The rugged rocky landscape towers all the way up to the ceiling of the large hall - 11.5 meters (38 feet) high. It looks like it would take Goliath powers to move these stones, but that is not the case at all. The landscape is actually made of Styrofoam, though it's deceptively realistic.

This is the set for the 3D production of "Hansel and Gretel," featuring Jeremy Renner and Gemma Arterton in the leads and directed by Tommy Wirkola.

International recognition

Carl Woebcken, majority shareholder and chairman of the Babelsberg studios, is convinced this project will get a lot of attention. Other large-scale productions from the Babelsberg studios have also received international praise, such as the action movie "Speedracer," the drama "Operation Valkyrie" starring Tom Cruise, or the film adaptation of the novel "The Reader" with Kate Winslet and David Kross.

According to Woebcken, Babelsberg is the only large-scale studio in Germany suitable for huge film productions that require a lot of equipment and props.

"This holds true for both the number of studios and the technical equipment and the large number of employees working on the productions," explained Woebcken. "We developed them over time during many different productions, which is why we can draw our strength from these international experiences."

The art of illusion

In addition to the full-time employees, up to 1,500 freelancers work at Babelsberg when large-scale productions are in progress. They know how to use modern techniques to make any hand-made set look real.

It's not a coincidence that their workshops are referred to as "art departments." For Tom Tykwer's "The International," for instance, New York's Guggenheim Museum was rebuilt almost in original size in just 16 weeks.

Seven years ago, Carl Woebcken and his partner Christoph Fisser took over the studios from the media concern Vivendi. At the time, the studios were heavily in debt and in the beginning the new owners couldn't manage to get the company out of the red, despite a series of restructurings and lay-offs.

The upswing did not come until 2007 when the German Film Fund (GFF) came into being and 60 million euros ($85.5 million) were made available annually by the German government to promote Germany as a location for film production. This money can supplement other funding measures, as long as part of the film is done in Germany. Even international productions are eligible.

The GFF was a very important milestone, said Carl Woebcken - not only for Babelsberg, but also for Germany as a center for film production and as an attractive coproduction partner for international filmmakers.

Competition at home and abroad

In general, filmmakers can be very flexible when choosing a location, as long as the necessary infrastructure and financial support are available. "Operation Valkyrie" with Tom Cruise, for example, was subsidized by the GFF with $4.8 million. With that money, Babelsberg studios were able to offer everything from chauffeurs for the stars to historically accurate props and costumes from its extensive on-site collection.

According to Woebcken, other German states are now trying to get in on the game as well. Within Germany, Bavaria and North Rhine Westphalia are emulating Babelsberg and at the international level, London, Prague and Budapest are all key players.

"To be honest, this is when the GFF is brought to its limits," commented Woebcken.

The more large-scale production sites there are in Germany, the more demand there will be for the GFF subsidies. Of course, the funds are limited and Woebcken says they should be increased, especially as the international competition gets stronger.

In 2009 and 2010, Babelsberg wasn't able to match its revenue from the previous years. It will likely fall short again this year as well, according to Woebcken. However, there's enough work to do for everyone at Babelsberg - with series, many smaller productions, and the huge 3D production of "Hansel and Gretel" currently underway.

Author. Silke Bartlick / aw

Editor: Kate Bowen