German Film & TV Industries At Crossroads Amid Political Upheaval

As Germany heads into a key general election on February 23, there’s a cloud of uncertainty hanging over the country’s film industry. Europe’s largest economy is facing a third consecutive year of recession, which is having a stark knock-on effect on the German media landscape as inflation and cost of energy prices hit the production sector. 

Across the last three years, the industry has been seeking a solution to its woes by working closely with the country’s government to install what was slated to be the country’s biggest reform to film funding to date. For many years, Germany has traditionally been a powerhouse in the international film sector, particularly at markets such as the EFM where a German acquisition of a title, which was often aided by strong TV commitments, was a huge coup for producers and sellers. But things are evolving as traditional TV commitments are less potent. Germany’s box office dipped by 6.5% year-on-year in 2024, the most of all major European territories.

Built across three pillars, the proposed film funding reform involved an improved version of its German Film Law (FFG), a tax incentive model and a law for streamer investment obligations with IP protections for indie producers. Insiders say progress was being made until Germany’s coalition of the Social Democrats (SDP), Free Democratic Party (FDP) and the Green party collapsed in November, effectively grinding conversations to an abrupt halt.  

“We found a solution for basically every single topic,” says Constantin CEO Oliver Berben. “We were talking about a three-legged system that we’re trying to build here to grow the industry.” 

Before it was dissolved in December, the parliament ushered in an improved but nonetheless watered-down version of the new film funding law, which aims to create a more centralized funding system for production, distribution and exhibition, it was met by some with a bittersweet response as it left the long gestating proposed 30% tax incentive and streamer investment obligation laws unratified.

There’s also discomfort at the exclusion of other anticipated reforms around diversity and green production, especially with the anti-immigrant and anti-green policies of far right party AFD, which is forecast to take 22% of the vote in the election. 

An early draft of the FFG included specific gender equality and anti-discrimination standards that would have been codified under law and brought Germany in line with standards in other territories like the UK. The reforms had been drafted in close consultation with industry unions like the Black German Filmmakers Association (Schwarze Filmschaffende).

“We’d been talking to them for two years,” Association board member Benita Sarah Bailey says. “We went to the Bundestag and spoke with MPs and the Cultural Ministry. We made proposals and shaped the law. It was going great. Better than we expected. But then the coalition broke down, ironically on the day of Trump’s election, so to make sure at least some of the law passed, there had to be a compromise with those who demanded the diversity committee was excluded. So basically, they traded us in.” 

Bailey describes the exclusion as a “major blow” for filmmakers in Germany who had believed codified standards on diversity and inclusion could protect them from the volatility of changing political winds in Germany. 

“We were hoping to get this ratified before the upcoming elections because the law lasts for five years,” Bailey says. “It can’t be changed in that time, no matter who takes power. That’s why it was so important for us.” 

The issue of time and the forthcoming election is a worry for many German industry members. The fear that if these laws aren’t passed fairly quickly – which is a possibility with a new government – this will lead to a significant decline in local productions as cash-strapped indie producers look to shoot in neighboring nations with more favorable tax breaks such as Austria and the Czech Republic.

“Nobody sees Germany as a relevant production hub because we don’t have any kind of tax incentive or investment obligation like other big production countries in Europe,” says Prof. Dr. Lisa Giehl, EVP of Subsidies & Public Policy at Leonine. 

She adds: “The German funding system is so complicated, and we need a simpler system. We have so few international productions shooting here because of our funding situation and we need to be attractive and look for bigger productions from the UK, the U.S. and elsewhere to come and shoot here.” 

FFG

The new German federal FFG law, which regulates state funding for the German film industry, was passed in December and some are encouraged by the new structure, which sees the country’s main rebate subsidy programs – the German Federal Film Fund (DFFF) and the German Motion Picture Fund (GMPF) – raise its existing cash back production grant from 25% to 30%. Additionally, Germany’s overall funding pot remains the same at $375M. 

Philipp Kreuzer, Chairman of the Supervisory Board of German Films and founder of Penzing Studios in Munich which recently housed the Cliffhanger reboot with Lily James, is encouraged by the new measures that have been put in place in the FFG. “The support is more automatic, and the grant has been increased and optimized,” he says.  

“The old model is still there, and it works,” he says. “The fact there is no tax credit doesn’t mean there are no incentives. The government has managed to increase the existing model until we get a tax credit in place.” 

The rebate, however, is still capped at $27.6M per feature film and high-end TV series have been offered rebates of between 20% and 25%, with a cap of $11M. 

