The term “mini-major” gets bandied around a lot in the world of international film and television, but if the label applies to anyone, it applies to German group Constantin Film.
The producer-driven powerhouse is one of Germany’s, and thus Europe’s, leading independent producers of big- and small-screen content, with a deep slate that runs, on the film side, from video game adaptations, such as Monster Hunter and the juggernaut Resident Evil franchise, to the Oscar-nominated WWII drama Downfall, and in high-end TV from period dramas KaDeWe – Our Time Is Now and We Children From Bahnhof Zoo, produced for German public channel ARD and Amazon Prime, respectively, to YA fantasy series Shadowhunters: The Mortal Instruments and upcoming series on the events of the Nuremberg trials, produced with Frank Spotnitz’s Big Light Production (The Man in the High Castle), and Smilla’s Sense of Snow, a series adaptation of Peter Hoeg’s 1992 Nordic noir best-seller, which Belle director Amma Asante is helming.
The company had a rare setback recently when Netflix canceled its ambitious live-action TV adaptation of Resident Evil after just a single season on the streamer.
It’s been a tough few years for the production industry, which emerged from the COVID pandemic straight into an inflation and cost-of-living crisis that has strained budgets and put downward pressure on revenues. The international television industry, which is gathering this week at global TV market MIPCOM, is going through unprecedented upheaval, with major strategic shifts at Netflix and Disney+ — both of which are introducing ad-supported tiers to their services — and disruptive re-organization at Warner Bros. Discovery in the wake of the mega-merger that created the company.
But speaking to The Hollywood Reporter, Constantin heads Martin Moskowicz and Oliver Berben were cautiously bullish that their focus on production and original IP, combined with an agnostic attitude towards distribution, will allow them to weather the storm.
Let’s start with your theatrical business. What’s your assessment of the box office in Germany right now, post-COVID, and how is the market situation impacting your production strategy?
Martin Moskowicz Right now, depending on how you measure it, around 25 to 35 percent of cinema-goers haven’t come back to theaters post-COVID. These are typically more older viewers who, of course, also go more frequently to upscale films. Hopefully, over time, that will improve. I don’t want to get involved in speculation. I can say: we will continue to produce and release theatrical films. It’s part of our DNA. Both German-language and English-language movies.
But we are being very careful about which films we are making because you can clearly see the films that are working now are ones where audiences have the feeling they have to see them in a cinema. It’s that famous phrase, theatricality, that’s going through Hollywood and the whole global cinema industry right now. The films have to be so attractive that people, to be blunt, are willing to get their butts off the sofa and pay money to see them.
We had a huge success with the latest installment of German crime comedy franchise Guglhupfgeschwader, which is not a teenage movie, or a family film, it’s for an adult audience. And it drew 1.3 million views just in the states of Bavaria and Baden-Württemberg. Of course, many films go to streaming after a very short theatrical run and the potential there is greater than it was before COVID. But overall, theatrical movies have to be meticulously designed for a theatrical event experience. That may mean we make a few fewer movies, but I’m not talking about substantially fewer. In the past, we often produced 12 to 15 theatrical films a year. Maybe now it’ll be 10 or 11 a year.
How has your strategy changed on the international side?
MM We have films, like Monster Hunter, that we released in the middle of the COVID crisis and were able to make them commercially successful in ancillary markets, even though markets, like China, were not exploitable. But of course, we are being very careful in what we do. I think it will become increasingly important to be able to react flexibly to the markets. Two big markets, China and Russia, have all but disappeared. America is prohibitively expensive to release theatrically due to the high P&A costs there. So that has an impact. On the other hand, the cake as a whole, with streaming and other ancillaries, is getting bigger.
So you can clearly see a shift. If a movie today doesn’t do the numbers in the cinema that it might have 5 or 10 years ago, but makes more in ancillaries, you have to be smart about how much money you spend on advertising. We are just about to start filming In the Lost Lands, a big-budget film directed by Resident Evil helmer Paul W.S. Anderson based on a George R.R. Martin story with Milla Jovovich and Dave Bautista. It will be released in cinemas all over the world in 2024. But on some movies we’ll do hybrid deals in some places: go all-platform in certain territories or straight to service or television in others. I think you have to have that flexibility. Certain projects are theatrical films in some territories and not in others. The After franchise, which we didn’t produce but released [in Germany], worked really well in theaters in Germany, but in other countries came out on Amazon. I think you have to get away from this cliché thinking that everything has to be either a theatrical film or not everywhere. You have to stay flexible to survive.
Olivier Berben In some ways the situation is almost better now because before we didn’t have this hybrid model, and that meant if we couldn’t do a theatrical deal in the U.S., for example, the project wouldn’t get made. Today you have the opportunity to set up, finance and release the projects differently. [YA fantasy film] Silver is a typical example. It was a project we developed as a theatrical film but when we did an evaluation of the market, and the budget — it’s a very expensive production — we thought it would work best on Amazon. So we did an exclusive deal with them.
MM Another film, which is in post-production, is Perfect Addiction. It’s an English-language film based on a Wattpad bestseller. The film will be released in cinemas in some countries, including Germany, in other places, it will also go out on Amazon. We can decide on a case-by-case basis what makes the most sense to both maximize the returns on the one hand and at the same time make sure that the films reach the widest possible audience.
