From Netflix to Movistar+: How Subscription Video-on-Demand Services Have Transformed Spanish TV Production

Subscription video-on-demand (SVOD) services are in a growth phase in Europe. A variety of different platforms are increasing their market penetration while boosting their in-house production to retain subscribers and conform to new European audiovisual regulations. In this essay, we compare the impact of two services—Netflix and its Spanish competitor Movistar+—on Spanish television's local production culture. Spain is a particularly important context to track and analyze because it is becoming a popular production hub for transnational operators. Notably, Netflix opened its first European production hub in Madrid in 2019.

Spain's television fiction industry is highly developed. Since liberalization in the 1990s, its production market has become one of the most competitive in Europe.¹ Despite the significant presence of foreign shows on broadcast television in Spain (mostly programs imported from the United States and dubbed into Spanish), local audiences still prefer the domestic productions that are commonly shown in prime time. Consequently, Spanish producers focus on creating content suited for this time slot.² Yet the emergence of free and subscriber-funded internet-distributed television services in Spain has significantly increased the amount of television production in the country while also changing the dynamics of Spanish television production more generally.³

The two most popular subscriber-funded television services in Spain are Netflix and Movistar+.⁴ Accessed by 2.2 million households and reaching around 13 percent of national households, Movistar+ was launched in July 2015 by the telecommunication company Telefónica. The service was formed through a merger between the pay-television channel Canal+ (distributed via satellite) and Movistar TV (originally distributed via broadband connection). Movistar+ thus became the video-on-demand service within Telefónica's customer offering. Netflix arrived in Spain in October 2015 and became the first foreign SVOD platform available in the country.⁵ As of 2018, there are an estimated 2 million Netflix households in Spain, reaching around 12.5 percent of Spanish households.⁶

As these figures suggest, both services have achieved a similar level of market penetration, though with quite different pricing structures. The basic Netflix package costs eight euros per month. In contrast, Movistar+ was originally bundled with other Movistar telephony and internet services, costing sixty-five euros per month. Recently, Movistar changed its strategy and announced that Movistar+ will also be available as a stand-alone over-the-top (OTT) service called Movistar+ Lite, also costing eight euros per month. This new, more competitively priced Movistar+ stand-alone service was launched in June 2019.

Compared to the traditional pay-TV services that had operated in Spain, Netflix's rapid penetration demonstrated that there was a window of opportunity for an on-demand service at a reduced cost. The flexibility in the sign-up process, the personalization, and the simple use of its interface contributed to Netflix's appeal for the Spanish consumer. Moreover, the changes introduced by Movistar+ in its model reflect Netflix's influence on, for example, the price and the content offered, particularly when it comes to the production of exclusive programs. There are also other similarities between the two services. For example, both Movistar+ and Netflix release all the episodes of their in-house productions at once; some programs are available to download and view offline; and users can stream content on multiple devices.

Interestingly, in December 2018, the two companies opted to establish an alliance rather than to compete directly for customers. Movistar announced it would offer an integrated Movistar+ and Netflix bundle, priced slightly cheaper than two separate subscriptions.⁷ For Movistar+, this pact facilitates access to internationally acclaimed Netflix series (e.g., Stranger Things, 2016–) for its subscribers and strengthens its already rich audiovisual catalog. This happens in a context in which Movistar+ has lost access to the catalog of programs from operators such as HBO and Starz, which launched their own video-on-demand services. For Netflix, this partnership helps expand its penetration in Europe and in Spanish-speaking markets, where Movistar+ is popular. The growth of...