The German film industry may never have looked so good. Last year, Germany hosted a record number of international and US productions and boasted a stunning array of local talent, including Oscar-winner Florian Henckel von Donnersmarck (The Lives Of Others), Fatih Akin (The Edge Of Heaven) and Marc Rothemund (Sophie Scholl - The Final Days). Add to that an enticing film fund launched in January 2007 by the German government, and you have an amazing success story.

The German Federal Film Fund (Dfff) incentive scheme, which is handled by the German Federal Film Board (FFA), has an annual budget of $88.1m (EUR60m). It reimburses 20 cents ($0.29) of every euro spent in Germany up to a maximum of 80% of a film's total production costs.

In its first year of operation, the Dfff generated a 'German spend' of almost $588m (EUR400m) after backing 99 features and documentary projects to the tune of $87.3m (EUR59.4m).

According to the Dfff's project director Christine Berg, the first year exceeded all expectations. "The fund has been so successful because we worked very closely with the industry and have wanted to strengthen the position of the German producers and the film industry in Germany as a whole," says Berg.

One of the biggest projects to take advantage of the funding was Warner Bros' Speed Racer, directed by the Wachowski brothers and starring Emile Hirsch, which received $13.2m (EUR9m) for its shoot at the Babelsberg Studios in Potsdam, from May to September 2007.

A year ago, this new piece of the financing puzzle was on the minds of the film's producers. Debbie Elbin, based in Berlin at the time and working as production consultant on the film, was asked by producer Joel Silver - who had been to Babelsberg two years previously with V For Vendetta - to check out the new incentive and assess whether the German industry could handle the high number of visual effects shots the project required.

"We knew there were certain capabilities because a small part of Warner's 300 had been done at Scanline in Munich," Elbin explains. "My mission was to find technicians and artists in Berlin or the rest of Germany, and in the end quite a few people moved to Berlin to be involved in the project."

The second highest sum paid out by the Dfff - $8.6m (EUR5.8m) - was to another US studio project, Columbia Pictures' The International, directed by Tom Tykwer. "This was a dream for us, as the project paired up money from America with a German director and his team," says Berg.

According to Lloyd Phillips, a producer on The International, another persuasive factor for their choice of location was the tradition of film-making in Babelsberg. "Studio Babelsberg has really become a centre of film-making in Europe and very few other countries in Europe have the same facilities," says Phillips. "We found that being able to establish our production here and then send our German crew to Istanbul and Milan was a very efficient way to make a film at a very reasonable price."

The Weinstein Company has also chosen to shoot a large chunk of its Second World War drama The Reader at Studio Babelsberg, using a mostly local crew (except for the heads of department who are from the US and UK) and local actors.

Based on the bestselling book by Bernhard Schlink, the film was set to star Nicole Kidman as a woman who strikes up a relationship with a much younger man, but Kate Winslet has replaced her in the role. The shoot is set to continue in Germany as planned.

Last year saw the five-month shoot of Bryan Singer's $60m Valkyrie, a thriller about a failed plot to assassinate Hitler, starring Tom Cruise. The United Artists production was based mainly in and around Berlin.

But it is not just the Berlin-Brandenburg region that is proving popular. International projects are also shooting in North Rhine-Westphalia (NRW), Bavaria and Hessen where enticing regional film funds, stunning scenery - from castles and mountains to cityscapes - and good-quality studios are on offer. The first of these regions includes the impressive Magic Media Coloneum (MMC) soundstages in Cologne and respected post-production facilities, such as Dortmund-based RuhrSoundStudios.

Recent projects partly based in NRW include Amos Gitai's Venice competition film Disengagement starring Juliette Binoche, Roger Spottiswoode's The Children Of Huang Shi and Paul Schrader's Adam Resurrected.

However, amid all the euphoria about the boom in production activity, it seems unlikely the same number of big-budget US projects will be winging their way to German studios or locations throughout 2008.

In addition to the combined threats of the US writers' and actors' strikes, the ever-weakening dollar is reducing the benefits available to US producers. Debbie Elbin says she would think twice about shooting Speed Racer in Germany right now.

"The (Dfff) incentive was strong enough to make it advantageous last January when the euro was worth $1.32," Elbin recalls. "Now we are talking about $1.46-$1.48 and that really hurts, so I don't think the advantages are the same." (Elbin has since set up a new company PS:USA in New York, which aims to entice international producers to shoot in the US.)

While the studios in Hamburg, NRW and Bavaria are largely occupied with television productions and so will not be too negatively affected, Studio Babelsberg is doing all it can to attract major local and European productions to its facilities in 2008 to compensate for the loss of US projects. Its cause was helped last year by a Dfff roadshow conducted in Rome, Copenhagen and London to bang the drum about the new incentive.


