Amazon and Netflix Bet on Local TV to Win in Europe

In a wooded area just outside Berlin, excavators rumble across the sandy soil, and the sound of hammering fills the air as workers clamber up five-story-high building facades. This is Babelsberg, the studio at the heart of Germany’s film industry, which is building a $13 million outdoor set that stretches across an area the size of two football fields. Called Neue Berliner Strasse—New Berlin Street—it will be home to Babylon Berlin, a 12-episode TV series about the decadent final years before Hitler rose to power that’s scheduled to start shooting in April. Produced by Britain’s Sky and German broadcaster ARD and directed by Tom Tykwer, creator of the 1998 hit film Run Lola Run, “the project is of a scale unlike anything Germany has seen before,” says Elke Walthelm, who heads Sky’s German content business.

Germany is becoming the focal point in the battle for the European pay-TV market—delivered via methods such as cable, satellite, and streaming—which researcher IHS expects to grow to $58 billion in 2019, from $44 billion last year. Sky has boosted spending on original fare and allied with HBO and Showtime to distribute its shows, and Internet-based newcomers are wooing customers with local-language productions. Amazon.com in February said it’s hiring popular German actor Matthias Schweighöfer to direct and star in its first original series produced outside the U.S., a hacking thriller set in Berlin called Wanted. Two weeks later, Netflix announced its first German project, Dark, a supernatural series that will be directed by Switzerland’s Baran bo Odar, whose thriller Who Am I was a box-office hit in Germany. “Our U.S. original content travels well, but there is great TV being made in many countries,” says Jonathan Friedland, chief communications officer for Netflix.