Will the Movie Financing Reforms be Successful?

Will the Movie Financing Reforms be Successful?

In hindsight, it may be a fortunate coincidence that the new law to reform German film funding was repeatedly delayed. Since the announcement of an eight-point plan at the Berlinale 2023, Minister of State for Culture Claudia Roth often referenced the title “Nothing new in the West” in her speeches. The production by Edward Berger for Netflix, which won four Oscars, is considered the biggest international success of German cinema.

The success of this production highlighted the challenges in the German production landscape. Without the financial support of the US streaming service, which to this day pays very small fees to the film funding agency, such a success would never have been possible. Furthermore, due to the lack of tax incentives, production was moved to the Czech Republic.

The economic appeal of Germany as a film location requires more such incentives to attract international productions. The Babelsberg and Bavaria studios are in crisis, and not just because of the pandemic. Independent producers and auteur filmmakers need financial support to produce their films without having to navigate the complicated German funding landscape for each project.

The draft law that Claudia Roth presented aims to modernize film funding and is largely in line with her announcement from a year ago. It also aligns with the proposals that the eight largest film associations submitted at the beginning of the year. The current film funding law is expiring at the end of the year and a survey from last year reported a 20% decrease in film production.

The proposed reform of film funding is based on three pillars. The first pillar involves the federal funding instruments being managed by the Film Funding Agency (FFA). The second and third pillars represent a political challenge. The current German Film Fund (DFFF) and the German Motion Picture Fund (GMPF) are to be replaced with a tax incentive model. This is expected to provide more security for producers, but it will likely be more costly for the state.

The third pillar involves an investment obligation for broadcasters, streamers, and other audiovisual services. They would be required to invest in German and European productions, with the draft suggesting 20% of the previous year’s sales. This would particularly affect global players like Netflix or Amazon, which have so far contributed very little to German film funding.

The bill is ambitious, but the tough negotiations are just beginning. With only ten months left for such a comprehensive legislative proposal, it will be a marathon that needs to be completed at a sprint pace.