• English Site
• > Germany
• > Berlin International Film Festival

Worry Lines Through the Botox

Berlinale Reflects Leaner Times for Movie Business

By Lars-Olav Beier and Martin Wolf

Last year the champagne still flowed, but in 2009 angst will dominate the Berlin Film Festival. Cutbacks by studios, concerns about financing and a big-budget thriller about an evil bank -- even the silver screen can't ignore the world economic downturn.

Every movie gets the villains it deserves. Bandits attacking Indians? It's a western. Hit men shooting police? A crime story. And when psychopaths try to achieve world domination, it's either a terrorist drama or a film about Adolf Hitler. Those are the usual suspects.

Since the financial crisis, though, a range of unexpected villains has started parading across the screen. Werner Schulz, a politician from Germany's Green Party, summed up the current mood a few days ago: "Now people are more afraid of their financial advisors than of al-Qaida."

One German director seems to have anticipated this development. Tom Tykwer, known for his bank robbery fable "Run Lola Run," will premiere his new thriller "The International" on Thursday, when it opens the 59th Berlin International Film Festival, or Berlinale. This time the bank itself is the villain.

The bank in the movie, in fact, is a criminal organization that commissions murder and homicide -- a "bad bank" worse than anything from the current nightmares of the world's finance ministers. The hero in "The International" is not a crusading protector of the public interest but British star Clive Owen ("Inside Man").

The financial crisis will set the tone at this year's Berlinale, the most important international film festival after Cannes. It will be the main topic of conversation at the parties and receptions, the festival's speeches, press conferences and in the haggling over film rights and new productions.

Will the movie business survive these lean economic times unscathed? Or will it benefit, even, since movies offer their audiences a form of escape? What will be the recession's long-term effects on the entertainment industry? What needs to change? These discussions may prove more pressing than the question of whether Kate Winslet is too sexy in her role as a former concentration camp guard in "The Reader," which will also compete at the Berlinale.

Until very recently, the film industry was riding high on last year's income figures. American theaters reported total box office earnings of almost $10 billion (€8 billion) in 2008 -- an all-time high and an increase of about 2 percent over the previous year. Countries like Italy and Canada also saw earnings above those of the previous year, and in France attendance in cinemas increased by more than 6 percent.

Even Great Britain -- a country especially hard hit by the financial crisis -- showed a record 5 percent increase. One reason was the film adaptation of Abba musical "Mamma Mia!" starring Hollywood's grand dame Meryl Streep. In Britain, "Mamma Mia!" bumped "Titanic" from its spot as the most successful film of all time.

In Germany, too, 2008 saw almost 2 percent more film attendance than the previous year. "We don't know the meaning of the word 'crisis'!" Steffen Kuchenreuther, president of the leading organization for the German movie industry (SPIO), proclaimed two weeks ago at the German Film Ball in Munich to frenetic applause.

Even the luxury cinema Astor Lounge, which just opened on Berlin's chic shopping street Kurfürstendamm, offering moviegoers wide leather armchairs and bottles of champagne at prices up to €590 ($750), is consistently sold out -- despite its steep admission price of €15.

These high times in the movie business made sense to Thomas Friedl of the newly founded Berlin production company UFA Cinema. Movies, Friedl claims, allow an "escape from hard reality."

Whistling in the Dark?

But a look at history suggests this has not necessarily always been the case. At the start of the Great Depression people did indeed escape to the movies in droves. In 1930, the year after the stock market crashed, Hollywood recorded its highest attendance levels in history. But the boom didn't last. In 1931 Americans were already spending less at the box office. The next year, studio earnings dropped by 25 percent and almost a third of all theaters had to close their doors. It took most Hollywood studios years to turn a profit again.

So the mantra that the movie business always profits from a crisis -- now being repeated over and over by theater owners, sponsors and filmmakers -- sounds like whistling in the dark.

