Spain Takes Center Stage

October 2008

The Spanish market has never been more vibrant. The feature-film and television production industries are serving up popular fare and viewers have more and more outlets to watch programming. But the multichannel boom is hitting the traditional TV networks and intensifying competition in one of the most highly saturated TV markets in Europe. Audience fragmentation is reshaping Spain’s TV map and the fight for ratings is fierce.

The dominant broadcast networks are each garnering less than 20-percent audience share for the first time in Spanish TV history. In fact, the three main networks, public broadcaster TVE and the commercial networks Telecinco and Antena 3, now draw a combined 53-percent share when ten years ago they were garnering 70 percent. And all the while thematic channels are growing steadily.

Advertising is reflecting the market’s fragmentation, with more players competing for the same pie, and as a consequence, TV ad revenues fell 4.1 percent through June, reaching 1.7 billion euros. And the sluggish Spanish economy isn’t helping matters either. Networks are already showing signs of a slowdown, with lower profits and a tighter hold on costs. Mediaset-controlled Telecinco, one of the most profitable broadcasters in Europe, posted a 6-percent fall in net profits through June, reaching only 198.87 million euros compared to 211.58 million euros for the same period last year, while revenues were down 1.6 percent. Antena 3 Televisión, owned by publishing house Planeta, fared even worse. Its profits dropped 31 percent to 80 million euros, with revenues down 11.5 percent to 476.9 million euros. TVE saw its ad revenues decrease by 13.8 percent to 328.6 million euros.

But despite the fact that the Spanish TV market is in the throes of change, the broadcast networks TVE, Telecinco, Antena 3, and even newcomers Cuatro, owned by Sogecable, and La Sexta, whose main shareholders are Mediapro, Grupo Árbol and the Mexican TV giant Televisa, still air some of the most popular programs on offer. On average, Spaniards spend 232 minutes watching TV each day. Sports—mainly national and international football—drama and comedy series, current-affairs programs and special music events, such as the European song contest Eurovision, drew the largest audiences during the 2007-2008 season.

Among the top-rated 40 broadcasts, each capturing more than 6.5 million viewers, the top nine were football matches. The EURO 2008 final between Spain and Germany aired by Cuatro attracted nearly 15 million people, securing a whopping 81-percent audience share. TVE pulled in an average of 9 million viewers during Eurovision, and up to 8 million viewers watched the two political debates between the leaders of the conservative and socialist parties during the electoral campaign. In fact, current-affairs and news programs make up one fifth of the commercial TV channels’ schedules, according to Corporación Multimedia.

THE POWER OF PROGRAMMING

Drama and comedy series are very popular on Spanish networks, especially in the highly lucrative 10 p.m. to 12 a.m. prime-time slot, with Telecinco taking the lion’s share of viewers Monday through Thursday. Among the most successful local series are Telecinco’s Yo soy Bea, the Spanish version of the Colombian telenovela Betty, la fea, which has reached peaks of more than 8 million viewers, although its ratings are now starting to slide. Other series on Telecinco are Aída, Hospital Central (the longest-running Spanish TV series, with more than 210 episodes), El Comisario, Escenas de matrimonio and Sin tetas no hay paraíso, the most successful premiere of the season. Other ratings winners are the domestic series El Internado, Los hombres de Paco, and Física o química on Antena 3.

It’s not just in Spain that these shows are faring well. Escenas de matrimonio is airing on CaribeVisión, which serves Puerto Rico and portions of the U.S. Hispanic market, and also in Uruguay; Hospital Central will air in Italy, with RAI producing a local version; Los hombres de Paco has been sold to Romania, Greece, Russia and Italy; El síndrome de Ulises, on Antena 3, has been acquired by Fox Television Studios, which will produce a local version for North America; and Cuatro has sold Cuestión de sexo to the Mexican channel MVS Television. The Globomedia-produced cop drama Countdown has been picked up by Italy and Canada.

Foreign fiction and cinema represent 20 percent of the commercial TV channels’ schedules. Cuatro and La Sexta are relying mainly on imported series to attract viewers. House, Kyle XY and Californication, all on Cuatro, are working very well. On La Sexta, Bones is the most popular, with Shark, Padre de Familia and Reaper vying for the audience’s attention. On Antena 3, The Simpsons is still a ratings winner.

Reality programs also have an important presence on Spanish TV. Telecinco is taking advantage of the popularity of the genre with a number of shows. Big Brother reached peaks of 2.7 million viewers and the tenth edition is in the works, Operación Triunfo averaged more than 2.4 million with a one-time peak of 3.4 million, and Supervivientes also fared well. Cuatro is also betting heavily on reality with Fama ¡A bailar! peaking at 2.1 million, Factor X and Supermodelo. This season Cuatro has a new reality show called Circus, más difícil todavía, an adaptation of Celebrity Circus, along with the adventure program Pekin Express, and is also working on a new program called Granjero busca esposa, the Spanish version of the FremantleMedia format Farmer Wants a Wife, to be produced by Grundy Producciones. Antena 3 and La Sexta also rely on reality shows such as Esta casa es una ruina, with almost 3 million viewers, and Terapia de pareja, respectively.

