Germany

[DE] Federal Film Board publishes updated film support levy report

IRIS 2023-9:1/26

Katharina Kollmann

Institute of European Media Law

The German Filmförderungsanstalt (Federal Film Board – FFA) has published an updated evaluation report on the revenue generated by the FFA film levy. The report describes the film levy system and the amount of revenue it generated between 2012 and 2022, examines the market sectors relevant to the film industry and looks ahead to how current payers of the levy and the market as a whole might develop between now and 2029. Following the decision to extend the German Filmförderungsgesetz (Film Support Act – FFG) until the end of 2024, the FFA has now updated the report that was originally published in mid-2022.

The FFA, an institution incorporated under public law, was founded in 1968 and operates on the basis of the FFG. As Germany’s national film support agency, it is financed through a film levy paid by cinemas, the video industry and television companies. Article 171(1) FFG requires it to publish an evaluation report on the income generated by the levy in the context of the economic situation of the German film market.

According to the updated report, dated 30 June 2023 and published in August, the film levy generated more revenue in 2015 (EUR 57.2 million) than in any other year during the past decade. Although the figure remained generally stable between 2012 and 2019, averaging EUR 50.5 million, it fell sharply in the following two years and dropped to around EUR 40 million in 2022 as a result of the COVID-19 pandemic. While it was still higher than expected in 2019, in subsequent years it fell significantly short of the forecasts contained in the previous evaluation report.

It is worth noting that the cinema industry recovered well in 2022 following the decline caused by the COVID-19 pandemic. Referring to figures published by the largest German market research institute, GfK, the FFA reports that cinema market revenue increased to EUR 720 million, a 91% jump compared with 2021. This figure was around 30% lower than in 2019, the last year before the pandemic. According to GfK, around 74 million cinema tickets were sold in 2022, 85% more than in 2021 and around 65% of the 2019 figure. The cinema market is expected to continue its recovery from the pandemic-related collapse between 2023 and 2025. Nevertheless, revenue is still predicted to be around 14% lower in 2029 than its 2019 level.

GfK’s figures also show that the home video market, which includes both physical image carriers and digital services, generated a record revenue of EUR 3.108 million in 2022. It therefore grew by 84% during the period covered by the report (2012 to 2022). Closer inspection shows that the physical home video market began to shrink after 2013, a trend that continued in 2022. Meanwhile, the accelerating spread of new digital video formats means that the market as a whole is growing, with digital services in particular, especially Subscription-Video-on-Demand (SVoD), expected to become increasingly popular in the period until 2029. Physical video sales and rental, on the other hand, will account for less than 5% of home video revenue in 2029, with the rental market possibly disappearing altogether .

Last but not least, it is also notable that, in the context of the digital home video market, Ad-Supported Video-on-Demand (AVoD) is one of the fastest growing segments of the German advertising market. AVoD is mainly used by two groups of providers: German marketing companies and international platforms such as YouTube. In 2022, most net revenue within the German AVoD market – around 70% – was generated by international (social) video platforms, with YouTube alone accounting for around 40%.