Netflix Spain celebrates 5 year anniversary: this is how it managed to banish the culture of 'everything for free' and why local content is the key to loyalty to the audience - This month marks five years since Netflix's arrival in Spain. The famous company of cats arrived in 2015 in a country with an audiovisual economically decimated by piracy in the midst of a widespread discourse that they would not succeed in seducing the digital user. Who would want, in a place with our history, to pay for something they could have for free? Netflix managed to demonstrate in record time that it was possible to normalize payment for content. And along the way he has managed to capitalize on a fertile creative fabric, globalizing the audience of Spanish productions and promoting their success in all corners of the planet.

As a digital service, Netflix was born with the same model it had used for sending DVDs to homes, streaming in subscription model based on third-party catalog. But it did not take long to implement a change of strategy. In the early years of the 2010s he created the original content division and, in parallel, began to allocate practically all the profits generated in the domestic territory (USA) to its international expansion. The decision caused some surprise. No one understood what could lead to a business that had consolidated quickly and very successfully in the US, to risk the profits to establish itself in other territories.

But Netflix seemed to have it clear.

That brought them closer to what they thought would make a difference: global leadership in a sector (SVOD) in which, at the time, there was no competition. In addition, the multimillion-dollar investment in original content development, which had started with excellent results, laid the groundwork for gradually easing total dependence on third-party content. As Ted Sarandos said in 2013:"the goal is to become HBO faster than HBO can become us." This is how expansion and original content began to weave the network on which to build a truly global market (and audience) for their offering.

Netflix's European landing took place, in a staggered manner, between 2012 and 2015, starting with the UK, Ireland and the Nordic countries. The decision seemed logical. These markets were especially fertile for the development of a local delegation: a good implementation of broadband internet (something of paramount importance, as they had been taught by their irregular landing in Latin America), a large potential audience and few competitors. The same reasoning in reverse explains why Southern European countries were the last to welcome Netflix. The turnstiles, however, would not take long to change.

At the present moment no one doubts the importance that the production of original content has for Netflix. Its catalogue is increasingly filled with productions from countries that were previously part of a secondary content market, with little commercial success beyond their respective countries. Netflix played it safe, as it was able to see the potential of those stories from the licensed catalog long before it was encouraged to produce content in the same vein. Betting on its own storytelling, proximity and, thanks to its distribution model, with great global potential, has had significant advantages.

Netflix Spain celebrates 5 year anniversary

On the one hand, it has allowed them to balance the overrepresentation of American content. It has also given them more autonomy (eliminating the problems arising from a license-only catalog), which has helped to cushion the impact of the Streaming Wars (which has meant the loss of key catalog, which companies have decided to exploit individually or license by offering millions). But above all, it gave them the opportunity to strengthen their relationship with customers. This content of proximity, meaningful and culturally more relevant is one of the cornerstones on which they are building a hyperfidelized audience, the one that will pay the subscription every month because it sees on Netflix an essential service. Nowadays retaining customers is as important as getting new registrations. More even: the truly committed customer is the one who, in the end, gives stability to the volatile subscription business (which is easy in but also easy out).

The starting premise was simple: if the historical hegemony of Hollywood content had been made possible by its mass distribution, Netflix could capitalize on its global rollout and deep audience knowledge to endow less mainstream content with"travelability." In the end, proximity to each country, although it seems contradictory, has been the gateway to boost its popularity beyond borders. The presence of a new type of content, which organically flows into the culture, history and production system of each of the territories demonstrated its ability to seduce audiences around the world.

Manolo Caro, who created for Netflix the House of flowers and someone has to die, has experienced firsthand the growing audience demand for such stories. "It's not that I now seek to make more universal stories: on the contrary. I think the more specific your story is, the more opportunity it has to live in other universes. What for me has changed is to delve into issues that, even if they talk about realities in a small city in Mexico, or in a very specific colony in Mexico City, or in a very specific year (like 1954 in Spain), this echoes in problems that are happening now or in issues that are on the table in other parts of the world."

The very overcoming of generalist content and the ability of the company to identify the same niches in different countries is what has enabled greater customer permeability to other types of stories. That is why Caro assures that it is essential to bet on originality and honesty. "If we don't talk about things that matter to us and things that concern us, it shows. I think the important thing is to make your voice sound louder and louder and make the project that you have on the table something very authentic."

Spain was not part of a kind of master plan in European expansion. Nothing did augur a few years ago, as Diego Ávalos, vice president of original content of Neflix in Spain, assures that Spanish fiction was going to experience similar levels of popularity. The germ was there, no doubt, but it hatched unexpectedly.

