Just a couple of years ago Telefónica was happily aggregating content from traditional sources to entertain subscribers in its home market, but in January this year that all changed.
In the boldest move yet from a European telco, the company said it wanted to become the world’s leading provider of Spanish content as it unveiled plans to make four original drama series this year and 10 in 2018.
These include fashion drama Velvet Collection, eco-crime thriller La Zona, a comedy called Vergüenza, and La Peste – a thriller set in a bubonic plague-threatened Seville.
The man entrusted with delivering this is Domingo Corral, Head of Original Programming at Movistar+.
Speaking from the TV industry trade show MIPCOM, where the operator is screening two shows from its 2017 roster, Corral (second from left) tells European Communications: “We are very serious about TV.”
Movistar, which saw the number of pay TV subscribers fall from 3.75 million in June 2016 to 3.67 million in June this year, launched Velvet Collection three weeks ago.
Former Turner Broadcasting System exec Corral says he is “very satisfied” with the attention premieres of La Zona and Vergüenza have received at MIPCOM.
“It's very difficult to get attention with so many shows being released every year,” Corral adds.
“We have got attention [here] so I have no complaints.”
Indeed, he claims another speaker - Jane Millichip, Managing Director of Sky Vision, the production and international distribution arm of Sky – said after having watched La Peste, which is slated to debut in early 2018: “Making good TV is no longer good enough. Now you have to make excellent TV.”
Corral says he felt “very honoured and very proud” on hearing these words.
But how does a telco go from offering broadband and bundled TV offerings to producing four ambitious dramas in a few short years?
As Proximus’ Head of Content Stephanie Rockmann said earlier this year, the Belgium incumbent is a telco, not a mediaco.
Buy-in from the top is key. “We have been given the time, the resources and the trust to develop the content,” Corral says.
“Production is always challenging but I have felt a lot of support and understanding from Telefónica.”
He adds: “It was clear we had to have something that was unique to us and we thought that original content could be very relevant.”
The operator announced a step-change in its approach to content when it spent over €700 million on acquiring broadcaster Canal+ in 2015.
Adding it to Movistar’s existing assets, it was relaunched as Movistar+ the same year.
Somewhat surprisingly, Corral says it is “difficult to tell” whether the push into original programming could have been done without the Canal+ acquisition.
The idea for La Peste was already underway, he says, and the acquisition “reinforced” this strategy.
“Creators and producers are key,” Corral says.
Citing brothers Jorge and Alberto Sánchez-Cabezudo, creators of La Zona, he adds: “The projects we have chosen are ones that creators truly believe in.”
Alberto worked on Pedro Almodóvar’s Bad Education and La Zona is something the brothers “have been trying to do for last 6-7 years,” Corral says.
“It’s not something they do for commercial reasons. They have a story and they want to tell it in a certain way.”
Underlining the shifting sands of the TV industry, it is fascinating that they have found a home for their pet project in a telco.
Corral says: “We’ve taken risks – we don’t want clichéd shows, we don’t want formula, predictability...we want to break all that.
“That has been a challenge – how much can you risk to make a show that is unique but also commercial?”
Whether or not Telefónica can be viewed as successful will become clear early next year, when the operator releases its financial results for Q4 and we can see how many subscribers have been swayed to sign up.
But beyond a growing audience, what will success look like to Corral?
“It’s a combination of audience, reviews, recognition, loyalty...and reducing churn is critical,” he responds.
If we leave to one side the delicate matter of the Harvey Weinstein sex scandal, the elephant in the room here is Netflix, and a growing band of similar internet TV companies.
This interview takes place just after Netflix announced it had added over 5.2 million customers in the three months to 30 September and plans to spend $7-8 billion on original content in 2018.
Given its own focus on original programming, it is understandable that Telefónica has chosen not to sign on the dotted line for a distribution deal with Netflix.
But with The House of Cards producer now available to Spanish consumers how is Movistar+ going to respond?
“It’s difficult to tell, it’s likely we will see a scenario where consumers will subscribe to Movistar+, Netflix and HBO,” Corral says.
“I have a lot of respect for Netflix and HBO is an inspiration but if subscribers want to watch high-end drama in Spanish then we are the only destination in my humble opinion.”
It is a bold claim and one that will be tested over the next few years.
Should Netflix decide to compete, it would almost certainly begin to push up the price that Corral’s cherished local creators can ask for when selling rights.
“It’s a potential scenario,” he admits.
Telefónica committed €70 million to produce the four shows it has done so far but is not solely relying on subscribers for a payback.
Part of Corral’s presence at MIPCOM is selling the series to distributors.
The operator signed a deal with Film Factory Entertainment, the biggest film sales agent in the Spanish-speaking world, to distribute two of its series prior to the show.
Corral has a small team of 20 people working with him on development, production and business affairs.
He describes himself as “a content person not a telco person” and admits he would be “completely useless” to Telefónica should they decide to cut their losses on TV.
Given the telco is just embarking, publically at least, on its TV transformation, Corral will be around for a while.
He hopes the shows he is nurturing will be too.
Telefónica says it plans to make the series available to its opcos in Latin America in the future but will not be drawn on whether it will replicate the Movistar+ strategy elsewhere across its footprint.