Avoiding Hitler would help, for about a decade, from Caligari to M, German cinema was probably the most creative in the world. Look at any list of films for the period and giants like Nosferatu, Faust, Metropolis, of course M all end up in the top ten or twenty films if not of all time then certainly that first half century.
All the way up to Lang's second Mabuse (1933), German cinema was on top of its game. Then came Hitler, and almost every director, actor and artist of any caliber headed for the exit, worse with Hollywood coming under the Hays code, it became much harder to produce subversive original films in their long exiles.
Without the Nazi's Dr Goebbels would not have called in Fritz Lang in that day in March '33 and told him Mabuse was to be banned but would he like a job. By late 1933 most of the best minds in the industry were in exile, and Germany produced one more influential film in the next twelve years and for all the technical brilliance of Triumph of the will its still a monstrous piece of Nazi propaganda.
Once the war was over no one was interested in German cinema, and unlike say the cinema of Japan its post war works never really gained a foothold in foreign markets. Without Hitler Germany might have remained the film capital of Europe and without the war Hollywood might not have taken such a totally commanding position.
German cinema defined many aspects of film, we owe much of the horror genre to Caligari and Nosferatu, Metropolis has influenced science fiction ever since, while M wrote much of the book on crime drama and film Noir. Its hard to say if a Nazi free German cinema could come to rival Hollywood but I could see it being at least as influential as British cinema was after the war, where studio's like Hammer defined (for instance) the horror genre right up until the fall of the Hays code.