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How Madrid is fast becoming a booming TV series production hub

Media firms are racing to set up television production centres in Madrid following the runaway global success of Spanish series such as Netflix's crime caper "Money Heist".

How Madrid is fast becoming a booming TV series production hub
La Casa de Papel is Netflix's most watched non-English language series. Photo: Netflix

Spanish multimedia group Mediapro and its foreign rivals Viacom and Netflix have set up shop or increased their activity in the Spanish capital to meet booming demand for content sparked by the rise of subscription video streaming services.

During a recent visit to Mediapro's studios north of Madrid, film crews were busily recording a dialogue between two actresses on a set depicting an upscale law office.

The scene will be used in a series that the company is producing for Spain's most watched television channel, Telecinco.   

The company used to produce “two or three” series at that studio per year, now it makes 10 — an “unimaginable” amount just a few years ago, said Javier Pons, who is in charge of television production at the firm.

Mediapro is also preparing a sitcom for HBO, which has a streaming service that competes with Netflix, as well as “projects” for other platforms that it could not discuss.

Producing series for a streaming service requires the “narration to be a bit different, so viewers get, in a way, addicted to the content” since users of the platforms tend to binge-watch shows, said Mediapro content director Javier Mendez.

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Photo: Netflix

'Much cooler'

Madrid's status as a new hub for TV series production was thrown into the spotlight when Netflix in April opened its first European production centre in Tres Cantos in the outskirts of the city.

The third season of “Money Heist”, which Netflix will release worldwide on Friday, was filmed in this sprawling 22,000-square-metre (237,000-square-foot) complex.

The Emmy-winning series about a long-prepared, multiple-day assault on the Royal Mint of Spain is Netflix's most watched, non-English language show.   

Initially broadcast on private Spanish TV channel Antena 3, the US streaming giant bought the series in late 2017 and re-released it worldwide, turning the show into a global phenomenon.

The unexpected success of the series weighed heavily on Netflix's decision to set up shop in Madrid, said Elena Neira, a specialist in new media at the Open University of Catalonia.

And the success of other Spanish series on streaming services such as “Elite” about teens at an exclusive private school in Madrid has led Spanish producers to set their sights higher, she added.

“For many people in Spain, who suddenly see Spanish content associated to a powerful brand like Netflix, it becomes much cooler than when it is broadcast on Antena 3,” Neira said.

The number of TV series made in Spain rose to 58 last year from 38 in 2015, according to a PricewaterhouseCoopers report.    

The sector contributed 655 million euros ($738 million) to Spain's economic output in 2018, up from 429 million euros in 2015, it added.    

PricewaterhouseCoopers estimates that Spain could produce 72 series a year once the sector is “consolidated”, which would generate over 18,000 direct and indirect jobs, compared to less than 10,000 in 2015.

Spanish content in demand

Media giant Viacom, which owns Paramount Pictures and TV stations such as MTV, announced in April that Madrid would be one of its hubs for the creation of Spanish-language content.

“I think there is at the moment a significant tendency to consume Spanish content, and in languages other than English, which boosts the opportunities to create here for the foreign market,” said Viacom director of content for Spain and Portugal, Laura Abril.

The subscription streaming service market will grow faster in Spanish-speaking nations between 2018 and 2022 than in Britain or the United States, according to a forecast by PricewaterhouseCoopers.

Spain, which has a long history of film and TV production, is taking advantage of the opportunity.

“We focus on the new platforms but all of this crystalised before,” said Patricia Diego, a TV production professor at the University of Navarra.   

She pointed out that “Money Heist” creator Alex Pina had been making series for Spanish TV stations for the past two decades.   

Spain's relatively low salaries make it competitive to produce shows in the country, Diego added.

The sector is also getting a boost from new European Union rules due to come into effect in 2020 which will require streaming video providers like Netflix and Amazon Prime Video to dedicate at least 30 percent of their catalogues to European content.

READ MORE: Nine incredibly addictive television series from Spain

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TAX

Online streaming giants face rise in tax to fund Spanish productions

Spain is preparing legislation that would impose a 5.0 percent tax on streaming giants like Netflix with the funds used to boost Spanish cinematic production, the government said on Friday.

Online streaming giants face rise in tax to fund Spanish productions
Founder and CEO of Netflix Reed Hastings speaks during a keynote speech at the Mobile World Congress in Barcelona on February 27, 2017. LLUIS GENE / AFP

The draft law, which would tax online entertainment platforms on the basis of earnings generated in Spain, seeks to bring existing legislation “in line with the reality of the market where new audiovisual players have multiplied as a result of new technologies”, an economy ministry statement said.

The reform is part of the government's Digital Spain 2025 strategy, one of whose aims is to improve the country's appeal as one of the most attractive locations for shooting films and series.

The text “extends the obligation to fund European audiovisual production to those providers offering services in Spain even if they're not based there” in a nod to platforms like Netflix, HBO, Disney and Amazon Prime Video.

“Providers with a turnover of more than 50 million euros generated from services in Spain must allocate 5.0 percent of these revenues to finance European audiovisual works or as a contribution to the Cinematography Protection Fund,” it says.

Of that amount, 70 percent must be used to finance audiovisual works by independent producers, and a minimum of 40 percent must be used to fund independent films “in any of Spain's official languages”.

For those earning under 50 million euros, that 5.0 percent can be diverted into buying the rights to finished European productions, but at least 70 percent must go towards works by independent producers.

Those earning under 10 million euros in Spain will be exempt from the proposed tax.

Global giants such as Amazon, Google and Netflix often pay very little tax in nations where they are not physically present, presenting a major challenge for many countries.

Early last month, the Spanish government gave final approval to a 3.0 percent tax on revenues generated by digital giants such as Google, Apple, Facebook and Amazon which will come into effect within three months.

It will apply to all internet giants with annual global sales of over 750 million euros and 3.0 million euros in Spain.

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