Editors’ Note: With full acknowledgment of the big-picture implications of a pandemic that has already claimed thousands of lives, cratered global economies and closed international borders, Deadline’s Coping With COVID-19 Crisis series is a forum for those in the entertainment space grappling with myriad consequences of seeing a great industry screech to a halt. The hope is for an exchange of ideas and experiences, and suggestions on how businesses and individuals can best ride out a crisis that doesn’t look like it will abate any time soon. If you have a story, email firstname.lastname@example.org.
Heading into 2020, German producer-distributor Constantin Film was coming off a banner year that included the market’s No. 1 local picture, Perfect Strangers (Das Perfekte Geheimnis), a remake of the original 2016 Italian hit. Grossing €46 million, the title in part helped turn Germany’s box office fortunes around after a rough 2018. The company was preparing to ride that momentum into a new year and a strong slate. Then coronavirus slammed the breaks on the industry.
Amid the COVID-19 crisis, Constantin, whose credits include the Resident Evil and Fack Ju Goethe franchises as well as fantasy drama favorite Shadowhunters, has been forced to shut down about 30 shows that were in the works. Its Monster Hunter feature adaptation, starring Milla Jovovich and from Resident Evil director Paul W.S. Anderson, is still dated for a global fall release (Screen Gems has domestic and Sony worldwide outside German-speaking markets, China and Japan).
In a recent discussion with Deadline, Constantin boss Martin Moszkowicz highlighted how the company, with the help of the German government, is aiding workers to weather the storm. He nevertheless remains very concerned about the viability of smaller companies in the offshore major. He emphasized that the film industry must “be smart” and “fair to each other.”
DEADLINE: What is the status of Constantin staff at the moment?
MARTIN MOSZKOWICZ: Our offices are pretty much closed with very, very few people working who are not necessary — so, accounting, basically. Everyone at Constantin and in our crews so far is healthy. We don’t have any cases. Not only in Germany, but all around the world. But we are shut down on a worldwide level.
We are paying to keep the crews going. Overall costs are in the millions, we are not completely done yet on adding it up, but it is close to $5 million and we are trying to keep the crews as much as possible.
We have been affected heavily on costs which are tremendous, but we are in a position to ride it out.
DEADLINE: How is the government helping?
MOSZKOWICZ: In Germany, there are several instruments you have as an employer. You can put your crew into a short-term work situation and the government pays 60%-70% of salaries. Lufthansa is doing that, we are trying to do the same. I think Germany is the only country in the world that has that. The government keeps people in their jobs (even if they are not de facto working) so that they are paid part of their salary and not laid off. We are going to do that as much as we can… At this early stage, I don’t know how it is going to work out. We are talking with the authorities.
German subsidizers are also putting together a fund to help German producers with costs. The big TV stations have all said they would pay about 50% of whatever the costs are, up to certain limits, after pushing shows they have commissioned.
We are luckily in a good position financially, but I am concerned about smaller production companies who don’t have deep pockets and are in the process of facing millions and millions of costs and how they will be able to cope. I’m very concerned about the landscape. Hopefully we can save as many as possible, but there will be some casualties.
DEADLINE: If that were the case, would you expect more consolidation going forward?
MOSZKOWICZ: I hope so, but there is not much more to do at this stage.
DEADLINE: On what have you had to stop production or shift timing?
MOSZKOWICZ: We had to shut down over 30 shows all together, mainly stuff done in Germany, and in Czech Republic and Romania.
We still have 10 days to shoot on a big German comedy, Caveman. There are various scenarios, depending on the situation, to try to shoot those additional scenes. One starts end of April, another end of May, and another end of June. The release date is end of November so we can maybe get there.
Monster Hunter is still set for a September worldwide release. We are delivering it this week.
DEADLINE: And what about the status of other theatrical releases you had planned?
MOSZKOWICZ: We pulled a German comedy recently, Berlin Berlin, which was supposed to open last week. The next movie we had was Ostwind, the sixth part of a successful franchise, for May and that has been pulled. We are waiting to see how the distribution schedule looks. We have to be extremely careful as an industry so that the industry is not overwhelmed if everyone is jumping into the first few weeks.
We have to be smart about how we as an industry try to be fair to each other and not expect all movies in one quarter.
We have also discussed putting some movies out digitally. It’s a case-by-case decision regarding how much money was spent already theatrically.
DEADLINE: What is your thinking overall to deal with the shutdowns?
MOSZKOWICZ: To deal with a crisis of any kind is pretty much business as usual. We saw this when SARS broke out in China and tried to move our productions to different locations. Now we are starting to work on various scenarios for the time when production will be possible again.
