibition
European Distribution: Focus on Spain
by Birgit Heidsiek for Europa Distribution
- Due to the economic crisis, the tremendous increase of ticket prices, the lack of a young target audience and not least piracy, it has become difficult to release European art house films in Spain. The total number of cinema admissions keeps dropping constantly since ten years. While in 2004 there still were 147m tickets sold, the number of cinemagoers in Spain went down to 90 m in 2013. Although the local comedy Ocho apellidos vascos (Spanish Affair) [+see also:
film profile] by Emilio Martínez-Lázaro grossed round about € 60m and increased the ticket sales by 29 percent in April 2014, Spanish art house film distributors don‘t get spring fever when they look at the the current market situation.
According to Daniel Bajo, Head of Acquisitions at Karma Films, art house films are currently having a tough situation in Spain. However that is not just happening to art house films but to all kinds of films. “Focusing on the art house, new generations, or the huge majority of them, are not interested anymore in these films. We have lost these new generations so our potential audience is growing old progressively”, underlines Daniel Bajo. “Moreover many art house theaters have closed or are having difficulties to continue their activity. Also, in the last few years, due to the disappearance of some of the main independent distribution companies, the distribution market has been invaded by many smaller (sometimes very small) distributors.” That means that each week there are at least eight to ten releases which are competing with each other while the number of art house theaters is decreasing. “The competition is very tough. It is difficult to keep the film in theaters for more than two weeks.”
“Our experience with our recent releases of European non-national films is in general very worrying“, states Miguel Morales, Head of Acquisitions at Wanda Films. “The admissions have dropped dramatically and with a film that could do 80,000 admissions, now we do 30 to 40,000, with exceptions like The Great Beauty [+see also:
interview: Paolo Sorrentino
film profile], but every time these exceptions are getting more unusual". Only art house titles which won prestigious awards such as The Great Beauty and Blue is the Warmest Colour [+see also:
interview: Abdellatif Kechiche
film profile] performed well in Spain. Eduardo Escudero, Business Manager at A Contracorriente Films reports that they made more than 125,000 admissions with Me, Myself and Mum [+see also:
film profile]. “This film is a very unique ‘dramedy”, underlines Eduardo Escudero who points out that feel good movies and dramedies perform better in times of an economic crisis. Daniel Bajo believes that the audience appreciates it if the story telling of a film is a bit conservative. “In terms of genres, light comedies always have a chance to work.”
Enrique Costa, Head of Distribution at Spanish production and distribution outfit Avalon reports that less and less cinemas are interested in their movies “The final box office is around 30% less than two years ago”, says Enrique Costa. “Our biggest success was Searching for Sugar Man [+see also:
film profile] and it looks like docs should work, but that was a unique experience. The movies that really perform better are the ones for women between 40 and 60.” Daniel Bajo draws a similar conclusion: “The target audience is growing old. That means that distributors are looking for films targeted for 50+, especially women. It is very hard to see in Spain a successful art house film for young audiences. No distributors are interested in these films, as they know it won’t work nowadays.”
The cinemagoers are mostly urban. The young audience is not coming as much to the cinema as they used to. They are only interested in commercial movies but not in art house films. “First of all they don’t like to watch a movie in original version”, says Enrique Costa. “They also don’t want to wait and pay for a release, they are used to download, unless you release at the same time as the country of origin and you create an event around the movie. That mostly happens with young male audiences. Young females are still going to cinemas.” Social medias can have an impact. “It helps with younger audiences, but you must really create an event around your release”, emphasizes Enrique Costa. “The social media have less influence every time. They dedicate less time and space for cultural contents including cinema”, remarks Miguel Morales. “Considering at this moment the range of age of the moviegoers we think social media has less influence that it should have”, says Eduardo Escudero but he isn‘t sure if the distributors are managing properly all the potential of social medias. “It is difficult to measure the impact the social medias are having in terms of captivating audience to certain films“, outlines Daniel Bajo. “However many distributors are doing a big effort to keep potential audience aware of their releases through social media.“ Therefore, they are shifting their budgets from classic publicity to online activities which includes social media.
For young people, cinema is not among their leisure priorities anymore. “There is a lack of an audiovisual literacy at schools”, adds Eduardo Escudero, “which is giving us a cinema illiterate generation.”The biggest competitors for the cinema in terms of other leisure activities in Spain are piracy, soccer. “Spain is one of the countries where piracy is more extended”, points out Daniel Bajo. “Those elements, together with a huge increase of the ticket price in the last years have made that people don’t go so often to theaters. People, especially youngsters, feel that cinema is too expensive, which is a logic feeling if you have it easily for free at home.”
