Action! Hollywood makes the blockbusters, but Germany does the visual effects

German firms have captured a lucrative niche: the visual effects for movies and TV. But to defend its lead against rivals, the Germany industry will need more public money.
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Germany is excited about the new film “Jim Button and Lukas the Engine Driver,” an adaptation of a beloved children’s book. It was released domestically in March and will come out in the US next year. The production cost €28 million ($34 million), exorbitant by German standards, with nearly a third going to visual effects, a domestic record.

Most films these days have at least some visual effects, and digital techniques that were previously used for minor adjustments are now creating entire worlds. German companies including Trixter, Mackevision and Rise fx develop landscapes and characters that merge seamlessly with real-world footage. Shoots no longer need to be cancelled because of shoddy weather or missing permits.

Germany's digital-effects industry has grown from nearly nothing over the past 15 years to about 700 employees and €25 million in annual revenue. It is now playing a leading role and has major Hollywood blockbusters on its reel: The Avengers series, “Game of Thrones,” Martin Scorsese’s “Hugo.”

Special effects artists can work for months on one tiny detail of a major motion picture. For the critically acclaimed series “Babylon Berlin,” Rise fx had 70 artists working for an entire year to recreate the capital city of the 1920s.

They’re the hidden champions of the industry. Dennis Gansel, film director

But while public funding is a major factor for most films’ success, that financial support is rarely funneled to visual effects outfits. Unless more German states reroute funding, the country risks losing projects and talent to countries like New Zealand, England and Canada, which offer bigger tax credits to production companies. Scanline’s Thomas Zauner, a pioneer in the visual-effects industry, says he has trouble filling some positions despite the demand for his firm’s work, as seen in “The Chronicles of Narnia,” “Batman vs. Superman” and “Iron Man 3.”

Scanline has made a name for itself as a water specialist — foam, steam, splashes — ever since it worked on a project for the film “300” that no other studio wanted to touch. Hollywood accounts for half of Scanline’s billing at this point: In addition to its home office in Munich, the company has outposts in Stuttgart, Los Angeles and Vancouver.

The Scanline office in the western Canadian city has up to 350 workers in the busy season, aided by the government’s direct support of film production labor costs. In Germany, Mr. Zauner says Bavaria’s government is the most progressive domestically when it comes to visual effects funding support, and that’s why most special effects companies are based there.

Bavaria, Baden-Württemberg and Berlin have made proposals, but if Germany wants to be competitive at the international level, there must be a federal film tax credit plan, industry insiders say. Currently the minimum threshold for film production support is €8 million, but that number is supposed to be lowered this year.

“Jim Button” got €9.7 million in state and federal support, some of that channeled to five visual effects studios. “For me, they’re the hidden champions of the industry,” director Dennis Gansel says. “Visual effects are a tool that expands the fantasy of directing.”

Christian Wermke is an editor for Handelsblatt covering politics, corporate executives and lifestyle. To contact the author: [email protected]