Movistar+ and the big original content game
Telefonica’s Movistar+ is the biggest pay TV service in Spain and is actively increasing its audience base in Latin America. For 2018, the company is planning its biggest ever content push as it aims to conquer more viewers with a diversified original drama slate. Domingo Corral, Head of Original Programming at Movistar+, tells Iliyan Stoychev more about Movistar+’s ambitions to grow in the Spanish speaking markets and why original content is key in their strategy.
Félix
Domingo, Telefonica has become Europe’s first incumbent telecom to launch a massive premium scripted drama slate. How many series have you already launched and how many can we expect in 2018?
We have already launched three series – Velvet Collection, La Zona, and Vergüenza. In 2018, we plan to launch 11 series. In terms of genres, we have comedies and dramas. Besides the pure drama projects, we have planned 2-3 drama thrillers for 2018 – we have a romantic thriller, a historical thriller, and a family drama with thriller component. We also have two projects dedicated to millennials. One is based on a book written by El Rubius (elrubiusOMG), one of the most famous YouTubers in the world. This is the comic book Virtual Hero, so this will be the first-time anime series is produced in Spain. The other one is an adaptation of Skam (Shame), the famous format form Norway.
How big is Movistar+’s current budget. How much are you investing in original content?
In original content (fiction, high-end scripted drama) the average annual budget for 2018, 2019 and 2020 is 70 million euros. I am very happy with this figure. Sometimes, having too much money is a problem, as well. You have to have a figure that you really need, and this is a really good figure for our market, so I am very happy.
What is the average budget per episode for your most-popular shows?
We cannot really disclose this figure. What we made already public is the budget for the first season of The Plague - 10 million. So that gives you 1.5 million per episode. I don’t really have an average figure for a series. We just allocate a budget that we think is appropriate to tell the story well. So, we don’t have an average, and even if we had a fixed average series budget I cannot make it public.
What prompted you to allocate such big funds for original content? Only about 35% of Spanish households have pay TV. Do you expect this to change in the next few years?
Well, it depends with what you compare this amount dedicated to original content. Do you compare it with the costs to sports rights, particularly football? Or what do you pay for some of the best international content, like first-window cinema movies. Or you compare with this amount other international companies spend in original programming. Then I don’t think it is really that much. It is the amount of money you need in order to be relevant. Because if you decide to participate in this game of original content, you cannot be irrelevant. You have to invest an amount of money that makes you welcome in that space. Otherwise, in this competitive landscape you are very likely to fail.
We think this market has enormous opportunity for growth (because of this 35%). We now have 4 million subscribers and we think we might achieve 5-6 million in the next 2-3 years. But we have to invest. In Spain, there was lack in original programming in pay TV. The market is based more on sports acquisitions and content from external providers like the big studios. Of course, that is something you have to keep doing. But you need to have an extra leg and that is a bold bet on original programming.
Who are your biggest competitors?
Our direct competitors in Spain are clearly the telcos (Vodafone, Orange) that have the same offer – broadband (connectivity) plus TV. But companies are evolving and tech companies like Google, Apple, Facebook are new entrants in the production of content (Netflix and especially HBO have original content). So, to a certain extent these are competitors as well.
One of the most important questions during your keynote at MIPCOM 2017 was “how can you compete being a local operator with big conglomerates that can write big checks and invest so much in programming?” What would be the short answer to that?
With these companies you have to first decide in which areas you compete and in which areas you collaborate, because they are so big. Second, in order to be relevant in our market, we definitely have to invest in local content, in high-end scripted drama. If you make the right investment, you have a chance to succeed. The big companies have global strategies, which is fine, because probably we can complement each other. It is about how we can have a model that can differentiate us from the others. This is my personal opinion: as long as you are a subscriber of Movistar, then it is also totally fine with us if you become a subscriber of HBO or Netflix. But in order for subscribers to make this decision, you have offer them something that is unique and differentiates you. You have to give them a reason to become your subscribers.
So what is the biggest challenge in creating content for Millennials?
Well, what we are trying to do is to be very authentic and to give them something that is not how media sees them, but to be about how they truly are. And the best thing is to work with them – such as with El Rubius, who has more than 26 million followers on YouTube. He knows his audience very well. That is why we approached him. He is authentic and we rely on him. On one side he is talented, on the other side he knows his audience. Thus, I think we have more chances to succeed in this. And it is the same thing with Skam (Shame). It has been very successful with both young and adult audiences in Norway. And we are bringing this format precisely because we want to replicate this success here. I think what people liked about Skam is that it was very authentic. The key to its success has been that young audiences can relate to the world they feel it reflected in the right way.
What titles have you sold abroad?
