Spearheading the Spain Audiovisual Hub Phase 2, SETT, a state-backed venture capital fund, represents new opportunities for Spain’s film and TV industries No Spanish industry initiative is likely to drive more conversation at this year’s San Sebastián Festival than the latest moves by the Spanish Society for Technological Transformation (SETT). Over the past 12 months, state-backed venture capital fund SETT, the investment driver of the Spain Audiovisual Hub, has plowed €215.6 million ($252.3 million) into Spain’s film, TV, video game and new technology sectors, sparking matching private-sector investment of a further €230 million ($269.1 million), says María González Veracruz, Spain’s secretary of state for digitalization and artificial intelligence. That’s around four times the average budget of Spain’s core subsidy fund at the country‘s ICAA Film Board.
In other ways, SETT, which is part of Spain’s Ministry for Digital Transformation, also harbors a revolution. Since the 1940s, Spanish governments have offered subsidy grants and loans for individual films, and from around 2015, tax breaks on shoots in Spain. In contrast, SETT invests up to 10 years in companies with a portfolio of productions, requiring co-investment from private-sector partners, and looking to give them an edge in the international market.
It also backs private-sector investment vehicles. Eleven of 15 SETT investments have been made public to date, with beneficiaries including animation sector leaders (Anima Kitchent, Amuse Animation, Planeta Junior), new Spain-based production companies (Good Films Studios Spain, Ítaca Films Madrid, Moonlighting Studios Spain), post-production facilities (Lazona Audiovisual Hub, the Refinery) and a full chain-of-value production-distribution player (Impulse Studio). Also underscoring the range of SETT’s portfolio, risk capital fund partners include Aurora Media Inversiones, led by the Secuoya Content Group, Culture CAP7, which targets small- to medium-sized enterprises, and elevated genre specialist Moby Dick Film Capital.
Serving as a “public catalyst for growth, employment, innovation and talent, which are all core elements of the audiovisual sector,” SETT brings to the table the weight and power of the Spanish government and European Union backing, says SETT director general Javier Ponce. With the Spain Audiovisual Hub a key element of Spain’s post-COVID Recovery Plan, SETT’s funding is financed through the European Union’s Next Generation funds, Ponce notes. Its model has been built on three pillars, adds SETT audiovisual director María Coronado: “First, it adopts an industrywide approach, rather than a project-based one, addressing the entire audiovisual business ecosystem.
Second, its investment facilities are directed at the equity capital of companies or regulated investment vehicles. Third, it promotes public-private partnership instruments in the medium to long term.” Companies must represent a “worthwhile business opportunity,” she adds. As global markets have contracted to some 75% of peak TV, according to Ampere Analysis, however, where are these opportunities?
The key to SETT is its specific operations. SETT has taken a 46% stake for €19.8 million ($22.6 million), for instance, in Good Films Studios Spain, set up at Spain’s Ciudad de la Luz, one of Spain’s biggest studio complexes. It aims to make competitive English-language movies, budgeted at €15 million-€25 million ($17.5 million-$29.3 million) “with stars of international theatrical market value,” says GFSS head Miriam Segal, producer of “Good,” with Viggo Mortensen and “The Infiltrator,” starring Bryan Cranston.
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