STAY TUNED

Given the cultural and language ties to Latin America, it is not surprising that soap operas work well on Spanish TV, especially on TVE 1, where Amar en tiempos revueltos and Victoria are capturing massive audiences. TVE 1 is now betting on TV movies, with Fago, Desaperecida and El caso Wanninkhof. The channel is also working on a new TV movie, produced by Globomedia, Aguila roja (Red Eagle), which takes place in the 17th century. “We bet on fiction series that target a 40-plus audience while aiming to maintain the over-64 age group,” says Javier Pons, the director of TVE. For this season, Pons explains that TVE will strengthen the cultural programs on the public broadcaster’s second channel, La 2, and will premiere a new series directed by Alex de la Iglesia. In an unprecedented initiative, the channel will present the new season of the sitcom Cuéntame cómo pasó before thousands of people in a macro-event in Madrid. Telecinco will follow suit with a similar event at Madrid’s Palacio de los Deportes, with an audience of 5,000, to introduce the second edition of Sin tetas no hay paraíso. For this season, Telecinco will release “new fiction and entertainment series, but the key is that we have a very clear [programming mission and] a deal with viewers who know that [Telecinco is] a very commercial [network] that entertains and keeps them company,” points out Manuel Villanueva, Telecinco’s director of content. He is satisfied with the network’s performance last season. “We released 13 new programs and six [performed above the network’s average audience share] and another six [scored more than a] 20-percent [share].”

Antena 3 will present new TV series such as Cazadores de hombres, about a policewoman who wants to settle accounts with the killer of her family, and a Spanish version of the British series Doc Martin. The network will also air TV movies like El castigo, 20N and Marisol, as well as the U.S. series Private Practice. Antena 3 will also premiere Impares, the first Spanish TV series that has succeeded on DTT, and a youth-orientated series, entitled 18, produced by Videomedia. “Fiction is a priority for a commercial TV channel because when they [work], they guarantee viewer loyalty,” says Pello Sarasola, the director of broadcasting at Antena 3.

For Fernando Jerez, the director of broadcasting at Cuatro, this season will be difficult due to the economic crisis “that will cause…a drop in the market and we will have to make an effort to adapt to the circumstances. The most important thing is to have a plan, to know our identity, and to be satisfied with the channel we are making even within [the economic restraints we have to deal with],” he concludes.

La Sexta will continue to rely on sports, particularly football and Formula 1, comedy shows like Sé lo que hicistéis…, El Intermedio and Caiga quien caiga, and foreign drama series such as Bones. This season, reality programs also have a place on the channel: The weekly series Una cámara en mi casa reflects the reality of Spanish families and provides all members of selected families with a TV camera to tell their stories; and De patitas en la calle follows young people who want to become independent from their parents.

PRODUCTION SAVVY

The sharp decline in ad revenues through the first half of this year is likely to have a big impact on the TV production industry in Spain. Networks are tightening their belts and TV producers are feeling the impact. Nevertheless, the production business is still very healthy following years of extraordinary expansion, both on a national and an international level. Exports of Spanish films and TV programs abroad amounted to ¤93 million in 2007, with more product sold to Europe than to the U.S. and a spectacular rise in the number of sales to Asia, according to FAPAE, the Spanish Producers Association.

Consolidation is increasingly taking place in a sector already dominated by a few large production companies. Imagina Media Audiovisual, a holding company formed by the merger between Mediapro and Grupo Árbol, the biggest drama series producer in Spain, has become the largest TV production company in the country and one of the leading production companies in Europe. Imagina’s activities range from TV and film production to international distribution, transmission services and post-production. The company, with more than 130 formats and some 3,000 hours in its catalogue, is responsible for many of the most successful Spanish TV fiction series, such as Los Serrano, Aída and Siete vidas, entertainment programs like Noche hache and 59 segundos, and films like Los lunes al Sol and La vida secreta de las palabras.

“We bet on family productions, TV series targeted at all kinds of people,” explains Géraldine Gonard, the sales director at Imagina International Sales, who adds that “market fragmentation is good for us because we have more clients, even though they are smaller and have less [money to spend].” Gonard acknowledges that the economic crisis is affecting the industry: “Networks now think about it long and hard because budgets are tight. We try to sell directly, although in some difficult markets like Turkey or the Middle East we have local distributors.” She notes that Imagina is now targeting Europe, especially Eastern Europe, and Latin America, with plans to break into North America and Asia. “Spanish productions have high quality standards capable of competing with any European or U.S. product,” explains Gonard.

Within the Spanish TV-production industry, animation stands out for its quality and international reputation. The preschool show Pocoyó is produced by Zinkia and distributed internationally by ITV Global Entertainment to 100 countries. Pocoyó has won several top awards and the company plans to end the year with the series airing on more than 200 TV channels in the world, reaching 800 million viewers.

Another thriving company is BKN New Media, with a catalogue of more than 1,000 hours of programming. BKN is well known for Legend of the Dragon, Kong: King of Atlantis, Dork Hunters from Outer Space, the series Zorro: Generation Z and the film Zorro: Return to the Future. The Zorro: Generation Z series has proven to be a ratings-winner in Spain, beating other shows like Pokémon, and has a massive merchandising rollout to come in 2009 with a specific line of toys. The company is now producing the second season of Zorro: Generation Z completely in high definition in its HD studios in Barcelona.

“We decided to produce in HD because it allows us to control the whole production process [which now takes less time] and allows us to fulfill the new demands and needs of our clients,” says Laura Tapias, the managing director of BKN New Media in Spain. BKN is also producing Stone Age in HD, a series of 52 11-minute episodes about cool kids living in the prehistoric era. Another production that BKN is presenting at MIPCOM is Dork Hunters from Outer Space, which is working really well in the U.K., Australia and South Africa, among other territories. The company’s most important markets are Brazil, Mexico, Italy, Canada and Australia. Tapias points out that “our brands [are always accompanied by] products with which a kid can play and have fun. Thanks to [audience] fragmentation, now we have many more opportunities in the highly competitive animation market.”