Hamburg is home to such production companies as Studio Hamburg (The Three Investigators series), Wuste Film Produktion (Head-On), Corazon International (The Edge Of Heaven) and the animation studio TFC Trickompany, and boasts an extensive technical infrastructure.

While Studio Hamburg's stages are mainly occupied with TV programmes, Cinegate Studios, which offers 950sq m of production space, focuses on features, including interiors last year for Swedish director Jan Troell's Maria Larsson's Everlasting Moment, co-produced by Hamburg-based Schneider + Groos filmproduktion. "We have an advantage that we are very close to the technical equipment," Cinegate's managing director Hartmut Rabe says, "and we can offer special package deals with the studio and equipment."

If producers are looking for waterfront or harbour locations, Hamburg is ideal, and the local film commission promotes the city by organising location tours for festival guests at the Filmfest Hamburg each year. After merging with Schleswig-Holstein's fund last year, Hamburg's film fund (now known as Filmforderung Hamburg Schleswig-Holstein) has been promised finance from mayor Ole von Beust to bring its annual budget up to $11.2m (EUR7.5m).


The Berlin-Brandenburg region had a very successful 2007 which saw it host productions ranging from the big-budget, including Warner Bros' Speed Racer, United Artists' Valkyrie and Columbia Pictures' thriller The International, to local independent fare such as Uli Edel's $30m Der Baader-Meinhof Komplex and Dennis Gansel's drama The Wave, which screened at Sundance.

As well as boasting one of Europe's leading studios, stunning locations and access to the German Federal Film Fund, the region also offers grants to international productions from the regional film body Medienboard Berlin-Brandenburg (MBB). In December, MBB co-managing director Kirsten Niehuus announced that supported projects had generated a 'regional effect' of 450% - for each $1.50 (EUR1) allocated by the MBB, the productions spent $6.70 (EUR4.50) - during 2007. This was music to the ears of local politicians whose goal is to make the region "Germany's foremost media location and Europe's leading creative metropolis by 2015", according to Brandenburg's prime minister Matthias Platzeck.

Moreover, the Berlin Senate unveiled plans to make $88.1m (EUR60m) available each year until 2013 for state-backed guarantees as securities against bank loans for the financing of film projects. Brandenburg's own scheme agreed last year to guarantee up to 80% of the $7.7m (EUR5.2m) loan from Commerzbank that was used to help finance Jaco van Dormael's $53m Mr Nobody, starring Jared Leto and German-born Diane Kruger.

The France-Germany-Belgium-Canada co-production managed a staggering tally of 27 individual financing partners, including the MBB and the FFA-CNC Franco-German mini-traite co-production fund. Support from the Dfff is being processed.

In addition, Mr Nobody became the second project, after Kevin Spacey's Beyond The Sea, to be awarded a state guarantee by the Land of Brandenburg. "The guarantee is a wonderful financing element for independent producers," says the film's German co-producer Marco Mehlitz of Lago Film. "It made sense here with Mr Nobody for the Land to become involved because of the scale of project and the incredibly large volume of money coming into the region."

Dormael spent a large part of his shoot at Studio Babelsberg, outside Berlin in the city of Potsdam, which offers one of Europe's largest studio complexes, comprising 16 soundstages with a combined 270,000sq ft. "We have shot in several of the studios, with a spaceship in the Marlene Dietrich Halle, a hospital in the Sudhalle soundstage and two smaller sets in the FX Centre," says German co-producer Alfred Huermer of Integral Film. "Jaco created his own special world and had precise visual ideas. In the Sudhalle, for example, we had a 160m-long green screen."

Studio Babelsberg was also the preferred choice for a number of major US productions. Tykwer's The International, starring Clive Owen and Naomi Watts, recently completed a 13-week shoot there. The co-production between the Mosaic Media Group in the US, the UK's Rose Line Productions and Siebente Babelsberg Film spent nine weeks at Babelsberg soundstages, which included the reconstruction of New York's famous Guggenheim Museum.

Mosaic Media's Charles Roven says: "If it wasn't for the wonderful people of Berlin and Potsdam, and the Dfff, we really wouldn't have been here."

The International became the third US production following Speed Racer and Valkyrie to break the Dfff's $5.6m (EUR4m) cap when it was awarded $8.2m (EUR5.8m) production support. Now the producers have decided to undertake post-production in the region, which means more than two-thirds of the film's production costs will be spent in Germany.

Meanwhile, Stephen Daldry's Second World War drama, The Reader, is shooting in and around Berlin. The production team led by Anthony Minghella and Sydney Pollack for Mirage Enterprises, with backing from The Weinstein Company, has so far only faced one stumbling block, when it was denied permission to shoot at the Sachsenhausen concentration camp.

