The Spanish video market has witnessed a polarisation of fortunes in 2020. While many segments have been heavily impacted, others have seen their audiences expand due to stay-at-home measures and changing consumer attitudes towards entertainment. This is according to a Video Insights report from Futuresource Consulting, which shows consumer spend will grow by 11 per cent per year, on average, between 2019 and 2024.
“We’ve seen a clear reshaping of the SVoD landscape this year,” says Joanna Wright, Market Analyst at Futuresource Consulting. “At a time when the Spanish SVoD market was already in rapid growth, consumer confinement has created ideal conditions for those households who were reluctant to try SVoD services. And it’s not just a fleeting phenomenon. We expect this new-found interest in SVoD to persist over the long term.”
A Market for SVoD Growth
In 2019, just 20 per cent of households in Spain consumed SVoD. Lagging far behind France and the UK, at 31 per cent and 50 per cent saturation respectively, the Spanish market has plenty of headroom for growth. Spend more than doubled in 2019, and Futuresource expects spend to double again in 2020. With subscriptions on track to reach 10.2 million by the end of the year, the market is stepping up a gear.
Netflix Domination Key to Sector Growth
“For the vast majority, Netflix is the gateway to SVoD,” says Wright. “Like so many other territories, Netflix is key to the growth in Spain and continues to dominate, with no signs of slowdown. But Netflix is far from the only one in town, and SVoD households in the region now subscribe to an average of 1.7 services. The growing presence of Amazon Prime and HBO España, along with the launch of Disney+ and Apple TV+, is taking the market to another level.”
Beyond the big five, there’s also an upsurge of niche SVoD services, all vying for consumer attention. These include specialist Spanish services such as Filmin, Flixolé, and Rakuten TV, StarzPlay and sports service, DAZN. Telcos have also played a key role in driving growth. They’ve built partnerships and are bundling offers, promoting the SVoD services and making it as easy as possible for consumers to sign up by integrating SVoD services into their Pay-TV packages.
Moving forward, as a direct result of Covid-19, SVoD uptake and consumer spend is expected to remain higher than previously anticipated across the entire forecast period out to 2024.
TVoD and EST in Ascendance
Lockdown has also benefited the digital transactional market, with TVoD and EST both trending significantly higher than at the same point in 2019. Some studios even witnessed a year’s worth of transactions in six months.
“The launch of Amazon’s transactional digital service at the end of April provided a further boost to both TVoD and EST segments,” says Wright. Our recent Living With Digital survey suggests that awareness of the transactional feature is high in Spain, at 75 per cent of Spanish Amazon account holders.
However, with the theatrical slate limited during the pandemic, it is expected that the gains from the first half of 2020 will be softened by the lack of home video releases in the second half of 2020. Aggressive promotions and wider uptake of lower priced catalogue titles will lead to a more muted revenue performance in 2020, with EST and iVoD expected to grow 15 per cent and 7 per cent respectively in terms of spend.
Despite the market challenges, opportunities abound, and total video entertainment spend will continue to surge upwards, with Futuresource predicting the market rising from just under €3 billion in 2020, to €4.5 billion in 2024.