The Spanish video entertainment market has enjoyed a rapid reversal of fortune, with record-breaking levels of spend expected for 2021, once final figures are in. That’s according to a new report from Futuresource Consulting, which singles out SVoD as the key driver, assisted by YoY growth in Pay-TV and Box Office.
“2021 was a whirlwind year for the sector,” says Morris Garrard, Market Analyst, Futuresource Consulting. “Our forecasting shows the pandemic helped push total consumer spend to nearly €3.5 billion in 2021. That’s 19% growth from 2020, and 8% growth compared to 2019. It’s a particularly impressive performance considering box office remains at a third of 2019 levels.”
SVoD players have been well-placed to benefit from changing consumer behaviours stemming from the COVID-19 pandemic. As a result, SVoD spend has more than tripled in Spain since 2019, with Futuresource expecting revenues to exceed €1 billion for the first time in 2021.
“The international players have been leading the SVoD charge,” says Garrard, “and it’s been a double-pronged attack. In a shrinking world, not only have they benefited from the global publicity of their mainstream titles, they’ve also focused in on improving their local offerings. This strategy has been amplified by the significant global appeal of Spanish language content.
“Netflix remains the dominant player, and is one of the world’s largest investors in original Spanish content, with over 50 locally produced titles. We expect the SVoD colossus to have accounted for more than 40% of total subscriptions in Spain at the close of 2021. By 2025, almost half of all households in Spain will have at least one SVoD subscription, with our forecasts pointing to consumer spend in excess of €2 billion.”
Pay-TV revenue made a slight recovery in 2021, driven by the return of live sports, which has brought premium paying customers back to the market. However, Pay-TV households are in long-term decline as the growing SVoD market impacts the sector. This downward pressure is being counteracted by the main Pay-TV players, who are seeking to monetise their existing user bases more efficiently. Futuresource expects this to result in a stabilising of revenues throughout the forecast period.
“IPTV remains the most popular linear distribution method in Spain,” says Garrard. “It accounts for nearly three in every four Pay-TV households, and is led by Telefónica’s Movistar service. MásMóvil, Spain’s fourth largest telco, entered the Spanish Pay-TV market for the first time in April 2021 with the launch of its Agile TV Premium business.”
Box office experienced a small recovery in 2021, helping to push the overall video entertainment market to new highs, yet theatrical revenues remain more than 65% lower than 2019. And while Spain only had one initial lockdown, from March to June 2020, most cinemas remained closed until Q2 2021 due to a lack of content, strict sanitary obligations and high rates of infection. However, Futuresource expects a healthy box office recovery in 2022, with forecasts that show a return to almost 90% of 2019 figures.
“Moving forward, our projections paint a healthy future for the overall video entertainment market in Spain,” says Garrard. “Spend will grow at a CAGR of 9% between 2021 and 2025, to reach almost €5 billion by the end of the forecast period.”