Constantin Film's Bernd Eichinger is full of praise for the support given by the Berlin city authorities to Uli Edel's Der Baader-Meinhof Komplex, starring Moritz Bleibtreu, about the 1960s/70s German terrorist group, the Red Army Faction. For example, a re-enactment of the student demonstrations against the Shah of Iran outside the Deutsche Oper in June 1967 required the busy Bismarckstrasse thoroughfare to be closed for several days. "The shooting in Berlin was an experience we would like to repeat," says Eichinger.

Not all productions, however, are concentrated within Berlin's city limits or at the Babelsberg studios, as Alfred Holighaus, section head of the Berlin International Film Festival's Perspektive Deutsches Kino section, notes. "If you marked on a map of Brandenburg all the places films have been shot, you'd end up having very few blank spaces."

While director Christian Petzold visited Wittenberge for his Berlinale competition film Yella, Chris Kraus found the ideal location in the Spreewald for his Golden Lola-winner Four Minutes. And the pine forests of Brandenburg provided the setting for the failed attempt on Hitler's life in Valkyrie.


While Frankfurt is known internationally as a leading production centre for commercials, one of the region's best-kept secrets has been the Investionsbank Hessen's (IBH) $30m (EUR20m) Hessen-Invest Film fund. It grants $7.4m (EUR5m) of conditionally repayable loans each year to internationally marketable film projects. Previously, most of the projects supported by the Hessen-Invest fund were produced outside Germany and only did their post-production work in the Frankfurt area.

"Without the support of Hessen-Invest," says local producer Christoph Thoke of Mogador Film, "I wouldn't have been able to become involved in such projects as (Bruno Dumont's) Twentynine Palms, (the Cannes jury prize winner) Tropical Malady or (Srdjan Koljevic's) Red Coloured Grey Truck, providing visual effects, crew members and equipment.

But producers are now discovering the benefits of Hessen locations. Margarethe von Trotta shot I Am The Other One in 2006 in the region, as did Matthias Emcke last November with Phantomschmerz. Last spring saw French producer-director Vera Belmont's $8.8m France-Belgium-Germany co-production Surviving With Wolves receive a $1.1m ($750,000) loan from IBH when the project spent 24 days of a 90-day shoot in the region.


Celebrating its 10th anniversary this year, the Mitteldeutsche Medienforderung (MDM) fund - with an annual budget of $20.7m (EUR13.9m) - has helped to develop the media industry in the former East German states of Thuringia, Saxony and Saxony-Anhalt, encouraging producers from outside the region to set up branch offices there.

As Berlin producer Jens Meurer of Egoli Tossell Film says: "There are parts of (Eastern) Germany where they have great locations and are very happy to welcome a film crew - for example the little-known Saxony-Anhalt, which will stand in for Russia on our Tolstoy film The Last Station. Director Michael Hoffman and production designer Patrizia von Brandenstein were very pleased with what they found."

Leipzig airport has served as the backdrop for scenes in Robert Schwentke's Flightplan with Jodie Foster, while the town of Gorlitz stood in for Paris on Frank Coraci's Jackie Chan extravaganza Around The World In 80 Days and catered for Stephen Daldry's The Reader. Meanwhile, Leipzig's Media City Atelier (MCA) studio, which offers 10,000sq m of space, has been attracting international productions.

In 2004, Mediopolis Film shot the Quay brothers' The Piano Tuner Of Earthquakes and in 2006, Sam Garbarski spent 13 shooting days in the region with Irina Palm about a woman working in a London sex club. "From the moment you leave the street and go down the stairs into the club, you are in the studio in Germany," says Thanassis Karathanos of Halle-based co-producer Pallas Film.


When The Lives Of Others director Florian Henckel von Donnersmarck mentioned Bavaria in his acceptance speech at last year's Academy Awards, the namecheck should have been worth its weight in gold for a production hub that has been looking nervously in the direction of Berlin, the region attracting headline-grabbing US projects.

After the Second World War, Munich had considered itself to be the capital of the German film industry, a claim borne out by the presence of many of the leading production houses such as Constantin Film, Bavaria Film, Tele-Munchen, Claussen+Wobke+Putz, and Hofmann & Voges as well as such internationally renowned service companies as Arri, Avid, Sachtler and Panther. But while the Bavaria Film Studios, south of Munich, are busy catering for television productions and local independent films, the major international and US productions have not yet come knocking.

Markus Vogelbacher, Bavaria Film's head of sales and services, is not unduly concerned. "(The studio) prefers to have continuity and work on acquiring smaller projects rather than putting our cards on just one big project which might not then appear after all."

