Europe Seeks To Protect Itself From The “Invasion” Of American Audio Visual Platforms

2021-02-20   |   by CusiGO

The dominance of US companies in the streaming business has caused panic in Europe. There are concerns that the domestic industry may be in trouble. In this regard, the government submitted the first draft of a new general law on audiovisual communication in November last year. The new legislation will translate a European directive in 2018 into Spanish law, requiring platforms such as Netflix, HBO, Disney + or Amazon Prime video to fund European films and serials with 5% of Spanish revenue. The measure aims to equate large streaming media companies with TVE or private channels (mediaset, atrismedia), which have already contributed to national audio-visual production. The bill also includes another measure taken by Brussels to protect the old world’s seventh art: VOD will have to use 30% of its catalogue for European works.

Experts believe that there is room for development of alternative platforms outside the United States. In his view, the key to success is specialization. Spain is an example of providing niche products. The dream of movie lovers has come true: film. Specializing in film and food series, including jewelry for gods and people or tourists, to name just two of the 15000 Title catalogues, this is the largest subscription catalogue in Europe, offering added value: a bet beyond entertainment and into the cultural world.

“In the past year, we have had a perfect storm: a growing market, a technology that changes the way people consume content, and an epidemic that forces people to spend more time at home. All of these accelerate a predictable change… Our impression is that new platforms will still emerge, because some big producers want to get on the wagon and provide their own VOD services. Since then, we believe that there will be a process of centralization and specialization. Some larger services may merge and absorb some smaller services. Jos é Antonio Luna, film’s chief operating officer, estimates that GM’s offer will eventually peak, with the only chance to survive and grow through niche markets.

Ram ó n garnica, partner of Nazca capital, the company’s controlling shareholder, puts forward a similar idea: “as Disney +, HBO Max or peacock did in 2020-2021, we believe that some new platforms will continue to emerge, mainly in the mainstream (generalist) field. In addition, with the development of the market, we believe that the trend of cross platform (the same user subscribes to multiple platforms) will be consolidated, which will help to increase the share of medium-sized platforms and position them to provide services similar to Great American platform. ”

Filmin is a pioneer of other initiatives in Spain, such as premiering on the Internet and movies. This hybrid model seems to be an innovation, because the coronavirus shut down cinemas. It also promoted the Atlantis Film Festival, Spain’s first online film festival.

As for the hypothetical risk of a bubble in the streaming media market, garnica denies the biggest risk. “We don’t think it will turn into a bubble, we expect the market to continue to grow at a significant rate in the next few years.”

As for audience saturation or fatigue, Luna admits it’s a possibility. “Yes, supply may have a saturation effect. The consequence is to merge on the one hand, and to build aggregation services on the other. It’s a low margin business that requires a large number of subscribers. So far, the goal of these strategies is to get so many subscribers that once they reach the upper limit, they will have to focus on making them profitable. ”

“The foundation of the streaming media market is strong, both in terms of the gradual increase in its share of total audio-visual consumption and in terms of increasing its penetration into the population,” garnica said. Nazca Capital Partners concluded: “for the medium-term survival of the platform, a clear and differentiated positioning will become increasingly important, which will help produce a cost-effective, self-sufficient model without the need for increasing external financing.”. He believes that the key to avoiding customer saturation is “high quality editing methods and prudent content management.”.