After years of neglect and even a few counterproductive measures, Germany’s film biz community is hopeful that Chancellor Angela Merkel’s new government may actually improve its lot.
While Bernd Neumann, federal commissioner for cultural and media affairs, has avowed his commitment to boosting private capital for German film and developing financing opportunities for local filmmakers, the administration was quick to stop the flow of German coin to Hollywood.
Merkel’s first Cabinet meeting in November stripped the tax incentives of diverse investment funds, including film-financing vehicles, as part of the government’s tax-reform plan.
For Hollywood’s studios and independent producers, it means the elimination of a hugely important source of financing.
“Billions of dollars flowed to Hollywood. German film did not profit from that at all. We will introduce another and better instrument for the film industry that will serve to mobilize private capital,” Neumann says.
Neumann describes the creation of such a vehicle as one his most important tasks. Laying out his plans, Neumann says Germany needs tax models and incentives to generate private capital for local film production.
“We need more private investors for German film productions. At a time of tight public spending and internationally growing production budgets, that goes without question.”
Neumann stresses that new incentives for producers and investors will carry the condition that a part of the money must be spent in Germany.
With the goal of having a plan on the table by July 1, the commissioner says the government has taken its first steps toward necessary reform.
A Cabinet committee is set to review various models in place in other European countries in an effort to come up with a structure that would work in Germany.
The commissioner adds that the government is depending on the industry itself to help.
Local producers have ecstatically welcomed the government’s plans.
Stefan Arndt of Berlin-based X Filme and a board member of producers association Film 20, calls the administration’s resolve “a happy surprise,” adding that the government “has made a clear, future-looking decision” in film policy, noting that “they even have a deadline.”
Arndt says film producers will help develop models that could assist in turning the industry around.
“The country needs more investment and fewer subsidies.”
Another issue Neumann plans on tackling is easing restrictions on international co-productions in Germany — a move that would benefit the entire industry. International co-productions face the problem of being taxed in Germany as well as in other participating countries. A change to the country’s media decree would alter that.
Also on the commissioner’s agenda is the dire state of the local exhib sector and efforts to strengthen the market share of German film.
Neumann is hoping to see the local industry stabilize the share of local pics in cinemas at above 20%; in 2005, that figure fell to 17%.
While acknowledging that the exhib industry is facing a crisis, Neumann says the shift in the value chain — i.e., the growing emphasis on ancillary markets — cannot be reversed.
“We need to think intensely about new business models for cinemas,” he says.