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Wir Lieben Visuelle Effekte: Overview of VFX German Industry

Tulay Tetiker presents an overview of the many companies competing in the growing German visual effects industry.

Germany has been suffering from a trade depression since 2001. Media and post-production have suffered partly due to bankruptcies among post-houses, and to the stock market crash of the Neuer Markt and NASDAQ.

During the past decade Germany has gone through an important structural transformation. Despite a weak economy, the country has become a world leader in innovation and technological development. Perhaps some are not even aware of the fact that companies such as mental images (mental ray), Maxon (Cinema4D) and NXN (Alienbrain) actually come from Germany.

And it is no big secret that there has been a general depression in trade since 2001, especially in the domain of media and (interesting for us) the post-production industry. This is partly connected with bankruptcies among post-houses such as Das Werk, the Leo-Kirch scandal and the big uncertainty after the stock market crash of the Neuer Markt and NASDAQ. But I also see the lack of confidence in the skills of German vfx companies, notes Thomas Gronert of Missing Link Software Solutions. As soon as a production has enough budgets to implement vfx, they went to either the U.K. or to the States. Its often about minimizing the risk of capital loss so its logical that you are going to where they already have produced successful projects.

Andreas Burgdorff, ceo of Unexpected GmbH in Stuttgart, finds the reason in a large number of unfortunate chain of events: These were in part home-made and partly unpredictable. The global uncertainty of the world economy has definitely lead to the loss of many jobs, which caused, again, a market caution, especially among broadcasters, unfortunately in an extremely unfavourable moment, namely right at the climax or a bit after the `dotcom-bubble exploded. Many production companies invested a lot of money in new equipment during the dotcom-era or expanded over their limits; if the personnel that were carrying that weight on their shoulders are rationalized you can lose money very fast. In addition to that, banks became extremely cautious (after the bust) and everything that was dealing with Internet, vfx etc. was checked out extremely carefully. Our company was not really hurt by that crisis. Since 2001, our company grew by 400%. This has mainly to do with the fact that we dont have an armada of flame or inferno-workstations to maintain we are rather working on standard PCs and software.

Even with its weak economy, Germany has become a high-tech world leader with the rise of companies such as Maxon and NXN, whose founder/ceo is Gregor vom Scheidt (right).

I believe that because of the all the Internet-hype and the stock market crash, many people and especially the banks lost their trust in the digital business, adds Max Zimmermann from Fiftyeight in Wiesbaden/Germany. During the booming phase, we have been asked why we wouldnt go public with our company. We never could really understand that explosion of prices on the stock market. Maybe the recession that we have now was a necessary process in order to regulate the market.

The U.K. began to show a trend that has brought back optimism to Germany: 15,000 new jobs have been created there in the post-production-industry over the past few months. Twenty-five percent of the entire budget is used for the creation of visual effects. Unlike British projects, such as Harry Potter and the Prisoner of Azkaban (MPC/Framestore CFC/Cinesite/Double Negative), Alien vs. Predator (MPC/Framestore CFC/Cinesite/Double Negative) or Troy (MPC/Framestore CFC/Cinesite), there were no real international, big budget movies produced in Germany, contends Burgdorff. It is very difficult to accentuate advantages or certain strengths compared with London or Paris. But we definitely have caught up on them. Technology-wise everything is possible here and we have excellent educational institutions and a lot of experience in moviemaking and software development. We never had really big vfx budgets in Germany; thats why we are very good when it comes to improvisation and trying to produce good results with a small budget. I think our market has a lot of advantages over the competition mainly because of our prices. Vfx made in Germany are surely much cheaper than in London or Paris. Furthermore, there are possibilities for co-productions and film-funding.

Gert Zimmermann of filmtools Consult GmbH in Munich thinks that one of the major problems in Germany is film-funding: There are over 250 companies registered in Germany that are offering services in the fields of animation and visual effects. There is also enough budget available to produce big-budget movies. Munich-based Intermedia AG, for example, is significantly involved in movies like Terminator 3. Movies like Oliver Stones Alexander are financed by the German tax payers. German film-funds are investing millions of Euro in international projects everywhere else, but not in Germany.

Thomas Gronert of Missing Link Software Solutions sees a lack of confidence in German vfx companies, with productions choosing to go to the U.K. or U.S.

Burgdorff agrees: No company can afford to maintain departments that are working under full capacity. Why should they? An allround service provider is not really in demand at the moment. Instead there is networking among small, independent companies. And that makes more sense, because the customer is also doing his homework and wants his project in the hands of an expert, instead of letting the job be done by an allrounder. I cant talk for the whole German market, but at least its a trend I would wish would be more widespread and accepted.

The German market is strongly fragmented and affected by changes of names, start-ups, acquisitions and bankruptcies. For the moment, German companies have to almost exclusively concentrate on a national market. Many small as well as larger facilities are forced to accept all jobs possible. I just see some exceptions with big names like Arri, Scanline or VCC, says Gronert. You can see that even big feature animation companies like Trixter, Hahn Film AG or Toons N Tales are forced to also produce commercials once in a while. The need to generate money is tempting a lot of companies to deviate from specializing in a certain field of visual effects production.

Germany in general is not really well known for innovative movies or commercials that are relevant on an international basis at least not anymore, Gronert continues. A lot of good people are coming from countries that have a rich history in advertising or artistic imagery the U.K., France and Japan, for example. They have a better educational system than we have, at least for a longer period of time. Unfortunately, the few really good artists from Germany move to North America or the U.K., which is really sad. Our prices are usually cheaper than in England or France, maybe that can one day pay off in favor of us.

