Report identifies huge ‘knock-on effect’ for international productions in Spain

SAN SEBASTIAN — Released Sept. 21, Netflix’s latest data dump for the first half of 2024 estimated that non-English stories were “massively popular,” making up an early third of all viewing. Netflix said Spanish titles led the way, listing “Society of the Snow” (104 million), “Berlin” (49 million), “The Asunta Case” (31 million) and “Raising Voices” (25 million).

It is no surprise then that, according to a report this month by the European Audiovisual Observatory, Spain, with €1 billion, will rank second in Europe (after the UK) in 2023 for global investment in original content by streaming services.

A report presented at the San Sebastian Film Festival on Sunday once again questioned estimates of the huge amount of money flowing through the Spanish film and television industry.

The report of the Spanish Film Commission, produced in collaboration with Profilm, the Spanish Association of Film Producers, by Olsberg SPI, entitled The Economic Impact of International Productions in Spain, is the first study of the overall economic impact of foreign productions made in Spain.

It is based on data for 165 productions that benefited from Spanish tax breaks for international productions shot in Spain between 2019 and 2022.

These productions contributed at least €1.32 billion ($1.47 billion) to the Spanish audiovisual economy during the period, which in turn generated an estimated at least €1.8 billion ($2.4 billion) contribution to the gross value added (GVA) of the national economy.

GVA takes into account “indirect support, such as a dry cleaner working in the costume department, and it creates impact, such as some crew members going into town after a day of filming and spending money at a restaurant or coffee shop,” said Marta Moretto, a consultant at Olsberg SPI.

As Olsberg SPI Managing Director Leon Forde added, every euro invested in the sector through international tax incentives increases gross value added (GVA).

“This is because the economic impact of these productions is not limited to direct expenditure within the strictly audiovisual industry, but extends in an extremely broad way to the entire national economic fabric. The analysis identifies that a significant share of production expenditure is allocated to sectors outside the audiovisual industry,” commented the report’s executive summary.

Manufacturing created or maintained an average of 7,080 full-time equivalent (FTE) jobs per year across the Spanish economy between 2019 and 2022. Of these jobs, around 1,300 were directly generated by manufacturing. “The remaining 5,780 jobs were supported in the supply chain and the broader economy through the impact of spending on employee compensation,” the summary noted.

The total cumulative compensation of employees who worked on international productions covered by the incentives was €989.9 million ($1.1 billion) – 55% of GVA. The lion’s share of this amount also went to “indirect and induced impacts.”

Analyzing spending on big-budget films, the report estimated that 74% of below-the-line production spending went to other sectors, such as construction, hospitality, transportation and location fees. “This indicates that audiovisual production has a much broader economic impact than might be expected, benefiting a variety of sectors of the economy.”

The boom in Spanish audiovisual production “is not only explained by traditional characteristics or new global trends, such as the growth of content production for streaming platforms, but also by the adoption of political initiatives and government support aimed at developing the sector,” the report concluded.

“Spain is a really dynamic market and certainly one of the leading ones in Europe in terms of its strong manufacturing market, talent and infrastructure,” Forde said.

The funding for the report was welcomed during a presentation on Sunday at the San Sebastian Film Festival.

“This is not a success for the government of the sector, but for the entire Spanish society. We are achieving that the audiovisual sector is becoming a real engine of industrial growth and job creation,” said María González Veracruz, Secretary of State for Telecommunications and Digital Infrastructure.

“This study will change our organization and the way Spanish society perceives the audiovisual sector,” agreed Carlos Rosado, president of the Spanish Film Commission.

The next study should focus on the impact of the Spanish audiovisual sector on the country’s economy, said Ignasi Camós, managing director of the Spanish film agency ICAA.

More coming soon.