Media Companies Blast German Government Plans to Overhaul Film Funding

Rexa Vella

Media Companies Blast German Government Plans to Overhaul Film Funding

Leading German media groups have blasted government plans to overhaul the country’s film funding system.

Germany’s commissioner for culture and media (BKM), Claudia Roth, Tuesday presented her wide-ranging reform plans ahead of the start of this year’s Berlin Film Festival. The wide-ranging overhaul aims to make German film funding simpler, more efficient and more transparent.

While Hollywood films shooting in Germany have long benefited from the country’s generous funding structures, the reorganization of the system would make it more sustainable, according to the BKM. Major international productions that have benefited from German funding in recent years include “The Matrix Resurrections,” “Uncharted” and “The Hunger Games: The Ballad of Songbirds & Snakes.”

The planned reform consists of three central pillars: In addition to an amendment to Germany’s existing film funding law, the reform proposal includes a tax incentive model and an investment obligation.

The overhaul is intended to improve conditions for filmmaking in Germany and strengthen the country as a production location in the face of increased international competition, Roth said.

The film funding law amendment is linked to the expansion of the German Federal Film Board (FFA), which would pool all federal funding in the future, including that of the BKM.

In addition, a diversity advisory board is to be set up at the FFA to better reflect the breadth of German society, Roth explained.

The government will now move the amendment bill into the legislative process. The new federal film law is scheduled to go into effect in 2025.

The tax incentive model for production support – something that the local industry has long called for – is expected to deliver a major boost and attract big international shoots to Germany.

According to the plan, producers of films and high-end series, as well as production service providers, would receive up to 30% of the recognized German production costs in the form of a film funding allowance financed from corporate and income tax revenue.

The model is intended to enable funding throughout the year and create more security and forward visibility for film productions. With a tax incentive model, the amount of funding adapts dynamically to funding needs, Roth noted.

“With this model, the states could increasingly attract large German and international film productions to their region – and benefit greatly from this overall economically.”

Roth said she planned to now hold talks with the federal states. In addition to the BKM and the FFA, Germany boasts nine major regional funders that provide significant support.

The third and more controversial pillar is the investment obligation aimed at broadcasters and streamers that, the BKM stressed, make “high profits in the German market.”

In return, they should then invest more in Germany as a production location, said Roth, adding that such a model was already working successfully in European partner countries France and Italy.

The BKM’s plans would require domestic and foreign operators to invest 20% of sales generated in Germany back into European productions, 70% of which would have to be in the German language.

Industry lobby group Vaunet, whose members include leading commercial broadcasters and media groups such as RTL, Sat.1 and Pro7, Disney and Sky, described the BKM proposals as “unbalanced” and said they “largely ignore the concerns of private media providers as an essential part of the value chain.”

With the draft plan, “the BKM is not fulfilling its responsibility to find a balance of interests for the functioning of the entire industry. There is also a significant risk of diversity being jeopardized on the broadcasting and streaming side if providers can no longer make their investments economically sustainable in a developing, highly-competitive market for on-demand offerings.”

Vaunet argues that the government should instead stick to the tax incentive, stressing that the current combination included in the bill, with its “far too high investment commitment” and rights sharing requirements, “deeply interferes with the supply sovereignty of the providers concerned” and would not bring Germany forward as a film location.

Leading film industry representatives, however, have indicated to Variety that there is a clear majority in the industry, particularly among producers’ associations, that favors an investment obligation and that the reform can only develop its full potential if all three measures are implemented simultaneously.

The investment obligation with mandatory retention of rights for producers is seen as a key element of the funding reform.

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