Movie theater attendance seems to be decreasing slowly worldwide. In the United States it fell in five of the last six years -- the income figures now being so effusively celebrated are thanks to higher ticket prices. DVD sales, the industry's most important source of revenue, are falling -- by more than 5 percent in the U.S. alone. Last Thursday, the French company Thomson, one of the world's largest producers of DVDs, disclosed a level of debt that might threaten its survival. The company is currently seeking "solutions with potential investors."

The American magazine Businessweek poked fun at the consequences for Hollywood, writing that "it's hard to see the worry lines when half the city uses Botox, but the fear is there." And the trade publication Hollywood Reporter commented, "The days of easy money are officially over."

The studios have reacted the same way as other corporations: cutting back, economizing and letting employees go. Paramount now plans to release only 20 films a year, compared with 25 in 2008. Competitor NBC Universal sold a division called Rogue Pictures and announced plans to save $500 million in the next year. Sony has instructed its employees to stay in cheaper hotels, and private jets will be reserved for only a few superstars. Warner Bros. recently laid off 800 employees, amounting to 10 percent of its global personnel. This comes despite an enormously successful year, in which the Batman movie "The Dark Knight" alone brought in almost $1 billion globally.

Some Hollywood types can smell the fear among financial backers and hedge-fund managers who make many feature films possible in the first place. The "investors tend to be these unsophisticated non-film people who complicate the situation," complained Robert Redford in an interview with the Wall Street Journal. "They'll pull out at the last minute… and leave the filmmaker high and dry. …One has to wonder, 'Where is the money going to come from?' And I just don't know."

One answer may be India. Director Steven Spielberg has been trying for months to raise $750 million worth of credit for his studio Dreamworks. Reliance Big Entertainment, a Bollywood firm headed by Indian billionaire Anil Ambani, is involved in the deal, as is the American bank JP Morgan Chase. But fundraising is a difficult affair these days. Spielberg's investments with Bernie Madoff -- author of the largest Wall Street Ponzi scheme in history -- damaged one of his charitable foundations to the tune of millions.

Some people are even calling for government subsidies. "How about a blockbuster bailout?" suggests Peter Bart, chief editor of the entertainment trade magazine Variety. Bart has seen the crisis hit home. Last week his magazine, which earns money mainly through advertisements from film studios, announced that 30 employees would be laid off. Now Bart is angry. "If those idiots in Detroit have their hands out," he says -- meaning the American car manufacturers who have asked for government aid worth billions of dollars -- why not the arts as well?

Directors could just go ahead and shoot their feature films in Detroit, as Clint Eastwood has done. His new film "Gran Torino," which opens in Germany on March 5, comes across these days as disquietingly prophetic. Eastwood plays a retired Ford factory worker watching his Detroit neighborhood decline. The white middle class has moved out, and the streets are plagued with Asian and African-American gangs. Eastwood's character takes up a lonely fight against them. ("Get off my lawn!")

Eastwood, born in 1930, has memories of the Great Depression. "There was not much employment. People barely got by, but they were tougher." Now, Eastwood said in an interview, we live in a "pussy generation."

The Berlinale will show more than one film about hard economic times. Michael Winterbottom's documentary "The Shock Doctrine," for example, is based on a bestseller by globalization critic Naomi Klein and aims to show how Western governments and companies profit from wars and disasters in the Third World. In "The Wondrous World of Laundry," German director Hans-Christian Schmid documents towels and bed sheets on their way from Berlin luxury hotels to a laundry facility in Poland. And in "Eden is West," Greek director Constantin Costa-Gavras follows an immigrant on an odyssey through Europe, where work is becoming a scarce commodity.

Outside the festival, the movie business will continue with its old recipes for success -- like laughter as a way to overcome fear. "New in Town," which just opened in the U.S., presents the saccharin love life of a manager (Renée Zellweger) who's charged with closing a small-town factory. (Every film has the villains it deserves.) The Disney film "Confessions of a Shopaholic," which opens on March 12 in Germany, centers on a young journalist in New York (Isla Fisher), who goes on shopping sprees in shoe stores and boutiques although she's long since maxed out her credit card.

Tasteless fantasy for these difficult times? Far from it. The movie's young protagonist knows all about economic trouble and, well, low pay. She works for a financial magazine.