The developments in the German production market in the first half of the year were disappointing and caused a disillusionment with the previously believed mantra of eternal growth. The reasons for this development in Germany are varied and can be traced back to the correlation of various market events. Although the writers' strike in the USA has so far hardly been noticed in this country, the situation could also become more acute in Germany if other trades join in. The decision of the actors' representatives is expected this week - which could exacerbate the problems of the German production landscape in the short term.
The ticker messages from Tradenews are currently causing unease: Almost every day we receive reports from companies in difficulties or with plans for substantial, strategic restructuring. These include successful creative boutiques as well as the pillars of the industry. Sky Deutschland, to the surprise of many, announced that it was leaving its own fictional productions in the hustle and bustle of the Munich Film Festival. Various production companies are reacting to the changing market by adjusting their fixed cost structures. The scraps of information about American strikes complete a picture that only reveals positive aspects at second glance.
During the pandemic, significant changes in user behavior, but also in programming, took place. The comprehensive and flexible program offerings of streamers and now also of broadcaster media libraries reduced the attractiveness of American prime-time fiction on linear television. Major sports and event highlights were postponed or canceled. The need for local in-house productions increased and overcompensated for the forced pause in cinemas. Major entertainment highlights of the post-Corona era shaped the high-profile program content of all broadcasters, while in the media libraries, serial fiction was increasingly intended to attract viewers. All of this led to extensive utilization of local production capacities, despite outdated funding conditions and weak box office results. Now the wind has changed.
Although the major American studios have rediscovered the cinema as a revenue machine, the demand for local content is increasing at the same time. In the first half of the year, fictional productions were already feeling the wind in their sails. Now public broadcasters are also adjusting their profile under the pressure of current cost developments. As a result, established formats are no longer being commissioned. The growing competitive pressure is also being expressed by streamers in selective awarding contracts. The cinema may be back, but it is primarily giving tentpole projects budgeted in hundreds of millions of dollars a big stage. For the production industry in Germany, there are opportunities in the niche with smart funding structuring. The general public is currently hardly benefiting from this. Productions and shooting days therefore fell noticeably in the first half of the year.
The new FFG announced by many parties, i.e. the future framework conditions for funding to allow German productions to be shot in Germany again and to attract large-scale international projects in a competitive manner, will probably improve substantially. A short-term hope or a structure with advance access to funds would be suitable for smoothing out current contract production slumps. Cinema productions in particular benefit from funding and German cinema has certainly had a boost from the Oscars. The aforementioned commitment of the major studios to the big screen (currently more for their large-scale projects, however) is generating attention and a positive image, which could benefit all cinema projects in the future, including cinemas, distributors and production companies.
The more diverse the media, the less dependence on one genre. We are well on our way there. Other countries have shown many times that the creative industry is also able to compensate for economic downturns in other sectors of the economy. With this self-confidence, we should go into the next few months, which will certainly not be easy, with a kind of halfway point mentality. It is still really challenging right now, but now it is getting better and better.
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(Image: IFP Entertainment GmbH)