Germany has confirmed plans to nearly double its production incentive programmes for feature films and TV series.
The Ministry of Finance is to increase the annual budget for the German Federal Film Fund (DFFF) and German Motion Picture Fund (GMPF) incentive schemes from €133m to €250m with immediate effect.
Between them, the two funds provide grants that cover up to 30% of approved German production costs, subject to specific caps. Projects supported recently by the DFFF incentive include Riddick 4: Furya and Marie Kreutzer’s Gentle Monster, while the GMPF fund backed series like Apple TV’s Where’s Wanda? and Netflix’s The Empress.
The increase, announced by finance minister Lars Klingbeil, follows Wednesday’s (May 27) approval by Germany’s federal cabinet of a bill to introduce an investment obligation requiring national and international streamers and VoD services to invest at least 8% of their annual net turnover in German and European productions.
Klingbeil had indicated at the beginning of this year that the additional funding for production incentives would be made available once Chancellor Merz’s cabinet had given its green light to the proposed investment obligation legislation.
“With today’s cabinet decision, we are taking German cinema to a new level in the global competition between film hubs,” said state minister for culture and media Wolfram Weimer. “We have decided, across party lines, to inject more money into the domestic film industry than ever before.”
While “expressly” welcoming the release of the additional production incentive funding, four industry associations – German Producers Alliance, AG DOK, German Film Academy and PROG Producers of Germany – outlined in a joint statement their reservations about the proposed Media Services Obligation Act (MedienInvestVG) to introduce the investment obligation.
They argue that amendments to the bill are required, and that the 8% quota level is not high enough.
“The MedienInvestVG aims to eliminate existing structural shortcomings and lay the foundations for long-term value creation, innovation and sustainable employment in the German film and series industry. However, the present draft bill, as it stands, would not yet achieve the desired effect,” said the joint statement.
“The problem is that the proposed investment quota of 8% is already below the level of comparable major European markets. Even the 12% opt-out provision remains below the European average of 13 to 15%. For the most important European market for international streaming platforms, this sends a surprisingly unambitious signal.”
Streamer opposition
Meanwhile, there is continued opposition from streamers and VoD services to the investment obligation bill, which contains numerous provisions, including sub-quotas for investments and rights retention mechanisms for producers.
In a statement issued after the cabinet decision, Bernd Rohleder, CEO of Germany’s digital association Bitkom, said that “instead of providing reliable incentives for high-quality productions, the bill in its current form would create rigid requirements, additional bureaucracy and one-sided burdens for video and streaming services.
“Sub-quotas for new productions interfere deeply with editorial and business decisions and mean that content is no longer created solely on the basis of quality and audience interest, but also in accordance with regulatory requirements.”
One significant and controversial element in the bill is around IP rights for producers. It proposes that exclusive rights may be transferred to a streamer or VoD platform for a limited first exploitation period depending on the producer’s equity share in a production. Under the proposals, the maximum exclusive license period could be set at three years if the producer’s equity share is over 50%, rising to seven years if the producer invests between 9% and 30%.
Rohleder said: “The planned reversion of rights is also problematic, as it undermines the refinancing of investments, particularly in a market characterised by high costs and intense international competition.”
Daniela Beaujean, CEO of Vaunet, the umbrella organisation for private audio and audiovisual media companies in Germany, added: “The actual goal of strengthening Germany as a production hub through a diverse range of content cannot be achieved through legal constraint. In any case, interference in entrepreneurial freedom of decision-making must be kept to a minimum, and companies must be able to respond flexibly and dynamically to changes in the market and among their audience. In addition to the substantive issues that need to be resolved, the excessive and costly administrative and bureaucratic burden must also be addressed.”
Now that the Media Services Obligation bill has been approved by the cabinet, it will go through the parliamentary process. There is likely to be a public hearing in the Bundestag before the summer break as well as further input from producers and streamers. The final readings of the bill would likely take place in the autumn before becoming law at the beginning of 2027.
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