It could be three to six months. That’s the same for exhibition and distribution. As nobody knows the box office blueprint, we have to hope that Constantin is small and flexible enough to change course. At the moment we are trying to deal with it. Our movies can come back.
DEADLINE: On theatrical titles you had previously set, can you just opt to go digital in terms of local rules?
MOSZKOWICZ: In Germany there are regulations that if you take a subsidy, you have to release theatrically. The government is flexible but also overwhelmed. We wanted to move Perfect Strangers a couple of days forward under the current window and went to the federal board. It was a unanimous decision, including exhibitors, that it was fine to go two weeks earlier.
Other [titles] have been tougher as theaters are for the moment hit the hardest. As a distributor you can still do business, but one has to be supportive of the landscape.
DEADLINE: What do you think the reaction will be once cinemas open again?
MOSZKOWICZ: I personally think there is going to be a huge demand if there is trust and confidence that it is safe to come back to the theaters. I hear that even from my colleagues in China. We are movie people, so we are always hopeful.
Something we will have to deal with in general is that there will be eases of whatever the measures are, and then again what scientists and politicians tell us. Depending on how the level of infection rises, they could reinstate measures.
Say theaters open in Germany on July 1, we have to reassure people it is safe to go to theaters and then not push everything into the first release schedule. This is a constant discussion with competitors. Everyone is understanding that this has to be the case, but people can be selfish to a degree. Everyone needs to be very, very smart about it.
DEADLINE: This situation is so unprecedented, though…
MOSZKOWICZ: It’s true there are very few comparisons, but if you talk to old producers who went through World War II, theaters were closed at least during the war years and people were so hungry to get back to the theaters. This was obviously before Netflix.
But there will be a time when people can’t watch each series five times and there will be hunger. Netflix and all others are going to be hit by the same production shutdown.
Everyone says at the moment, it’s Netflix that gets you through this terrible time, but it is also the writers, directors, actors and producers that are getting us through. We must remember the creative people behind this for so many people to sit at home and not get killed by boredom.
I must say that Netflix has been tremendously professional and helpful [on our productions]. I am very impressed with how they operated. We had a big movie going in Czech Republic with David Kosse’s London team and they were very amazing, spot on and trying to help our subsidiary production company.
DEADLINE: What a success story Perfect Strangers was; how is it doing digitally?
MOSZKOWICZ: It’s doing very well. Germany still has a little DVD distribution, even if a movie is on platforms, there are DVD sales. The main problem is to get DVDs to the point of sale. Amazon is the biggest seller of our DVDs and they have a central distribution point in Poland, from there, they distribute back to Germany. We had a big problem getting the manufacture of DVDs over the border, and a lot of points of sale are not open as supermarkets are concentrating on essential goods. But over the last few days the numbers are very good. The film is also streaming on all EST platforms, not on Netflix or Amazon, but others like iTunes. Those sales are superb.
DEADLINE: While this is a devastating situation playing out around the world, at least in our business it feels extra heavy for both Germany and Italy which had seen their box office rebound in 2019 after a pretty dismal 2018 for each…
MOSZKOWICZ: What is happening in Italy on so many levels is really terrible, probably more than in China or Germany. There is not a lot to say, other than hopefully it will be over soon and we can get back on our beats and hopefully do better than before. At this stage it’s pure optimism. We are doing what we can.
DEADLINE: Germany currently has the third-highest number of coronavirus cases on the continent, but it is sixth in terms of the death toll. What is the local thinking as to why this is the case?
MOSZKOWICZ: I am neither a doctor nor an epidemic analyst… There are several answers floating around: The quality of the German health system and a [relative] abundance of intensive care units; heavy testing (German labs have the highest testing capacity worldwide) and therefore a higher number of infected people discovered (with most of them having mild symptoms); the infections in Bavaria originated within skiing resorts in the Alps. Those skiers are usually healthier and younger.
DEADLINE: What is your outlook on the future right now?
MOSZKOWICZ: I will continue to produce movies and hopefully now we have time. These lockdowns are not possible forever and while we might be getting over it medically at some point, the economic fallout will be tremendous. There are people who need help now and will need help to get back on their feet again. We have thousands of people who work for us worldwide and we have a responsibility that they come back.
I will do what I can do, but I will produce movies, that’s for sure.
We came out of our best year in corporate history and we are healthy, and that’s important… We are in a lucky position because we didn’t have many movies to be released right now. We just have to be smart and flexible and innovative about the next 12 months… We have to keep optimism and spirits up. This could have hit us, as far as Constantin goes, at much worse times. But we are all in this together.