German Market Fertile Ground For Film Makers

A bizarre German comedy about a gay American Indian, produced on a modest budget, was the most popular film in Germany last year with box-office earnings of more than 60 million euros ($52 million).

The German-language satire of Hollywood westerns called ``The Shoe of the Manitu'' was the most successful German film in 20 years, pulling in more viewers than U.S. films that cost 10 times as much to make.

``The Shoe of the Manitu'' gave its producer Constantin Film a phenomenal return on investment of just four million euros and its triumph served as a potent reminder of how lucrative local-language blockbusters can be.

The huge profits also rekindled international interest in the mighty German market, the world's second largest in terms of revenue, which grew 21 percent in 2001 to 935 million euros.

Germany's rapidly growing, if little recognised, industry will be showcased at next week's Berlin Film Festival, a top European event. An unusually high number of four German films will be in the running for the Golden Bear award this year.

As audience preference gradually shifts towards domestic films in many markets, Hollywood giants like Columbia TriStar have begun to set up local-language production operations alongside their distribution of Hollywood output.

Even though Hollywood films have long dominated local markets here as they do world-wide, original German-language productions managed a respectable 15 percent share and executives in and outside Germany expect the figure to rise. French films are also claiming a growing share at

home.

FOREIGN LANGUAGE FILMS MAKE MONEY

``We have seen a trend in individual countries towards domestic films,'' said Gareth Wigan, vice chairman of Columbia Tristar Motion Pictures Group. "People want to see more of their own films, not only American films.

``We're seeing a gradual movement where Germans want to see German films, the French want to see French films and so on,'' Wigan said in an interview with Reuters. ``This led us to decide to produce in different countries. There is a strong economic argument for this: these films can make money.''

Wigan said Hollywood films had on average 90 percent of most of the important film markets around the world, but that market share would probably head down.

Now Columbia wants to secure a portion of the domestic market shares it is not getting now.

``We don't pretend to be doing this because we are 'good people'...It's simply good business,'' Wigan said.

Columbia has produced several German-language films in recent years and aims to make two or three a year. The Sony subsidiary also produced Chinese-language films, films in Brazil, and will soon begin making local productions in Spain.

``Germany and China were two experiments for us and they have both been successful,'' Wigan said. Of seven foreign-language films made in Germany and China so far, five were profitable.

``That's a very good average,'' Wigan said. Their cost, about $5 million, is also less than one-fifth of an average U.S. film.

``The makers of these films received cheques for profits from us within six months,'' he said. ``That's very fast.''

With production costs a fraction of costs in the United States, films made elsewhere can provide spectacular returns.

The Constantin film ``The Shoe of the Manitu'' sold 10.8 million tickets last year in Germany -- a country of 82 million -- compared with 10.4 million for ``Harry Potter''. It was the first time in 20 years of record keeping that a German film managed to beat Hollywood productions to the number one spot.

The 1998 film ``Run Lola Run'' was the last German production to make a strong showing in the United States.

NEW MARKETS

Another Columbia foreign-language film, ``Crouching Tiger, Hidden Dragon'', cost less than $1 million to make. The Ang Lee martial arts romance that won four Academy Awards had box office takings in North America alone of more than $128 million.

Columbia set up a local-language production house in Hong Kong in 1998 and it is producing two more films -- one in Beijing and in Taipei. Warner Brothers is also opening production divisions in the region.

Wigan said the expansion into local-language production is moving forward at a deliberate pace. He said Columbia is trying to learn from the pitfalls in each new territory.

Aside from Spain, he said the company was discussing a deal in another country, although he declined to name it.

``I hope we can add another country every year,'' Wigan said.

Thomas-Peter Friedl, in charge of marketing and distribution at Constantin, said German audiences were warming to local productions after years of faint interest.

``German audiences are gaining further confidence in German films with each well-done German film,'' he said.

HANDSOME PROFITS

Film executives say costs in foreign markets are lower than in the United States for several reasons. Local ``stars'' usually earn modest wages, and marketing costs are far lower, so German films rarely cost more than four to five million euros.

And local film subsidy boards or government agencies sometimes contribute part of the financing, in the form of loans, for film projects.

``Germany has always been an important market and the success recently has proven that German films are an important part of the domestic market,'' said Maike Haas, co-production and acquisition supervisor at Buena Vista's Germany subsidiary.

Aside from distributing Hollywood films in Germany, Buena Vista, a unit of Disney, co-produced one German-language film, distributed three others last year and plans to continue.

Exploding the stereotype of Germans as humourless, many of the most popular local-language hit films have been comedies. While comedies don't necessarily travel that well across language and cultural barriers, that doesn't really matter.

``With Austria and Switzerland the German-speaking market has about 110 million people,'' said Juergen Schau, head of Columbia Pictures' German subsidiary. ``And if the film has legs, it will be profitable in this territory.''

Germany, Europe's largest economy, has posted strong growth in box office revenues in recent years -- especially as comfortable new multiplex theatres replace older facilities and ageing baby-boomers return to cinemas after years of absence.

Some 160 million tickets were sold last year -- up nearly 20 percent from 133 million in the previous record year of 2000.

``The German market is booming,'' said Andrea Willson, managing director of Deutsche Columbia Pictures Filmproduktion, the German-language subsidiary.

``There's a lot of competition in Germany for the best projects. We have an added advantage in that we can offer film makers the ability to distribute world-wide.''  (Copyright Eiol - Reuters)