We are very happy. We have sold Velvet Collection and La Zona to Beta Film to distribute the series internationally. German pubcaster ZDF is also coproducing La Zona with us and we are very happy with this partnership. The Plague has been sold to Sky Vision and Felix has been sold to ITV Studios Global Entertainment. Comedies Vergüenza (Spanish Shame) and the upcoming Mira lo que has hecho (Look What You’ve Done) have been acquired for distribution by Film Factory. Family drama Gigantes was acquired by About Premium Content. We are happy we have sold our titles to all these big players in the international marketplace.
Your original content is produced in Spanish. What is your strategy for the Latin American market and other Spanish-speaking territories?
Our content can be sold successfully in Spanish-speaking countries, but also in other territories – Italy, Germany, France, even the English-speaking markets. If you have good storytelling with good production value, you have a chance to sell your content all over the place. And the Spanish-speaking audiences, particularly in the US, are very important for us. This can be a great opportunity for us.
A couple of months ago you announced that Velvet Collection has become the most-watched series ever to screen on your platform, beating Games of Thrones. What are your other successful projects?
Yes, the first episode of Velvet Collection has done it. La Zona performed also every well in terms of ratings per our objectives. It has also been a huge success among critics and audiences on social media. The same is the case with Vergüenza (Spanish Shame) – the reviews and comments are very positive.
Which producers do you currently work with?
We have started working with Spanish producers. We are having ideas to start working with producers outside Spain, we don’t want to be limited by the Spanish market. Here in Spain, there is a lot of talent in production, direction, writing, acting, in every discipline. That is why so far we are working with production companies in Spain. Our intention is to start working with companies in Europe, in LatAm, or even in the US, if there is a chance. I think it is just a matter of time to find a partner, or maybe more than one, for the US market to offer our content to Spanish-speaking audiences or even English-speaking audiences that are interested in European fiction.
What is the process of selecting your projects - do you rely predominantly on production companies coming to you with pitches and ready projects or do you do development in-house?
We do both. You have to be proactive and not just to wait to see what the market has to offer. Sometimes you have to go out there and tell the market what you need. We always work with production companies but sometimes we develop a project internally and then we go and find the right partner for that project. And of course, we receive pitches from external companies and we decide what is best for our needs. Our internal team (including business affairs, production and development) is 20 people.
What are your expectations for 2018?
I happen to be optimistic about the future. But that is based more on my character than on facts (laughing). I think in 2018 we can consolidate our strategy. We have started very well, and we will be launching 11 series in 2018. We have been working very hard in the last two years and 2018 will be the year of consolidation of all this work. I think that this will help our company grow and open new markets. ▪
We have already launched three series – Velvet Collection, La Zona, and Vergüenza. In 2018, we plan to launch 11 series. In terms of genres, we have comedies and dramas. Besides the pure drama projects, we have planned 2-3 drama thrillers for 2018 – we have a romantic thriller, a historical thriller, and a family drama with thriller component. We also have two projects dedicated to millennials. One is based on a book written by El Rubius (elrubiusOMG), one of the most famous YouTubers in the world. This is the comic book Virtual Hero, so this will be the first-time anime series is produced in Spain. The other one is an adaptation of Skam (Shame), the famous format form Norway.
How big is Movistar+’s current budget. How much are you investing in original content?
In original content (fiction, high-end scripted drama) the average annual budget for 2018, 2019 and 2020 is 70 million euros. I am very happy with this figure. Sometimes, having too much money is a problem, as well. You have to have a figure that you really need, and this is a really good figure for our market, so I am very happy.
What is the average budget per episode for your most-popular shows?
We cannot really disclose this figure. What we made already public is the budget for the first season of The Plague - 10 million. So that gives you 1.5 million per episode. I don’t really have an average figure for a series. We just allocate a budget that we think is appropriate to tell the story well. So, we don’t have an average, and even if we had a fixed average series budget I cannot make it public.
What prompted you to allocate such big funds for original content? Only about 35% of Spanish households have pay TV. Do you expect this to change in the next few years?
Well, it depends with what you compare this amount dedicated to original content. Do you compare it with the costs to sports rights, particularly football? Or what do you pay for some of the best international content, like first-window cinema movies. Or you compare with this amount other international companies spend in original programming. Then I don’t think it is really that much. It is the amount of money you need in order to be relevant. Because if you decide to participate in this game of original content, you cannot be irrelevant. You have to invest an amount of money that makes you welcome in that space. Otherwise, in this competitive landscape you are very likely to fail.
We think this market has enormous opportunity for growth (because of this 35%). We now have 4 million subscribers and we think we might achieve 5-6 million in the next 2-3 years. But we have to invest. In Spain, there was lack in original programming in pay TV. The market is based more on sports acquisitions and content from external providers like the big studios. Of course, that is something you have to keep doing. But you need to have an extra leg and that is a bold bet on original programming.
