Claire Wallerstein reports on the country's drop in admissions and negative impact of the new film law.

Spain has the most screens per capita worldwide outside the US, and yet admissions reached only 121 million for 2006 - the lowest since 1998.

Revenue increased just 0.2% year on year, to $856.6m (EUR641.5m) in 2006, despite a 5.2% ticket price rise. And the view for exhibitors looks even bleaker for 2007-08 with a new film law, currently progressing through parliament, which intends to increase local film screening quotas and squeeze out the money-making Hollywood blockbusters.

Rafael Alvero, director of exhibitors' federation Fece, says: 'The crisis is down to the local industry. Spanish productions are heavily subsidised, but most are of no interest to audiences.'

Spain produced 150 films in 2006 - the most in 25 years - but few were hits.

However attendance is expected to pick up in the third and fourth quarters, with big titles including Shrek The Third, Flyboys and Ocean's Thirteen. And already Pirates Of The Caribbean: At World's End has broken Spain's opening weekend box-office record, taking $11.7m (EUR8.8m).

And a recent $2.8m (EUR2.1m) subsidised ticket scheme for over-60s in the Madrid province has also been successful, with more than 500 participating cinemas seeing admissions rise by 20% and box-office takings increase by 74%.

A Filmax spokesperson says: 'The industry in Spain still has potential, but there are signs of saturation. We're hoping the sector will recover in the future with VoD, digital and other new technologies.'

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