Hollywood studios have warned that Spain could become a 'non viable market' for them because of movie piracy. “People are downloading movies in such large quantities that Spain is on the brink of no longer being a viable home entertainment market for us,” Michael Lynton, chairman of Sony Pictures Entertainment, told the Los Angeles Times.

Sales and rentals of DVDs have plummeted in Spain as high-speed broadband has grown and downloading with it. Spending on DVDs is only 10 per cent of the level in the UK or Germany and 60 per cent of Spain's rental shops have closed in recent years.

“It is very sad and very shameful for Spain that we should reach the stage where companies are thinking of leaving,” said Octavio Dapena of the Spanish film rights association Egeda.

Music rights group Promusicae, said: “The statistics show that 30 per cent of the Spanish population uses file-sharing sites, against an average of 15 per cent in the rest of Europe.”

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