MADRID Major U.S. and Spanish companies are preparing to invest in online music and movie services in Spain once a controversial new law to fight piracy takes effect next month, the country's culture minister said.
Intellectual property watchdogs have targeted Spain as one of the world's largest copyright violators with a piracy rate of nearly 80 percent, and are closely watching the implementation of the new law.
"There are Spanish companies developing large websites and U.S. companies that are seriously studying how to enter the European market," Angeles Gonzalez-Sinde told Reuters in an interview.
"Until now U.S. companies were considering abandoning our country, closing their headquarters and even their delegations because it wasn't worth it," she said.
The 46 year-old Sinde -- who was a screenwriter, director and president of Spain's film academy before taking on the role of culture minister two years ago -- is behind the new anti-piracy law that bears her name.
The "Sinde Law" aims to shut down file-sharing web sites providing copyrighted material. The United States, home to companies that produce vast amounts of music and films, has welcomed it as a step to fight illegal downloads.
DVD sales in Spain dropped 60 percent between 2006 and 2010, while sales of recorded music fell 21 percent in 2010 from the year before, according to trade association data.
U.S. digital entertainment providers Netflix and UltraViolet, French retailer Carrefour and electronic goods chain Media Markt -- a unit of German retailer Metro AG -- want to offer sites for music, books, films and videogames in Spain once the law is enforced.
"All of these stores are getting ready to launch a very potent, quality catalog of offerings," said Jose Manuel Tourne, manager of a Spanish anti-piracy federation that is a member of the U.S. Motion Picture Association.
But first he said they want to be sure the law is effective.
Meanwhile, Sinde tipped unlisted Spanish retailers Corte Ingles and FNAC as future players in the streaming video and music market, and said the new law would enable some widely visited illicit sites to go legal.
This will help create jobs in a country that suffers the highest unemployment in the European Union, she said.
Intellectual property-related businesses and services account for about 4 percent of Spain's gross domestic product, which is facing fragile growth as the country stutters out of a long recession.
However, the Sinde Law has been widely criticized by people on both sides of the piracy debate.
Copyright owners, including some of Sinde's own film colleagues, say the law is too weak and does not provide ways of reaping the potential of the Internet, while internet companies claim it is too strict.
Sinde's successor as head of Spain's film academy, director Alex de la Iglesia, resigned this year to protest against the law, saying the Internet is the film industry's "salvation."
Spanish cinemas sell some 100 million movie tickets every year, while some 400 million films are downloaded illegally, according to data by copyright association EGEDA.
The law won the backing of opposition parties after the government introduced safeguards to stem concerns that it would suppress freedom of expression. Two judges will rule on the recommendations by a government committee on intellectual property that a suspicious web site be closed.
Sinde has also pledged to introduce stricter controls and oversight of copyright administrators after a corruption scandal at the copyrights agency made headlines this month.
Police raided the country's main administrator of royalties on copyright material Sociedad General de Autores Espanoles (SGAE) for suspected embezzlement and money laundering.
(Additional reporting by Teresa Larraz and Paul Day; Editing by David Holmes)