The potential of Spanish television series began to manifest itself with the first additions of third-party content to its catalog and became evident thanks to the resounding success of La casa de papel, a production by Atresmedia that became fiction in Spanish Most Viewed in the history of the platform (also here, since it was opened to a public that had not seen it in its broadcast on Antena 3). This fact led to the purchase of the rights to produce more seasons, a preferential acquisition agreement of series fiction with the label of the house and the signing of its creator, Álex Pina, to produce content for them.

The productions that followed the paper House offered them more proof of the ability of the content produced here to generate talent (the "Netflix celebrities") and how seductive it was to capitalize on their simple presence other formats. With elite, for example, they demonstrated the latter, as well as their hook in such a difficult territory as the North American.

In the opinion of Emma Lustres, producer and co-founder of VACA FILMS (the disorder you leave) this is the best proof that "Netflix has internationalized Spanish audiovisual as never before. Historically, the consumption of non-US content had virtually no diffusion beyond its own territory of origin. It is curious, that a company originally from Silicon Valley has made productions originating from so many countries around the world travel."

The Netflix we know today is the result of a growing economic investment (spending on global content of the company has gone from 12,000 million in 2018 to more than 17,000 by 2020, according to estimates by BMO Capital Markets), a platform of global distribution, an encyclopedic knowledge of the preferences of your audience and its powerful recommendation engine, capable of isolating the potential audience wherever you are and show you the program in the most effective manner possible.

In Spain, the increase in the number of productions has been evident. In 2016 he debuted with two original contents (7 years and the girls of the cable). In 2020 he has released 17, including series, films and anime. They currently have offices in Madrid (with a staff of more than 70 workers, half of them women) and have opened their first European production center in Tres Cantos.

That in 5 years Spain has gone from being in the queue to being a key territory of the company is the result of having put all these means at the service of a formula of potential success. Good stories, talent to tell them and the means of production necessary to make it possible. This reflection is not inferred from any objective figures (such as a growing market share or an exponential increase in subscribers, information that the company does not offer). But its implementation, by itself, accounts for its ambitious plan for the Spanish audiovisual sector.

The strategy is also closely aligned with the new EU-approved Audiovisual Media Directive, which obliges all streaming content providers to make 30% of their content European. Although the directive has not yet been transposed to the legislation of our country, investing in Spanish content is a future bet that will allow them to meet a double objective, normative and business.

Since its beginning of activity in Spain, Netflix has released 32 original titles in our territory (produced or licensed exclusively, 46 counting new seasons) thanks to the collaboration with more than 20 Spanish producers among which are, Sosp others, Sospecha Films (El Inocente, Alma), Bambú Producciones (Las chicas del cable, Jaguar or 800 meters), Vancouver Media (La casa de papel, Sky Rojo), Zeta FicciónTV (Élite, El Vecino) or VACA Films (El desorden que dejas). Netflix has not only pushed projects. Work dynamics have also changed.

Producer Emma Lustres points out that " perhaps the most differentiating thing is that the perspective increases because already of origin, you are producing so that it can be seen in more than 190 countries of the world. My impression has always been that we, as producers, were ahead of our customers and were the ones who pulled the production. The first months working with Netflix were adaptation because they were ahead, they are a perfect human and professional team, it may seem overly complacent on my part, but it really is not. They are a team."

The creators, far from feeling engulfed by this giant, seem to celebrate the opportunity that Netflix provides to open market to its product, even if it remains captive within the platform. "I, for example, came from making successful projects in my country, in Mexico, but very rarely they had premiered outside Mexico" says Manolo Caro. "When I started my relationship with Netflix this has been increasing very noticeably."

Despite the great uncertainty that it plans on the sector in the wake of the COVID-19 crisis, the company has not taken long to resume activity to feed a growing demand from a consumer that has seen its leisure options drastically reduced. Within the original production made in Spain for 2021, seven projects have already been advanced, among which are three fiction series such as Feria, el tiempo que te doy e Idolo; a documentary series, 800 meters; two films, the documentary The Wanninkhof case and the thriller The Beast; and a stand up comedy special by Dani Rovira, hate.

Netflix is well aware that it has raised the level of the arena it reached five years ago. Today there is much more competition that, like them, has known how to see the potential of local content production. That is why it is more important than ever to retain the subscriber, rewarding each viewing with the best entertainment experience possible. With each production they seem to learn a little better what the audience wants, the value of upcoming stories that deal with universal themes, the characteristics of the characters that interest, the content whose individual impact drives us to talk about them with others, which manage to filter into conversations and connect us with others.

Netflix Spain celebrates 5 year anniversary

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