German Films Managing Director Simone Baumann agrees. “It’s a much more automatic system now, which is good news and there is more money for development.” 

But producer Henning Kamm of Real Film Berlin, who is behind TV projects such as Unorthodox and upcoming Berlin ER, is dubious. “They’re prolonging the system we had in place before – the DFFF and GMPF,” he says. “They’ve made it prettier but it’s by far not what was intended, which was having a true tax rebate system that has no ceiling. We’re still dealing with a limited amount per year and now that you can claim a higher percentage, it means that with more productions getting off the ground, the pool is going to be emptier quicker.” 

Investment obligation 

Giehl says that the most important step is the investment obligation from streaming providers, which would be “a real game changer” for Germany. 

Similar deals have been struck with streamers in neighboring countries like France where Disney+ signed a landmark media chronology deal agreeing to invest 25% of its annual net turnover in France in French and European productions. The Mickey Mouse streamer has also committed to acquiring a minimum of 70 feature films over the three-year period. Apple TV+ similarly signed its first agreement with French audiovisual sector professional bodies in January committing the platform to investing 20% of its turnover in local and European productions.

Although it is important to note that while German-based productions continue to travel far, with titles like Netflix’s Liebes Kind (Dear Child) and Prime Video’s soapy romantic drama Maxton Hall – The World Between Us topping the streaming charts, the country hasn’t been immune to the tough and largely arbitrary effects of global streaming market correction. Paramount Global has pulled out of the territory along with HBO Max and Starz Play, while Apple, Disney+, and Prime Video have reined in spending. 

Discussing the investment obligation, one prominent local producer told us it is really “a question of perspective.” 

“Those affected, especially streamers and media library providers, are of course working against it,” the producer says. “However, an overall package would be important not only to attract foreign projects, but also to boost German productions.”

Fabian Gasmia of Seven Elephants, who most recently produced Lena Dunham and Stephen Fry starrer Treasure says: “Public funding should only be granted to productions where the rights remain with, or at least revert to, a German or European-owned company. This is the only way to build a resilient and independent German industry, rather than subsidizing international corporations without long-term benefits for the local ecosystem.” 

In order to get the tax incentive across the line in Germany, Giehl notes that it’s essential to get Germany’s various federal states to approve the measures but with the current limbo of the political situation in the country, everything is at a standstill. 

“It’s very complicated to get them into the boat because they feel a loss of tax income for their own state,” she says. “As we all know, the tax incentive model has a very high return on investment, but it’s still complicated and a majority of the federal states would have to agree to this. We feel there is a strong will to implement the tax incentive, but we’ll have to wait until after the elections.”  

For Berben and many of his counterparts, there’s a question mark around the speed at which the new government may or may not pass these laws. “When the new government comes into place, we don’t know how long it will take to get these measures implemented, if at all. If they start this process from scratch, it could take another year, and we would have two or three years until the whole industry would be able to step up and compete with neighboring countries in Europe.” This, he says, may result in “local productions moving out of Germany”. 

“It will be a huge problem for people working in the industry because there will be less work,” he says.  “The other thing that might happen is that production will not happen at all, especially for companies that are smaller. If they don’t have the fiscal ability, how will they finance a movie? It’s not going to work.” 

Next steps

On a national level, if the new government doesn’t pass the remaining two pillars of the film laws, it will be extremely harmful to the business, says Kamm. “We would completely lose the attractiveness for outside productions coming into Germany if we don’t have an incentive in place.” 

Kamm stressed concerns for the health of Germany’s renowned production entities such as Studio Babelsberg, which largely depend on big, Hollywood productions to use their studios. Kamm recently shot a Disney+ show at Babelsberg and admits he was surprised he was able to get the production into the studio. “I would have never expected to be able to shoot at this prestigious studio,” he says.”In the past, it was always filled with American productions. Let’s hope they’re coming back soon and we can work side by side.”  

Rental services, VFX and post-production houses equally all rely on international business coming in. “This would really set the industry back because there would be a lot less international finance coming in.” 

Kamm points to his recent production Berlin ER, which was originally set up at Sky but when they pulled out of German originals at the last hour, ZDF and AppleTV+ stepped in with the streamer taking worldwide rights except for UK and Ireland, which Kamm retained. That experience showed him that “retaining rights is extremely important and I would want to push this through as much as we possibly can.” 

“I expect it to be easier to retain rights than ask for a share in profits,” he says. “To me, this would mean a cultural shift. Historically, it’s always been enough for us to produce German content for the German market – unlike smaller territories there wasn’t an existential need to compete on the on the international market. It would give another perspective.”