Wall Street has probably given the US president's tariff war a break for the time being. Politicians are taking better note of falling growth forecasts, even in the USA. In Germany, we are experiencing a new policy that promises companies stability and planning security. With Wolfram Weimer, the "industry" has also gained a genuine entrepreneur in the BKM as an advocate for de-bureaucratisation and economic sustainability. Meanwhile, US President Trump's announcement of tariffs on "foreign" films first leaves us perplexed and then a Echo of the international film community. It is doubtful whether this is the end of the matter. Therefore, the questions that are familiar from co-production agreements remain as to when a film is American or non-American - and what customs duties should be levied on in the first place. Fun fact: The USA has not yet been able to reach such an agreement with any other country. 
 

If the definitions in co-production agreements are actually used as a guide, not that many films would be affected - or maybe they would - but we don't know. However, US President Donald Trump would probably like to bring filming and technical editing back into the country. As we know all too well in Germany, productions are looking for countries with an attractive mix of reliable technology, sufficient skilled labour and, in particular, film funding. The latter must be reliable, easy to apply for and, in the best case, uncapped, i.e. also give large projects sufficient room for manoeuvre.

Why is production in particular such an important factor? The answer is regularly provided by the publications of Olsberg SPIthe global market leader for effectiveness studies on film incentives. The "ripple effect" leads to a variety of positive effects for a location. In addition to the direct, fiscal and economic added value through the expenditure for the respective production and the consumption through paid salaries of the film crew on location, with some marketing effects, the decision on the location of the production unfolds sustainable location effects.

Professional filmmakers and technical service providers on site combine expertise and the ability to create value at a location. Especially Technical operations ensure the necessary continuity through cross-project investments and long-term permanent employees. This is precisely why the incentives in most countries around the world are aimed at local spend, i.e. expenditure in the production region. Production companies are primarily project-driven, which can easily be seen in the ratio of long-term permanent employees to long-term production employees. These companies are characterised by their high scalability, which is precisely why they often face regulatory challenges that are based on the average number of employees and not on the actual size of the company.

The sustainability of promotional strategies is easy to check. The MFG Baden-Württemberg targeted VFX and animation companies early on. The density of these companies with the number of employees, training opportunities and the transfer of expertise to other sectors is therefore probably above average throughout Europe, although the south-west was not one of the traditional locations for film studios. Studio Babelsberg and Bavaria Studiosboth founded long before the Federal Republic of Germany, have been a natural destination for filmmakers, reference projects and ultimately synonyms of the professional film industry for decades. Pinewood" or "Barrandov" also stand for film production and not for content.

However: "Hollywood" is "film", even though most films from the major studios are not shot there. Infrastructure without content is worthless. The dual approach (again) set out in the coalition agreement to support production companies primarily through investment obligations on the part of programme providers and the competitiveness of Germany as a film location with a simple, automatic system (tax incentive) complements the federal cultural funding offer.

The factual effectiveness for production companies is important for the acceptance of the tax incentive. This applies to the scope of the subsidised services, the simplicity of the administration of the subsidy process and, in particular, the direct liquidity effect. Models that require interim financing via intermediaries are hardly accessible to independent companies in Germany and would therefore impair the overall effect of the measure.

Your Markus Vogelbacher

and the Ensider:Team

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