Spain imagines service with VOD, more

Economically priced platform currently has 8,000 subs

By EMILIANO DE PABLOS

MADRID -- Better late than never. After two years of tests, Spain has a video-on-demand service -- Imagenio -- owned by giant Spanish telco Telefonica.

Imagenio has launched discreetly, bowing 2004 in Barcelona and Madrid and rolling out over the rest of the country this year, it has just 8,000 subs. But, economically priced, it's a possible new future for pay TV in Spain.

"Imagenio's accessible prices could bring new clients into the pay TV market," says Juan Maria Romeo, general manager of AXN for Spain and Portugal.

Imagenio offers new distribution outlets. It's inked an output deal with BVI including 25 first-run titles, among them, "Finding Neverland," "Kill Bill Vol. 2," "The Village," "Cold Mountain," "National Treasure," "El Alamo" and "Starsky & Hutch."

It has deals with Spanish indie distribs Filmax, Manga Films, Lauren Films, DeAPlaneta and Alta Films. And it offers 30 niche channels, including Sony Pictures Entertainment's AXN, Disney Channel, Discovery Channel, Jetix, Biography, Real Madrid TV and Cosmopolitan TV, plus Spanish soccer matches on pay-per-view.

The big question is whether call-up pay TV, however priced or packaged, will ever take hold in Spain.

Imagenio has a large potential. Per Screen Digest, by year-end 2004, Spanish pay TV penetration ran at 18.6%, compared to Italy's 23%, 25.5% in France and 58% in the U.K. About a million Telefonica ADSL lines can access the service.

ADSL connections grew 57% in 2004 to 2.6 million connections. A monthly subscription costs e18 ($23) for ADSL subscribers, against $40 for the basic package of Sogecable satcaster Digital Plus.

Imagenio's main pull may not be its content, however, as much as its inclusion in a triple-play offer of fixed line telephony, ADSL Internet and pay TV.

"Launching Imagenio, Telefonica's recognizing that successful telcos offer triple-play," argues Fernando Ojeda, general manager of triple-play cable operator ONO.

"I don't think Imagenio's trying to take on Sogecable. It's more of a defensive move to ward off competition from (triple-play) cable," agrees Enrique Jimenez, an analyst at Ibersecurities.

But results so far for call-up contents systems are not encouraging.

Of the average $61 paid by subscribers to Sogecable satcaster Digital Plus, only $5 stems from pay-per-view.

"Spain still has to catch fire as a pay TV market," admits Imagenio's content manager Joaquin Garcia Orbea.

Cable operators Auna and ONO plan VOD services for 2005. That may deepen a market, which still remains largely the preserve of the middle-classes.