Markus Schäfer has spent his career at the intersection of Germany’s public broadcasting system and the international format market. As a President and CEO of ZDF Studios and former deputy chairman of the entertainment section of the Produzentenallianz, he understands the German ecosystem from the inside and can compare it rigorously with the markets he works with internationally. His opening observation sets the frame: Germany is the world champion in exporting as an economy. In entertainment, it is the world champion in importing.
Schäfer’s first hypothesis about Germany’s format import dependence is structural. Germany is one of the largest television markets in Europe, and for most of its broadcast history, that size was sufficient.
This inward orientation was reinforced by the total buy-out business model: broadcasters paid 100% of production costs and retained all rights. Producers received a fee and nothing more. International success was financially irrelevant to the people creating the content. Production fees were generous by European standards, the second-highest budget per minute after the UK, which meant producers could build sustainable businesses without ever thinking about export.
“There was never a need to look beyond borders. And that is a very significant difference to territories like the Netherlands or the Nordic countries, which always had to consider co-productions or licence deals or sales from the beginning.”
– Markus Schäfer
Our reflections: Schäfer’s structural analysis confirms what the creative ecosystem model predicts: large domestic markets generate strong incentives toward risk minimisation, and the total buy-out model removes the economic rationale for producers to invest in internationally scalable format development. Germany did not make a strategic choice to be an importer. It made thousands of individually rational small choices that produced that outcome as an aggregate.
Alongside the structural explanation, Schäfer identifies a cultural dimension that operates independently: in Germany, entertainment is considered inferior to everything that qualifies as serious. The distinction between ‘Unterhaltung’ and ‘Ernst’ entertainment and seriousness runs through German cultural life from music to literature to television.
“I can cite a former colleague who said: I would rather tell my parents I play piano in a strip club than that I work in entertainment television.”
This has structural consequences. The most talented creative professionals systematically orient themselves toward scripted content. Development resources follow prestige. Federal public funding directs 95% of its support toward scripted film and drama. The entertainment sector employs as many people as scripted, generates comparable economic output, and contributes proportionally to GDP and receives neither the investment nor the recognition.
Our reflections: The cultural hierarchy Schäfer describes operates with particular force in a country where the ‘Bildung’ tradition runs deep. The creative ecosystem model identifies this as a status hierarchy problem: when the most talented people orient toward high-prestige formats, the development capacity for lower-prestige formats is systematically depleted. Entertainment becomes a self-fulfilling second-class sector. We see a similar situation in the USA, where non-scripted television is also known as alternative television.
Schäfer’s diagnosis of Germany’s core structural problem is formulated with particular precision. The cost-plus model rewards producers not for success but for expense.
“A producer in Germany is incentivised to produce expensively but not successfully. Each euro you negotiate with the broadcaster generates you twelve cents of gross profit. If this is the primary incentive model, it will be very difficult to be innovative, to strive for success, to strive for international success.”
He argues this will change, not primarily through legislation, but through economic pressure. Broadcasters facing declining linear revenues can no longer afford to pay 100% of production costs and take all rights. He is careful about timelines, however. The structural change will be gradual, driven by economic necessity rather than institutional design and even if it occurs, it will take further years to build the creative infrastructure that markets like the Netherlands and UK have accumulated over decades.
Our reflections: Schäfer’s incentive analysis is one of the clearest formulations in this research of why cost-plus contracting suppresses innovation capacity. It is not that German producers are incapable of original development, it is that the current incentive structure makes original development irrational. The ecosystem is producing exactly what it is designed to produce. Changing the output requires changing the incentive structure, not the talent.
Asked what he is jealous of when he looks at other creative ecosystems, Schäfer’s answers are immediate. First, respect: in the UK, being an entertainment producer carries the same professional status as being a film producer. In Germany, the stigma persists despite the sector’s economic significance. Second, terms of trade: if Germany had a rights framework comparable to the UK’s Communications Act, the incentive to invest in original development would be fundamentally different.
Against this backdrop, Schäfer identifies genuine movement. There is a trend in the market to shift programming budgets from fiction to non-scripted programmes. ZDF Studios has built original development capacity through a startup company. Education infrastructure is improving. He is not expecting Germany to leap into the top tier of format exporters. But the direction of travel has changed.
“We have to reconsider the incentive model so that there is a real carrot on a stick for creators and producers to invent something new, something innovative, something which can be surprising.”
Schäfer’s advice is aimed at commissioners specifically. In a media landscape where the real competition is no longer other broadcasters but YouTube, TikTok, and Instagram, playing it safe is the most dangerous strategy available. The formats that will matter are the ones that step outside the ordinary and that requires commissioners who are willing to take risks they currently avoid.
The sharpest lesson Schäfer draws from his own observations concerns 7 vs. Wild, the YouTube-native wilderness format that became the most-watched content in Germany by total eyeballs. When the format was sold and disconnected from its original creator, the audience sensed it immediately and the show lost its community. His conclusion: sometimes the DNA of the creator and the format are so tightly bound that separating them destroys the very thing that made it work. IP, in those cases, is not just a licence. It is a person.