Germany 2013 in Review: Business Booms, Rupert Murdoch Doubles Down on Sports

Germany's industry was flush but the low-budget film "Oh Boy" was the critical hit of the year.

Europe’s economic powerhouse enjoyed another year of growth, "Oh Boy" beat "Cloud Atlas," and Bertelsmann built its war chest for a possible international expansion.

As much of Europe suffered through 2013, Germany enjoyed the best of days.

The local film, TV, video and music industries posted strong -- for some, even record -- numbers, and a handful of mega-mergers and deals point to a positive 2014.

Creatively, things were more barren, with few stand-out films or local series making their mark outside the country. One of the few exceptions was Jan Ole Gerster’s directorial debut, Oh Boy, which won big at Germany’s film academy honors and took best feature at the European Film Awards in Berlin in December.

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Here is THR's look at the big news and trends that affected the entertainment industry in Germany in 2013:

Bertelsmann Builds War Chest, Buys Big
German media giant Bertelsmann had a busy year. The company completed its takeover of BMG, securing a music rights catalog of more than 1 million songs, including works from Bruno Mars, and Johnny Cash. It also merged its American publishing arm Random House with Penguin from U.K.-based Pearson to create a new publishing giant, Penguin Random House. And it set up a joint venture between TV subsidiary RTL Group and CBS Studios International to launch a series of themed channels in the fast-growing markets of Southeast Asia.

More, and bigger, things are likely to come. Bertelsmann has built up a $2 billion war chest to spend on acquisitions and expansions after raising $1.8 billion from the sale of a 17 percent stake in RTL and some $110 million by cashing out of its 7.5 percent stake in Russia's National Media Group.

Vodafone Bets Big on German Cable
U.K. mobile giant Vodafone completed a $10.4 billion takeover of leading German cable TV operator Kabel Deutschland, beating out John Malone’s Liberty Global.

The mega-deal sees the British cell phone group betting big that customers will want a one-stop shop for everything from Internet, cable TV, telephone and mobile services. 2014 is likely to show the first signs of how the deal is working out.

Box Office, Video and Music Sales on the Up
Germany’s box office remained on course to beat its record gross of 2012 as theatrical revenues hit $680 million in the first half, a 7.5 percent year-over-year gain. Higher ticket charges for 3D screenings played a role, but attendance figures also were up slightly.

Meanwhile, the German home entertainment market continued to buck the industry's downward trend, with first-half sales hitting a new record of just over $1 billion. And industry analysts at IHS forecast that Germany will for the full year 2013 finally pass the U.K. to become Europe’s No. 1 market for Blu-ray discs, with 32.2 million units sold.

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There was even good news for the long-suffering music industry, which ended more than a decade of decline in Germany. Booming digital revenues helped boost first-half total revenues to $800 million, a 1.5 percent  increase. While the sale of traditional CDs continued to slide, revenue from music streaming shot up some 105 percent.

Commercial TV Boom, Public TV Woes
Germany's two main commercial broadcasters, ProSiebenSat.1 and RTL Group, had banner years, buoyed by the still-strong TV advertising market. First-half operating profit at RTL jumped 9.1 percent to $678 million, the second-highest result in the company's history. Meanwhile, ProSiebenSat.1 raised its targets for 2015 and beyond, forecasting improved performance across all of its main operations. ProSieben CEO Thomas Ebeling said revenue in 2015 would be $1.1 billion above levels in 2010, some $270 million more than previously forecast.

A perfect time then, for ProSieben's main shareholders to cash out. Equity investors KKR and Permira confirmed they were beginning their slow withdrawal from the company, starting with the sale of 25 million shares, or about 11 percent of the company, worth more than $1 billion. KKR and Permira will have about 33 percent of ProSieben’s share capital after the sale.

It was a different story with the public broadcasters. A series of scandals and chronic mismanagement at Germany's public networks ARD and ZDF in 2013 led to a drastic scaling back in content acquisitions, particularly in feature films – both U.S. and German. The situation got so bad that Germany's independent film distributors banded together to form a lobbying group to protest the cuts and demand that the public networks commit to German cinema.

'Oh Boy' Beats 'Cloud Atlas'
Oh Boy, a low-budget black-and-white film from first-time director Jan Ole Gerster, beat out $100 million epic Cloud Atlas to win the best film award at the Lolas, Germany's version of the Oscars.

Oh Boy also nabbed the honor for the best first feature at the European Film Awards, held in Berlin in December.

The film, however, didn't get nominated as Germany's entry for the best foreign language film Oscar. Instead, the country picked Two Lives from director Georg Maas for the Oscar race.

High-End TV Coming to Roaring Berlin
Germany has been late to the high-end TV boom sweeping Europe (think Britain’s Downton Abbey, Denmark’s The Killing and France’s The Returned).

But that looks to be about to change with the announcement that the Cloud Atlas director-producer team of Tom Tykwer and Stefan Arndt is developing a high-end TV crime series set in 1920s Berlin during the rise of the Nazis. Based on the best-selling Gereon Rath novels by German writer Volker Kutscher, it will face some direct competition from a separate 1920s Berlin detective project being developed by commercial network RTL.

Murdoch's Sky Deutschland Doubles Down on Sports
Sky Deutschland, the German pay TV group controlled by Rupert Murdoch's 21st Century Fox, still hasn’t made a full-year profit, but it reaffirmed its commitment to the territory with some major investments in sports programming.

These included an $80 million deal to buy up TV sports production company Plazamedia and take a stake in sports TV channel Sport 1, along with a major agreement to extend its rights deal with European soccer body UEFA for top soccer tournament the Champions League through 2018. 

Separately, 21st Century Fox has signed a multiyear deal with Germany's top-flight soccer league to carry Bundesliga matches across 80 territories, including North America.

Germany Says Goodbye
Germany lost its favorite, and most influential, literary critic this year when Marcel Reich-Ranicki died at the age of 93. This Poland-born Jew who survived the Holocaust became one of the country's most outspoken and influential literary voices. Known by his fans as well as his detractors as the “Pope of Literature,” he was a TV celebrity whose opinions could launch a career or, no less frequently, end one.

Otto Sander, one of the greatest German theater stars of his generation and a TV and film actor whose roles included parts in Das Boot, Wings of Desire and Tin Drum, died at the age of 72. He appeared in some 130 films and TV series, creating unforgettable characters, such as the angst-ridden angel in Wim WendersWings of Desire, later remade as City of Angels (1998), and the shell-shocked submarine captain in Wolfgang Petersen’s WWII film Das Boot.

And in a shock to many in the industry, the 61-year-old director Peter Sehr died of a brain tumor. A scientist turned award-winning filmmaker, Sehr had an eye for young talent and a feel for political period drama. His breakthrough was the 19th century conspiracy thriller Kaspar Hauser (1994). His English-language features included the romantic drama Obsession (1997), starring a pre-James Bond Daniel Craig, and crime story Love the Hard Way (2001), featuring a pre-Oscar Adrien Brody.