[16] At home, the German film industry confronted an unstable economic situation and the devaluation of the currency made it difficult for the smaller production companies to function.

In 1925 UFA itself was forced to go into a disadvantageous partnership called Parufamet with the American studios Paramount and MGM, before being taken over by the nationalist industrialist and newspaper owner Alfred Hugenberg in 1927.

[19] Due to the unstable economic condition and in an attempt to deal with modest production budgets, filmmakers were trying to reach the largest audience possible and in that, to maximize their revenues.

The film featured a dark and twisted visual style – the set was unrealistic with geometric images painted on the floor and shapes in light and shadow cast on walls, the acting was exaggerated and the costumes bizarre.

[22] Pabst, in his film Diary of a Lost Girl (1929), tells the story of a young woman who has a child out of wedlock, is thrown out into the street by her family and has to resort to prostitution to survive.

The uncertain economic and political situation in Weimar Germany had already led to a number of film-makers and performers leaving the country, primarily for the United States; Ernst Lubitsch moved to Hollywood as early as 1923, the Hungarian-born Michael Curtiz in 1926.

Among them were such key figures as the producer Erich Pommer, the studio head of Ufa, stars Marlene Dietrich and Peter Lorre, and director Fritz Lang.

Entertainment also became increasingly important in the later years of World War II when the cinema provided a distraction from Allied bombing and a string of German defeats.

In both 1943 and 1944 cinema admissions in Germany exceeded a billion,[32] and the biggest box office hits of the war years were Die große Liebe (1942) and Wunschkonzert (1941), which both combine elements of the musical, wartime romance and patriotic propaganda, Frauen sind doch bessere Diplomaten (1941), a comic musical which was one of the earliest German films in colour, and Vienna Blood (1942), the adaptation of a Johann Strauß comic operetta.

[34] The authorities in the Soviet Zone were keen to re-establish the film industry in their sector and an order was issued to re-open cinemas in Berlin in May 1945 within three weeks of German capitulation.

DEFA had particular strengths in children's films, notably fairy tale adaptations such as Drei Haselnüsse für Aschenbrödel (Three Hazelnuts for Cinderella) (1973),[41] but it also attempted other genre works: science-fiction, for example Der schweigende Stern (The Silent Star) (1960),[42] an adaptation of a Stanisław Lem novel, or "red westerns" such as The Sons of the Great Mother Bear (1966)[43] in which, in contrast to the typical American western, the heroes tended to be Native Americans.

[46] The huge box-office hit The Legend of Paul and Paula was initially threatened with a distribution ban because of its satirical elements and supposedly only allowed a release on the say-so of Party General Secretary Erich Honecker.

[citation needed] In the late 1970s, numerous film-makers left the GDR for the West as a result of restrictions on their work, among them director Egon Günther and actors Angelica Domröse, Eva-Maria Hagen, Katharina Thalbach, Hilmar Thate, Manfred Krug and Armin Mueller-Stahl.

[citation needed] Following the Wende, DEFA had ceased production altogether, and its studios and equipment was sold off by the Treuhand in 1992, but its intellectual property rights were handed to the charitable DEFA-Stiftung (DEFA Foundation) which exploits these rights in conjunction with a series of private companies, especially the quickly privatized Progress Film GmbH, which has issued several East German films with English subtitles since the mid-1990s.

In addition, the Occupation Statute of 1949, which granted partial independence to the newly created Federal Republic of Germany, specifically forbade the imposition of import quotas to protect German film production from foreign competition, the result of lobbying by the American industry as represented by the MPAA.

Amidst the devastation of the Stunde Null year of 1945 cinema attendance was unsurprisingly down to a fraction of its wartime heights, but already by the end of the decade it had reached levels that exceeded the pre-war period.

[32] For the first time in many years, German audiences had free access to cinema from around the world and in this period the films of Charlie Chaplin remained popular, as were melodramas from the United States.

The defining genre of the period was arguably the Heimatfilm ("homeland film"), in which morally simplistic tales of love and family were played out in a rural setting, often in the mountains of Bavaria, Austria or Switzerland.

[49] The only exception is the Jewish American officer, who is shown as both hyper-intelligent and very unscrupulous, which Bartov noted seems to imply that the real tragedy of World War II was the Nazis did not get a chance to exterminate all of the Jews, who have now returned with Germany's defeat to once more exploit the German people.

Other Edgar Wallace adaptations in a similar style were made by the Germans Artur Brauner and Kurt Ulrich, and the British producer Harry Alan Towers.

However a few German films and film-makers did achieve international recognition at this time, among them Bernhard Wicki's Oscar-nominated Die Brücke (The Bridge) (1959), and the actresses Hildegard Knef and Romy Schneider.

[32] As a consequence of this, numerous German production and distribution companies went out of business in the 1950s and 1960s and cinemas across the Federal Republic closed their doors; the number of screens in West Germany almost halved between the beginning and the end of the decade.

This call to arms, which included Alexander Kluge, Edgar Reitz, Peter Schamoni and Franz-Josef Spieker among its signatories, provocatively declared "Der alte Film ist tot.

Rosa von Praunheim, who formed the German lesbian and gay movement with his film It Is Not the Homosexual Who Is Perverse, But the Society in Which He Lives (1971), also plays an important role.

For their influences the new generation of film-makers looked to Italian neorealism, the French Nouvelle Vague and the British New Wave but combined this eclectically with references to the well-established genres of Hollywood cinema.

[59] Films such as Kluge's Abschied von Gestern (1966), Herzog's Aguirre, the Wrath of God (1972), Fassbinder's Fear Eats the Soul (1974) and The Marriage of Maria Braun (1979), and Wenders' Paris, Texas (1984) found critical approval.

The development of arthouse cinemas (Programmkinos) from the 1970s onwards provided a venue for the works of less mainstream film-makers like Herbert Achternbusch, Hark Bohm, Dominik Graf, Oliver Herbrich, Rosa von Praunheim or Christoph Schlingensief.

by Wolfgang Becker, Head-On by Fatih Akin, Perfume by Tom Tykwer and The Lives of Others by Florian Henckel von Donnersmarck, have arguably managed to recapture a provocative and innovative nature.

To compensate, Finance minister Gabriel announced that the difference will be made up from the budget of the Bundesministerium für Wirtschaft und Klimaschutz (Federal Ministry for Economic Affairs and Climate Action).

Critics accuse film funding in Germany of being institutionally fragmented, making it virtually impossible to coordinate all measures, which would ultimately benefit the quality of productions.