Spanish cinema: counting the cost

Spanish film distribution is going through tough times. Admissions have dropped by more than 30% since 2001 and were down 6% year-on-year in 2012, while piracy remains chronic. The DVD market has declined so much that some producers do not incorporate it into their business plans, and broadcasters have tighter budgets (though it is a source of optimism they are becoming more interested in cinema).

“We are all struggling,” says Enrique Gonzalez Kuhn, head of distributor Alta Films. “We have lost the young generation, they don’t go to the cinema as they used to.” Gonzalez Kuhn says the difficulties are further exacerbated by the 21% VAT on tickets, a crowded theatrical marketplace and the overbuilding of cinemas during Spain’s economic boom.

He says the new strategy for Alta Films is to “reduce the number of films we release. We are also seeing that for the same money you can have some overpriced European productions or American titles with stars; we are working more with the US and had great results with films like Moonrise Kingdom and The Master.”

US cinema is big in Spain with a stable market share of 70%. In 2011, the last year with figures available, US majors grossed $612m and independent companies took $231m. Still, non-US fare can score big, with A Contracorriente Films’ release of French title Intouchables [pictured] grossing a significant $22.3m last year, for example. Despite this success, the company’s Adolfo Blanco advises prudence: “We have been very lucky and we are proud of our record, but the market is very tough and you have to be cautious.”

Like Gonzalez Kuhn, Blanco complains about high prices: “The problem here is that sometimes you don’t buy the best film because it’s too expensive… What is sad is that sometimes sellers agree to lower the price but then it is too late and those titles arrive at the cinemas losing their freshness.”

‘We have lost the young generation, they don’t go to the cinema as they used to’

Enrique Gonzalez Kuhn, Alta Films

Laurent Danielou, managing director and producer of France’s Rezo Films, who has been selling titles to Spain for the last seven years and who is a regular distributor of Spanish films in France, says: “We are very aware of the problems of distribution in Spain, mainly the loss of sales to broadcasters. Still, Spain is a very important place and has a strong audience for European films.”

Danielou does not agree with the complaint about high prices: “The prices are set by the market. When you have a good film, you always find a distributor who is willing to pay. French films sometimes are too expensive, but that’s a problem with the costs of French production.”

Ignacio Segura, head of independent DeAPlaneta that works with mainstream US cinema and select European films, uses the strategy of buying before production, reading the script and valuing the cast and director. “In Spain, big stars rule the game and some of them have a very faithful public,” he says. “Sometimes pre-buying gives you bad surprises but that’s the way we work.”

Segura says that after Cannes last year there was a change in mentality among sellers and that prices have since gone down. Miguel Morales, head of Wanda Films, says that while there is “some understanding from sellers it still gets too tough”. He plans to buy in Berlin but adds that “right now, we just cannot take any risk”.

The success of a range of local films in 2012 has not given much of a boost to independent distributors since the six highest-grossing local films were released by US majors. Gonzalez Kuhn, whose company handles a range of big local productions such as The Artist and the Model and Twice Born, is also the owner of Renoir cinemas, which has a long record of exhibiting Spanish films. He welcomes the popularity of Spanish films: “Mainstream exhibitors used to complain about the law that obliges them to release some national cinema,” he says. “Right now is the opposite, they need it.”

But despite the local successes, Spanish cinema can still be a tough sell. “There are some high-profile titles but it’s still complicated to get people to see Spanish cinema because there still is a prejudice against it,” says Wanda’s Morales. “We have made $1.4m with Blancanieves and we are sure it can be much more.”