The crisis of the entertainment industry frightened off many investors that could have contributed to using post facilities at their maximum capacity. Pablo Bach of Liga01 says, Producers are demanding highest possible quality for a minimum amount of budget. I think its the fault of the post-industry itself that a lot of companies are producing under price, due to the lack of commissions. Many dont realize that in the end its not possible to break even like that. Unfortunately, customers have adapted this loss-making price level for their budgeting on a long-term basis.

Andreas Burgdorff of Unexpected GmbH thinks the tide may turn for Germany as vfx companies can produce good results on a small budget. Costs are cheaper than in London or Paris and there are possibilities for co-productions and film-funding.

Last June, an agreement was signed between Germany and Canada concerning audiovisual relations between the two countries. A similar agreement signed in 1978 is no longer in force. The aim of the new agreement is to create the necessary environment for German/Canadian co-productions in the film, television and video sectors, with the intention of promoting the German and Canadian film industries and encouraging cultural and economic exchanges. The German and Canadian governments are also convinced the agreement will strengthen relations between the two countries. The agreement itself contains several different provisions designed to make it easier for film producers to work together. For example, every co-production produced under the agreement is to be considered to be a national production for all purposes in both countries. This is so that the film producers can take advantage of measures to promote film production in both countries at once. The agreement also stipulates that, within the framework of their prevailing laws, both countries must allow film producers from the other country to enter their territory and take up temporary residence there and must grant them work permits. However, the promotion of co-productions is not without certain conditions. According to Article 4, for example, all participants in the making of the production must be either German or Canadian nationals, although in relation to Germany nationals also means nations of other EU member state or another contracting state to the agreement on the European Economic Area. Studio shooting and location shooting must also take place in one of the two countries. The competent authorities may, however, grant certain exceptions to these rules. Projects must also qualify as co-productions before shooting begins. The application process involves extensive documentation that must be addressed to the German Federal Office of Economics and Export Control, or Telefilm Canada in the case of Canada.

Many companies have specialized in specific business segments and offer services such as character animation for commercials or On-Air Design. The ephermerality of technology is also a reason why there is a trend away from full-service agency to experts in certain fields of post-production. In consequence of the difficult market, there are few start-ups; however, there is a rising upwards tendency. It seems as if there are more and more projects. But its hard to say if I have that impression because there is really more production or because there are less companies than two years ago, explains Burgdorff. I think the World Soccer Championships 2006 will surely have a positive influence on the German vfx scene. Big events like this usually attract a lot of investors. Furthermore, you can push technologies such as HDTV to become nationwide standard a bit faster. Consumer equipment might be too expensive for the moment, but the technology will surely manifest itself and the need for HD will rise.

Ambient Pictures believes that its work on Back to Gaya proves Germany is ready to produce high quality 3D work and turn a profit. © 2004 Warner Bros. Datenschutz und Nutzungsbedingungen.

Back to Gaya Ambient Ent.

Back to Gaya from Ambient Ent., meanwhile, is the first German-produced 3D-CGI feature film and enjoyed considerable success in Germany. The idea for Back to Gaya was born somewhere in 1999. It was followed by a few years of pre-production, and the actual work on the film eventually commenced in 2002. Back to Gaya was partially financed out of private pockets and funding by the state of Lower Saxony and the Nordmedia Corporation. It all sums up to a double-digit million Euro amount. Ambient Ent. also received some help from AMD, which supplied the company with as many CPUs as necessary for the required render power.

Gildas Gerdes from Ambient Pictures explains: I think we have demonstrated that if German companies provide the necessary financial means, we also can do 3D features of a high quality. We have the software, the experts, but the moguls still prefer to support Hollywood productions rather than native projects. And this also inevitably leads to the effect, that great CG artists are migrating to places, where the big productions take place. I think, with Back to Gaya, weve managed to make the about-turn in this regard and have shown, that you can do these projects even in Germany and still make profit!

There is hope that the World Soccer Championships 2006 will reverse Germanys downward financial turn, but Pablo Bach of Liga01 notes that the mascot was designed in England and the new Munich stadium was constructed by an Austrian company.

Jester Till Munich Animation

Jester Till is a true international production: helmed by a German (Eberhard Junkersdorf), produced in Munich, the talent, including a Belgian (Peter Carpentier, sharing story credit), an American (scribe Christopher Vogler), a Spaniard (character designer Carlos Grangel) and a Brit (comedian Lee Evans voicing the title role. Though it initially appears to be 2D, animation actually blends carefully rendered CG techniques with traditional 2D methods. Nearly half of the scenes contain 3D/CGI elements. With a production schedule thats two-and-a-half times the normal schedule and a budget of 15 million Euros, Jester Till is one of the most expensive animation projects in Europe.

Conclusion With anticipated government aid, Germany will hopefully soon be an attractive market again; however, there is still a lack of necessary networks and infrastructure to be internationally competitive. There are highly qualified artists and developers who arestill going abroad to work on the real high-end blockbuster projects that rarely exist in Germany.Meanwhile,commercials are mainly produced with a small increase in vfx-dominant TV-productions. Are the World Soccer Championships 2006 going to bring a reversal of fortune? Bach of Liga01 responds: It is not in our hands if German companies can really benefit from the Soccer Championships. The official mascot Goleo has been designed in England and the new stadium in Munich is constructed by an Austrian company. Even German breweries cannot even sell their beer in the stadium, due to a contract between the FIFA and one of the worlds leading softdrink manufacturers. Our government put a lot of effort to bring the soccer championships to Germany, they should also put their efforts in participating German companies in all the necessary arrangements. With almost five million unemployed, it should be a priority to discuss possible opportunities for Germanys economy and particularly our industry.

Tulay Tetiker is an industry expert, specialized in CG/Vfx. She has served as an editor for Digital Production magazine and CGChannel, and has a creative background as a freelance video editor. Currently, shes working as a PR manager and journalist and lives in Munich and Toronto.