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Germany’s film and TV industries will kick off 2025 with an overhaul to the country’s funding system for productions that, besides providing a local boost, is also good news for Hollywood.
The German parliament on Friday, in its last session before being dissolved, pushed through a watered down version of the country’s long-gestating new film funding law that will basically streamline the process through which local productions get subsidies that are financed by various levies, including on movie admission tickets.
The still partly provisional new law also raised Germany’s existing cash back production grant by 5% to 30%, which “makes Germany more competitive for incoming productions,” says producer Philipp Kreuzer, who is among the founders of Munich-based Penzing Studios and has been servicing Hollywood productions such as the second season of Nicole Kidman-starrer “Nine Perfect Strangers” and “Cliffhanger 2″ (pictured above).
The good news for Hollywood is that – amid turbulence due to Germany’s political crisis – the existing incentive “has been increased and optimized,” Kreuzer adds, noting that he just received €11 million ($11.45 million) from the cash grant for “Riddick: Furya,” the fourth installment of the “Riddick” franchise toplining Vin Diesel, production for which is now in prep.
Other 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.”
On the down side, Germany’s rebate at the moment remains capped at $26 million per film and a maximum of $10.4 million per TV series. More significantly, the total funding pot available in Germany for now stays the same, at around $374 million per year. German producers had been eagerly awaiting a more sweeping reform under which “the big difference” was the elimination of the cap and therefore a much bigger pot, Kreuzer says.
As things stand, “for many projects the money will be in place,” says Simone Baumann, head of promotional body German Films. But, she added, “come August or September the money will be gone.”
The long-gestating new German film law – only a portion of which was passed on Friday – is based on three pillars. The first is local film subsidies, which was approved. The other two are the tax incentive to lure more international productions, which the German parliament only temporarily modified by raising its existing cash grant to 30%. And the third is the introduction of an investment obligation for streamers that could generate an estimated additional $624 million for German film and TV productions per year. The tax credit and investment obligations are expected to go back before parliament sometime in 2025.
“If we have elections at the end of February, then probably we will have a government in April or beginning of May,” says Baumann, who hopes the remaining two pillars of the German film law will go back before parliament for debate and approval next fall.
The draft of the investment obligation for streamers, which includes a rights-sharing requirement, would force domestic and foreign streamers to invest 20% of revenues generated in Germany back into European productions, 70% of which would have to be in the German language.
German producers and streaming companies have long been fighting over the investment obligation, which would implement the European Union’s game-changing Audiovisual Media Services Directive and prompt new rules of engagement between producers and streaming giants. Stumbling blocks in Germany include the contention by streaming giants that they would be forced to make non-economically sustainable investments, and also the fact that many German production companies are owned by broadcasters.
“There’s a lot of discussion around it,” says Baumann, who thinks that ultimately, German producers will “have to downsize the [20%] percentage [of revenues] they are asking for.”
“Otherwise, it might not happen at all,” she says.
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