Spain’s SETT has put nearly half a billion dollars behind the country’s film, TV and video game industries over the past 12 months, and the numbers behind the push are now coming into focus.
SETT, the state-backed venture capital fund that drives Spain’s Audiovisual Hub, has invested €215.6 million ($252.3 million) directly into the sector. That has sparked additional private investment of €230 million ($269.1 million). The figures come from María González Veracruz, Spain’s secretary of state for digitalization and artificial intelligence.
From Subsidies to Equity Investments
Subsidy grants and loans for individual films have been part of what Spanish governments have offered since the 1940s. Tax breaks on shoots in Spain came into regular use around 2015. The SETT method differs from both.
The fund places money into companies with a portfolio of productions for up to 10 years, and it demands co-investment from private-sector partners. Its aim is to give these companies a stronger position in the international market. It also backs private-sector investment vehicles.
The name “We are moving from an era of encouraging an ecosystem to consolidating a truly international audiovisual industry,” refers to González Veracruz.
SETT audiovisual director María Coronado says the model rests on three pillars.
- An industry-wide approach, rather than a project-based one, addressing the entire audiovisual business ecosystem.
- Investment facilities directed at the equity capital of companies or regulated investment vehicles.
- Promotion of public-private partnership instruments in the medium to long term.
Companies must represent a “worthwhile business opportunity,” she adds.
The Public Catalyst
SETT describes itself as a “public catalyst for growth, employment, innovation and talent.” Its backers include the Spanish government and European Union support.
The fund is a key element of Spain’s post-COVID Recovery Plan, and its funding comes from the European Union’s Next Generation funds. Those funds ran out on Aug. 30.
Javier Ponce, the SETT director general, explains that the model rests on the concept of the government acting as a partner instead of a patron.
Eleven Publicly Announced Investments
Eleven of 15 SETT investments have been made public to date. The beneficiaries cover animation, new production companies, post-production and a full-chain-of-value player.
Several animation studios stand out among Spanish producers, including Anima Kitchent, Amuse Animation and Planeta Junior. New Spain-based production companies add to the mix: Good Films Studios Spain, Ítaca Films Madrid and Moonlighting Studios Spain. Post-production facilities round out the sector with Lazona Audiovisual Hub and the Refinery. Impulse Studio handles development, financing, production, post-production, international sales and distribution across the full pipeline.
The risk capital fund partners comprise Aurora Media Inversiones, whose backing comes from the Secuoya Content Group, Culture CAP7, which focuses on small- to medium-sized enterprises, and Moby Dick Film Capital, an elevated genre specialist.
Good Films Studios Spain
One of the most visible investments is Good Films Studios Spain, set up at Spain’s Ciudad de la Luz, one of Spain’s biggest studio complexes. SETT took a 46% stake for €19.8 million ($22.6 million).
The firm’s goal is to produce English-language films with budgets ranging from €15 million to €25 million (equivalent to $17.5 million-$29.3 million), featuring actors whose names carry weight in international box-office terms. The producer in charge is Miriam Segal, whose past work includes “Good”, which starred Viggo Mortensen, and “The Infiltrator”, starring Bryan Cranston.
Segal is blunt about why SETT matters. “So it makes making independent films at this level very, very hard. So to have a government body like SETT and hopefully new producer-driven tax incentives, it’s like I died and went to heaven,” she says.
“In a world that’s receding, to have a country with the vision to support filmmakers, independence, training and creation of an industry is very exciting.”
Impulse Studio’s Full Stack
Roberto Butragueño and Andrés Sánchez Pajares set up Impulse Studio in Madrid. The company is co-owned by SETT and covers the full range of film production work, including development, financing, production, post-production, international sales and distribution.
Sánchez Pajares is the name cited by “We have the stamp of security of government backing,” while “With SETT’s support, we can bring ‘hard equity’ to the table, retaining part of the IP, and offer all services at any phase of a project,” identifies him as Sánchez, the CEO of Impulse Studio.
“I think that will allow us to sit at tables where we were not able to talk to date.”
The Milo Distribution Bet
SETT put in €9.2 million ($10.7 million) and worked alongside Planeta Junior and Amuse Animation to buy certain distribution rights to the preschool cartoon series “Milo,”. That series has already been sold to 186 territories.
“‘Milo’ represents a strategic opportunity in the field of technology development, particularly in software, video games and mobile applications,” says Coronado.
What Spain Is Building
The SETT approach moves funding away from individual projects and toward entire companies instead. That distinction carries real weight for the businesses involved.
A new fund called España Crece is now receiving SETT’s funding. Officials from the fund have started talks with Spanish state bank ICO to work out how the two institutions can cooperate and what rules will govern their partnership.
Maria Rua Aguete at London-based consultancy Omdia sees Spain’s position changing. “Spain has already established itself as one of Europe’s most attractive production hubs, thanks to its combination of creative talent, production incentives, and infrastructure,” she says.
“The next logical step is for Spain to transition from being a production destination to building globally competitive Spanish companies that own and export intellectual property.”
The Numbers Behind the Story
- Direct SETT investment: €215.6 million ($252.3 million)
- Private matching investment: €230 million ($269.1 million)
- Publicly announced investments: 11 of 15
- SETT stake in Good Films Studios Spain: 46%, €19.8 million ($22.6 million)
- Milo territories: 186
- Next Generation funds ran out: Aug. 30
- New fund: España Crece
SETT is placing its wager on equity investment over subsidy grants, while the companies involved are counting on the government’s backing to give them leverage they could not secure independently.
The issue at hand is whether the market can take on that leverage. According to Ampere Analysis, global TV markets have shrunk to roughly 75% of their highest point.
The businesses are full of enthusiasm. Segal described it as heaven. Sánchez said it gave him access to tables where he had previously been unable to speak.
Spain’s aim is plain: it seeks to hold intellectual property rights rather than merely serve as a setting for production.
The funds are there for all to see. The coming years will reveal whether Spain can stand its ground.
Source material: “Spain’s SETT Drives $521 Million Investment Push to Build Global Audiovisual Players,” Variety.
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