Frontier Economics for Netflix: "Stimulating screen production investment "

“Spain’s plans to become a hub for production have been accompanied by a period of strong sector growth.”

“Spain has adopted an ambitious and outward looking plan to make the country an AV hub, building on its strengths as a country with strong incentives for international and domestic productions, a highly skilled workforce, attractive shooting locations, and a supportive regulatory and recently strengthened incentive framework.”

“Over the period 2014-2019, AV sector revenues in Spain have grown at double the rate of other European countries and they are expected to continue growing at 5.1% until 2026, above the global average rate.”

“Spain offers generous foreign automatic production incentives. These include a 30% rebate up to €1mn eligible spend and 25% after that”

“Between 2014 and 2019, the sector revenues grew at levels (11.4%) double those of other European countries, including Germany (4.2%), France (3.9%) and Italy (2.9%).”

“Currently, Spain ranks 12th in the world in AV industrial revenue, which is expected to continue growing at 5.1% until 2026, above the global mean rate.”

From a strictly economic perspective, and although those are not interchangeable policy tools, production incentives play an increasingly valuable role in encouraging additional investment in local films and TV series. 

This report finds: 

• The case for any policy intervention needs to be examined carefully in the context of a broader ecosystem. Introducing new measures should require a thorough impact assessment to evaluate the need for intervention and to fully understand any distortionary impacts to the audiovisual market. 
• Applying restrictive policies in the hope that they increase the creation of content (in terms of volume and/or investment) can in fact lead to the opposite outcome.  
• If policy makers wish to increase local screen production activity, they should consider automatic production incentives for both domestic and international productions, since they are associated with higher levels of long-term investment.

Click on “View more” to read the full report.