The funding of films based on the German Act on Film Funding (FFA), and with it the obligation for certain entities active in the film business to pay a film levy would have ended according to the current S. 75 FFA Dec. 31, 2008. As it has been determined that film funding has had a positive influence on film business in Germany, the German legislature passed an Act in November 2008 that will extend the term of the FFA by another five years. This new Act is supposed to enter into force Jan.1, 2009. With this extension, a number of provisions in the FFA were amended in order to take into account new developments in film business.
The basic requirements for film funding have been slightly modified. A full-length motion picture will only be considered for funding in the future if it concerns, among others, cultural, sociological or historic issues. Additional cultural requirements have been added in order to make sure that the film can be considered for funding as a cultural product under European Community subsidy rules in line with Article 87 para. 3d EC.
The customary amount for funding of so-called project films (planned films that appear able to improve the quality and efficiency of German films) will be raised to €1 million. So far, this was only possible in exceptional cases; the amount was usually €250,000. In order to strengthen the funding for project films, the usual funding amount for scripts will be raised by €5,000 to €30,000. However, new authors will now have to cooperate with an author consultancy instructed by the Film Funding Office after film-funding has been granted. As part of the amendments to the Act, a funding for treatments has also been introduced in order to help authors come closer to producing an actual script.
In contrast to the strengthening of funding for project films, the funding for so-called reference films will be reduced inasmuch as the required number of so-called reference points (determined based on the number of viewers and the success in internationally important festivals and awards) will in the future be reduced from 150,000 points to 100,000 points, only if the film obtains the rating “of particular value/quality” by the Film Rating Bureau. Previously, it was merely required that the film obtain a rating, but not necessarily a specifically high rating.
For companies exploiting film rights, it will be important that the time limits before exploitation is allowed to start will be reduced. While the traditional video exploitation will still only be possible six months after the film has first been shown, paid video-on-demand providers are now subject to this time limit as well. The limit for paid TV exploitation was reduced by six months. This exploitation is now possible at the earliest 12 months after the movie has first been shown (while it used to be 18 months). Exploitation in free TV and free video-on-demand will now be possible 18 months after the movie has first been shown (down from 24 months). These time limits can be further reduced if a special application is filed in an individual case; the reduction of the time limit for exploitation on free TV may even be applied for before production begins in case of particularly expensive films, as long as the exploitation in movie theaters will be secured by a reasonable number of copies in relation to the production costs.
Because of the more difficult exploitation environment, the use of film-funding by distributors will be made more flexible: this way the funds may possibly be used for exceptional or exemplary advertising measures. The changes are also reflected with respect to the levies imposed. In particular, companies in the video business will now only be subject to a levy from a net turnover of €50,000, which is meant to facilitate market entry particularly for smaller companies offering video-on-demand services.
Film-funding will now also continue to have an influence on the film even into the future. The grant document for film-funding will now have to be combined with certain conditions that are meant to make sure, among others, that TV exploitation rights for Germany will revert to the producer after five years, and that the conditions agreed to between the Film Funding Office and the TV broadcasters will also be honored between the producers and the TV broadcasters.
It is certain that with these amendments to the FFA, film-funding in Germany will continue to exist on a sound legal basis in the coming years.