OB Our Hagen project takes things even further. We are producing [the German fantasy epic] both as a theatrical film and as a six-part TV series. There will be some territories where both will be shown, some where maybe just the series and some where maybe just the film (will be shown). A few years ago, it would have been almost completely impossible to finance and produce a production of this magnitude as a German-language show out of Germany alone.
MM The budget is in excess of €50 million ($50 million). So producing this way makes economic sense, but also makes creative sense. We’ve done this before, producing a film and TV production together, on very big projects like Downfall, The Baader Meinhof Complex or Pope Joan, where we did a film and a two-part mini-series. But with Hagen, the narrative perspective in the series will be very different from that of the cinema version. They are being produced together but they are independent products. When we announced we were doing it, I received more calls from American studios and producers than I’ve ever had for any project, asking exactly how we are doing it. Because of course, everyone is trying to find that synergy between this immense streaming market and the theatrical market. How can you get synergies without dropping one or the other? And for the first time at Constantin Film, we’ve had Oliver’s department and producers from TV and the cinema people sitting down, developing the project hand-in-hand. It’s completely new territory for the company.
Oliver, can I ask about streaming? We’ve seen a lot of disruption and re-organization recently in the European operations of Netflix and HBO Max. Is this a sign of a shift in the streaming market?
OB Fundamentally, we are no longer in the “golden times” that have been so often invoked. The reality is that the days of happy spending are over, things have calmed down on all levels. Incidentally, this is completely normal: when new players enter a market, American companies in particular, they do so by spending a lot of money, to occupy the market and also testing it. Now the market is occupied, and the next few months and years will be about cleansing. There will be a lot of M&A activity and probably only a few players will remain, and it’s relatively clear which ones they’ll be. It’s difficult to compare the different streamers, because they are almost like different planets. Netflix and Amazon have completely different business models. Netflix and Disney too. Disney comes out of the studio system, very market-oriented, very franchise-oriented, with everything from theme parks to merchandising. Netflix doesn’t have those big brands and those other revenue streams, apart from now in gaming.
Amazon and Apple don’t and won’t have any problem in the future raising financing for their projects, because film and TV isn’t their core business, it’s more an add-on. What will be interesting to see is what happens with the studios other than Disney: Warner, Paramount, Universal. I think a lot is going to change in the coming months.
It will be interesting to see how much they want to rely on the exclusivity of their content, which was the be-all and end-all in the beginning. Warner has made a 180-degree turn in this respect. They were the absolute number one in licensing, the best in the business. Then they shifted to wanting to keep everything in-house. Now they are going in a different direction again.
Sony, by contrast, which didn’t set up its own platform, has come through the first wave of streaming as the absolute winner, because they could sell to everyone.
The last studio, of course, is Universal. They’re going to be very exciting to watch, because they together with Comcast have very different services, with for example Sky in Europe and with Peacock in the United States.
Are you starting to see real differentiation between the streamers, in terms of the series and films they commission?
OB Well, you can see that from their target groups that Amazon is clearly the broadest service, it’s used by people across the generations. It is a streamer that is extremely good for so-called four-quadrant movies and shows that are aimed at all age groups. Netflix is still younger, although the average age has increased. At Disney, with their connection with Star and Hulu, you have a relatively clear positioning and idea of the kind of program that they want. So, yes, there are differences. But when we develop material, we don’t think “what is there an audience for?” and develop something for that, because that changes so quickly. We approach productions the other way around. We try to create extraordinary material, largely independently, and then we think: what is the best target group for this film or series and where is it? That changes too. There were times when we’d have gone to Netflix with certain programs and now we go to Amazon, or vice versa.
What are the greatest challenges for Constantin Film at the moment?
MM Because we are producers, we are by nature very optimistic and, of course, we have data to back things up. We’re not just running through the world like Forrest Gump thinking everything’s going to be great. But Constantin is primarily a production company, we’re in the business of software creation.
And production is going through an extremely difficult time at the moment that only to a limited extent has to do with the issue of theatrical exploitation. We have a plethora of massive problems in production. There have been cost increases across all areas. Nothing today costs the same as it cost a year ago. Funding and financing costs have tripled or quadrupled. We have an immense shortage of skilled workers and that’s putting upward pressure on costs. At the same time, we have massive inflation and a cost-of-living crisis. And we’re not in a business where we can just cut costs by, say, making shorter films. These problems apply to everyone in the industry. Everything is getting more expensive. And I don’t think it is going to change in the next 18 to 24 months.
Does that mean we’ll see fewer films overall getting made?
MM In the cinema sector, definitely. And that’s a good thing. We plan to only make the successful movies and leave out the failures (laughs). Seriously though, there will be fewer movies made, and that’s a good thing, because the market was already saturated everywhere in terms of product. When it comes to streaming, we were already noticing, compared with the boom times of five years ago or so, there has been a cooling-off period. That doesn’t mean that successful series aren’t being re-commissioned for new seasons, but we’re noticed more shows getting canceled and a pullback on more middle-of-the-road product. For us, we are producing at capacity anyway. We can’t produce more than we are making at the moment.
Speaking of cancellation, will there be a new season of the Resident Evil series somewhere, now that Netflix has declined to re-up it?
OB We can’t tell you at the moment what we’re planning, but it’s no secret that Resident Evil is the biggest and longest-running franchise our company has ever had.
MM We still have big plans for Resident Evil, with this universe of characters. We’re working on various projects at full steam. Resident Evil is by far the most successful franchise that Constantin Film has ever had. So just because one series didn’t get renewed, doesn’t mean we’ll throw in the towel.
