"Freedom in our country is very extensive and I am against the idea of responding to each specific situation with criminal and legislative changes," he told Deutschlandfunk radio station.
There had been calls from within the ranks of Friedrich's own party for a change to paragraph 166 of the German constitution, which lays out penalties for insulting the customs and beliefs of religious communities.
But Friedrich said that a societal debate was needed. "This is not something that legislation and criminal law can take the place of," said Friedrich.
The video was covered by the right to freedom of expression and artistic freedom, added the minister "whether or not it offends some individuals".
Last week Friedrich had said he would use all legal means to prevent the film from being shown in public by a far-right group in Berlin.
"There is freedom of expression and artistic freedom, that is not to be disputed," he said, adding that he was against allowing the film to be shown in public. "This cannot be in our interest," he said.
The low-budget film made in the US at least superficially prompted violent anti-Western unrest in many Muslim countries. Extremists in Libya killed several US embassy staff including the ambassador earlier this month, while the German embassy in Sudan was stormed.
Yet the situation is complicated - in Libya, extremists who killed were in turn targeted by people furious at the embassy attack.
The film was followed by cartoon mocking the Islamic Prophet Mohammed in French satirical magazine Charlie Hebdo.
Thousands protested against the film peacefully in Germany over the weekend.
Friedrich added said there was no evidence that Germany was more at risk of terrorist incidents because of the film or the French cartoons.
Germany's integration commissioner Maria Böhmer told Sunday's Frankfurter Allgemeine Zeitung that plans by the far-right group Pro Deutschland to show the film were an obvious attempt to stir unrest.
"It's not about opinion or artistic freedom for the people that want to do this," said Böhmer, "What they want is to disturb public order."
Similar sentiments were expressed by Berlin's state interior minister Frank Henkel, who said the planned showing of the film was aimed at nothing more than creating social divisions.