The introduction of the digital cinema doesn’t have a huge impact on the way of programming yet. Almost 80 percent of the screens are now digital in Spain. “It’s early to see any change in programming”, says Eduardo Escudero. “Perhaps it is getting worse as they are giving more screens to the US blockbusters. It’s easier and cheaper. Unfortunately many theatres of medium/ small cities have adopted (because there is no public money for digital transition) the VPF model through third parties and I think we have lost the opportunity to approach to these cities content at the same date or closer to the national release. In some manner we don’t improve the situation we had when 35mm was the only option.” Daniel Bajo from Karma Films points out that the digital cinema has not changed significantly the exhibitors’ program. “At least now, some commercial theaters are showing the film at certain hours, in original version with subtitles. But only at certain times, because original version in Spain is still something for a small minority.”
While the ticket prices in Spain were risen due to increase of sales tax from eight to 21 percent in 2012, there is less state support for the film industry. The budget of the industry’s main subsidy, Spain’s Film Protection Fund, fell of 56 percent: from € 80 milion in 2011 to € 35.5 million this year. In addition, the TV investment in local films was reduced almost by half while the TV advertising plunged 53 percent from 2007 to 2013’s € 1.75 billion. In Spain are also fewer TV sales made, as the art house distributors report. “TV sales really decrease the amount every year”, elucidates Enrique Costa. “There is only one Pay TV channel that is paying less and less. The national public TV (Mediaset and A3) doesn’t buy anything form our catalogues.” Miguel Morales has to deal with the same difficulties: “TV sales are only an option for films that perform well. In addition, the broadcasters are paying smaller amounts.” “TV sales for art house are not very common, especially free TV, which is almost impossible”, concludes Daniel Bajo. “If you are lucky you can sell to Pay TV but the prices are tiny.“
In order to refinance the P&A budgets, the funding of Creative Europe is a big help for the independent distributors. “However, even this – considering the high costs involved in terms of P&A in this country - is not enough. So we discount our TV contracts in order to finance new investments in MG and P&A”, adds Eduardo Escudero. For A Contracorriente Films, the theatrical distribution is still the most important source of financing. “Now, even it has become extremely risky, but it is the only distribution outlet that you can control in certain manner or at least can perform in accordance with your P&L (Profits & Losses) plan.“ Meanwhile, the DVD sales and rentals are dropping dramatically. “1,000 units per title is an accurate average for sell-thru and less than this amount for rental so, definitely, DVD is no longer a source”, emphasizes the distributor. At Karma Films, DVD is still an income. “But it is decreasing and decreasing. However we can always count on a certain amount via DVD sales and/ or rental“, explains Daniel Bajo. “Moreover, in our case, the fact we that we have our own DVD label, makes the DVD window an important source of incomes, not only with our own titles but also with the other distributors that make their DVD release through us.”
Although VOD is becoming another outlet, it is not very significant yet. Due to the fact that distributors have to respect the release windows, VOD is not a real alternative to piracy. “We need a legal offer to compete with piracy. Such legal offer exits but piracy level is still being here one of the biggest of Europe. There is a volunteer lack of political action against piracy in this country“, emphasizes Eduardo Escudero. “We need a law in Spain to fight the piracy“, affirms Miguel Morales. Together with other distributors and producers, Wanda Films created the VOD company Filmin five years ago. “We thought it might become a future source of financing but due to the uncontrolled piracy in Spain it is really difficult for any legal platform to survive.“
In Spain, day-and-date is legal, and there already have been a few experiments with different results. The film Stranger by the Lake [+see also:
interview: Alain Guiraudie
film profile] was released one week before the theatrical opening for only 72 hours on the VOD platform Filmin. “This experiment worked very well because of the type of film“, sums up Daniel Bajo, “but it is not a real alternative. The biggest theater companies in Spain are acting as lobbies, pressuring the distributors to respect a 3-4 months theatrical window; otherwise they don’t release your film.” In his opinion, different windows can coexist, and in some aspects, they can help each other, for example, promoting the film. “This, together with a stronger legal system against piracy and a stronger educational campaign will be vital against piracy.“
In Spain, distributors are already getting a sense that the classic exploitation possibilities keep shrinking while they don’t get enough revenues from the new medias due to the lack of adapted business models in the digital era. Right now, this mainly affects the independent distributors but on the long run the financing of independent cinema will be on stake – in Spain and anywhere else.