In recent years, the studio's soundstages have been rented out to prestigious local projects such as Oliver Hirschbiegel's Downfall, Caroline Link's Aftermath (Im Winter Ein Jahr) and Tom Tykwer's Perfume: The Story Of A Murderer, which won the Golden Lola for best sound last year thanks to its work at the studio.

"A big advantage of the studio's location is that we can tap into the workforce and talents in Munich as one of the leading centres of the film industry, including the film school," Vogelbacher adds. Last year the studio also provided production services, including equipment, crew members and lab facilities, when Russian director Vladimir Fatyanov's Mika And Alfred, starring Michael York, came to shoot in the Bavarian capital and on the studio lot. Producer Sergei Pilinsky of Lina Pro was full of praise for the "swift and unbureaucratic" approach of the city authorities to the production's application for shooting permits.

Munich's reputation as a film-friendly location is thanks in no small part to the efforts of the Film Commission Bavaria which works closely with the industry to identify potential problems and cut red tape.

Filming in Bavaria is not restricted to Munich and the studios alone. Other areas promoted through the Location Network Bavaria initiative include Nuremberg, Wurzburg, Bamberg and Bayreuth. "The goal is to make the whole of Bavaria accessible for film shoots and to further develop the quality of the film region as a location for national and international productions," says film commissioner Anja Metzger.

Neele Leana Vollmar, for example, managed to create a 1960s ambience for her film Friedliche Zeiten, which shot between August and October last year in Munich's surroundings. "The locations have remained largely untouched by the passage of time," says producer Caroline Daube of Royal Pony Film.

With an annual budget of around $37.2m (EUR25m), Bavaria's local regional film funding body Film Fernseh Fonds Bayern last year helped support Oscar-winning director Florian Gallenberger's John Rabe, Doris Dorrie's Berlinale competition film Cherry Blossoms and Uli Edel's Der Baader-Meinhof Komplex among others.


It was a political vision to transform the region into a key player in the international film scene that inspired North Rhine-Westphalia (NRW) to establish its film fund, Filmstiftung NRW, in the early 1990s to complement the existing TV production sector.

Last year, the cash-rich fund allocated a total of $50m (EUR33.7m) to 131 German and international film and TV projects shooting in the region or making use of rental companies, the talent pool or post-production facilities.

Amos Gitai's Disengagement, a drama about Israel's withdrawal from the Gaza strip, received $596,000 (EUR400,000). The production spent five days on the railways of NRW last April, and shot a scene on a moving train. "That was very costly, but I didn't want to film in a standing train where one inserts the images digitally afterwards in front of the windows," Gitai says. "I'm happy we had partners here with (co-producer) Pandora Film and Filmstiftung NRW who made this possible."

In addition to Karl Baumgartner's Cologne-based Pandora Film, there are other production houses in NRW which have been involved in projects shooting outside Germany but succeeded in tapping production support from the Filmstiftung. These include Heimatfilm, co-producer on Eran Riklis' The Syrian Bride and Dror Shaul's Sweet Mud; Busse & Halberschmidt, which partnered on Croatian film-maker Ognjen Svilicic's Armin; and Coinfilm, which co-produced Serbian director Stefan Arsenijevic's Love And Other Crimes, an arrangement that included German production designer Volker Schaefer and his team working on the Belgrade shoot and post-production being undertaken by Andrew Bird in Cologne last summer. The film will appear in the Berlinale's Panorama Special section.

Producers looking for soundstages in the region are well served by the Magic Media Coloneum (MMC) production complex on the outskirts of Cologne, which has catered for Amelie, The Miracle Of Bern and 7 Dwarves over the past few years. Last year saw Marie Noelle and Peter Sehr's The Anarchist's Wives spend two-and-a-half weeks at MMC for interiors of Spanish and French apartments. It was then used for a lavish reconstruction of a 19th-century townhouse for Heinrich Breloer's $22m (EUR15m) Die Buddenbrooks, which is being produced by Bavaria Film and Colonia Media.

Post-production facilities are also attracting international film-makers. Dortmund-based RuhrSoundStudios handled the sound mix for Douglas Mackinnon's The Flying Scotsman and has been working on Roger Spottiswoode's The Children Of Huang Shi and Paul Schrader's Adam Resurrected about a survivor of the Holocaust.

"The CGI work (on Adam Resurrected) was done at Pictorion Das Werk and the sound-post at RuhrSound," says co-producer 3L Filmproduktion's Ulf Israel. "The film is very elaborate with lots of sound and visual effects, but the work the two companies have delivered is of the highest quality."

The region scored a major coup with Stephen Daldry's The Reader set to shoot next month. The production will receive $2m (EUR1.4m) of Filmstiftung funding to recreate scenes of postwar Germany from Bernard Schlink's novel and work on interiors in one of the region's studio facilities.