Mira lo que has hecho (Look What You’ve Done)
Who are your biggest competitors?
Our direct competitors in Spain are clearly the telcos (Vodafone, Orange) that have the same offer – broadband (connectivity) plus TV. But companies are evolving and tech companies like Google, Apple, Facebook are new entrants in the production of content (Netflix and especially HBO have original content). So, to a certain extent these are competitors as well.
One of the most important questions during your keynote at MIPCOM 2017 was “how can you compete being a local operator with big conglomerates that can write big checks and invest so much in programming?” What would be the short answer to that?
With these companies you have to first decide in which areas you compete and in which areas you collaborate, because they are so big. Second, in order to be relevant in our market, we definitely have to invest in local content, in high-end scripted drama. If you make the right investment, you have a chance to succeed. The big companies have global strategies, which is fine, because probably we can complement each other. It is about how we can have a model that can differentiate us from the others. This is my personal opinion: as long as you are a subscriber of Movistar, then it is also totally fine with us if you become a subscriber of HBO or Netflix. But in order for subscribers to make this decision, you have offer them something that is unique and differentiates you. You have to give them a reason to become your subscribers.
So what is the biggest challenge in creating content for Millennials?
Well, what we are trying to do is to be very authentic and to give them something that is not how media sees them, but to be about how they truly are. And the best thing is to work with them – such as with El Rubius, who has more than 26 million followers on YouTube. He knows his audience very well. That is why we approached him. He is authentic and we rely on him. On one side he is talented, on the other side he knows his audience. Thus, I think we have more chances to succeed in this. And it is the same thing with Skam (Shame). It has been very successful with both young and adult audiences in Norway. And we are bringing this format precisely because we want to replicate this success here. I think what people liked about Skam is that it was very authentic. The key to its success has been that young audiences can relate to the world they feel it reflected in the right way.
What titles have you sold abroad?
We are very happy. We have sold Velvet Collection and La Zona to Beta Film to distribute the series internationally. German pubcaster ZDF is also coproducing La Zona with us and we are very happy with this partnership. The Plague has been sold to Sky Vision and Felix has been sold to ITV Studios Global Entertainment. Comedies Vergüenza (Spanish Shame) and the upcoming Mira lo que has hecho (Look What You’ve Done) have been acquired for distribution by Film Factory. Family drama Gigantes was acquired by About Premium Content. We are happy we have sold our titles to all these big players in the international marketplace.
Your original content is produced in Spanish. What is your strategy for the Latin American market and other Spanish-speaking territories?
Our content can be sold successfully in Spanish-speaking countries, but also in other territories – Italy, Germany, France, even the English-speaking markets. If you have good storytelling with good production value, you have a chance to sell your content all over the place. And the Spanish-speaking audiences, particularly in the US, are very important for us. This can be a great opportunity for us.
La Peste (The Plague)
A couple of months ago you announced that Velvet Collection has become the most-watched series ever to screen on your platform, beating Games of Thrones. What are your other successful projects?
Yes, the first episode of Velvet Collection has done it. La Zona performed also every well in terms of ratings per our objectives. It has also been a huge success among critics and audiences on social media. The same is the case with Vergüenza (Spanish Shame) – the reviews and comments are very positive.
Which producers do you currently work with?
We have started working with Spanish producers. We are having ideas to start working with producers outside Spain, we don’t want to be limited by the Spanish market. Here in Spain, there is a lot of talent in production, direction, writing, acting, in every discipline. That is why so far we are working with production companies in Spain. Our intention is to start working with companies in Europe, in LatAm, or even in the US, if there is a chance. I think it is just a matter of time to find a partner, or maybe more than one, for the US market to offer our content to Spanish-speaking audiences or even English-speaking audiences that are interested in European fiction.
What is the process of selecting your projects - do you rely predominantly on production companies coming to you with pitches and ready projects or do you do development in-house?
We do both. You have to be proactive and not just to wait to see what the market has to offer. Sometimes you have to go out there and tell the market what you need. We always work with production companies but sometimes we develop a project internally and then we go and find the right partner for that project. And of course, we receive pitches from external companies and we decide what is best for our needs. Our internal team (including business affairs, production and development) is 20 people.
What are your expectations for 2018?
I happen to be optimistic about the future. But that is based more on my character than on facts (laughing). I think in 2018 we can consolidate our strategy. We have started very well, and we will be launching 11 series in 2018. We have been working very hard in the last two years and 2018 will be the year of consolidation of all this work. I think that this will help our company grow and open new markets. ▪
