New Zealand Film Subsidy Race Fires Up

Right off the heels of my last post comes a debate in NZ parliament yesterday about increasing the amount of subsidies offered to the film industry. It’s eerily similar to the recent debate in British Columbia where the incumbents already offered huge subsidies for film, but the opposition wanted to offer even more after losing work to other provinces.

The points made in the debate are exactly the problems I’ve written about for years concerning New Zealand’s film industry: The amount of subsidies doled out to US studios by the NZ government has stayed the same while other countries have raced to offer more money. The NZ dollar has hit record highs making it more expensive to do work for US studios and erasing the benefit of the subsidies.

According to the minister in the above video, NZ has handed out $NZD 411 million in subsidies since 2008. As large as that sounds, British Columbia doled out $CAD 437 million this year alone! New Zealand has a major challenge ahead of itself. With a GDP of 160 billion, it’s one of the smallest competitors in a big subsidy race. British Columbia by comparison is quite small also with a GDP of 215 billion and yet it too has trouble keeping up while handing out significantly more money.

The subsidy bubble keeps getting larger and the big bang in the end will be one of the most important events in VFX history.

Soldier On.

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71 Responses to New Zealand Film Subsidy Race Fires Up

  1. Burn Resolution says:

    It is impossible to sustain the unsustainable and to keep afloat that which has no real water to float on.

  2. Andreas jablonka says:

    Very interesting to hear this back and forth. Anybody know who the question poser is/works for?

  3. John Crane says:

    the opposition i would guess (political party in parliment)

  4. Dave Rand says:

    “..It’s not just about the size of the subsidy..we have to offer more than that..New Zealand is a great place to do business, a skilled and capable work force, flexible labor laws, natural scenery, and competitive labor costs…” Hon Steven Joyce New Zealand Parliament. ”

    Although the “flexible labor laws” are mostly due to American studios influences via subsidy demands and control. http://www.reuters.com/article/2010/11/09/us-hobbit-idUSTRE6A816P20101109

    Politicians have no business in entertainment. Like religion it is too easily corrupted into a tool to control what should flow naturally and on its gain ground on its own merit and growth potential.

    I’ve been saying for some time now there needs to be a Kiwiwood, a Maplewood, and Englishwood, an Ozwood..an so on… This will never happen as long as everyone stays on the American’s nipple.

    Subsidies are a tool to keep the fences up and the new comers out.

    Looks like Peter Jackson is ready to tell some New Zealand stories and move away from Hollywood blockbusters. http://www.theverge.com/2013/10/23/5008404/peter-jackson-looking-forward-to-stepping-off-hollywood-blockbusters

    • Dave Rand says:

      Soldier posted the Jackson story yesterday, sorry for the repeat just catching up after vacation

      • VFX_Reckoning says:

        Dave, I LOVE this:

        “…there needs to be a Kiwiwood, a Maplewood, and Englishwood, an Ozwood..an so on… This will never happen as long as everyone stays on the American’s nipple.”

        These words ring true and one of the best quotes I’ve seen summing up the entirety of the VFX industry. Thank you.

      • LAskyline says:

        So what’s your suggestion on how to achieve this vision of Nirvana with all the world getting its own wood? (pun intended). The big six have international distribution totally stitched up – there are so many examples of US studios colluding to force the competition out of business that it would fill up an entire blog.

      • Dave Rand says:

        Step 1 Read more history, and Never say never
        Step 2 Do what we can to take away the mechanisms, like subsidies, that help perpetuate the oligopoly. Soldier’s last posts cover how you can help do that.

      • Charlie Don't Surf says:

        Dave, for all the good intentioned suggestions, you seem to overlook the fact that Hollywood studios actively enforce their monopoly in distribution and exhibition, as well as leverage their current advantage of having the worlds largest film market ( soon to be overtaken by China, of course ).

        Getting rid of subsidies has no relationship to that.

        Further, I would also suggest that you are overlooking the fact that the current film industry, while dominated by the American studios, is already a cluster of international talent and financing. The money, production companies, directors and actors are not solely American. Most films are an international collaboration, when they are not outright co-productions, designed for the global market. Most of the revenues for the American film industry come from overseas.

        After a certain level of native success, international talent HAS to collaborate with the Hollywood studio system on some level, if they wish to enjoy global distribution, under the current model.
        No amount of wishful thinking will replace the fact that we have to exist in reality, in the present and we have to deal with current conditions. Foreign governments who wish to support their native talent are doing the rational choice ( for the time being ).

        It’s a good suggestion of yours to read history. May I suggest you read some critiques of Holllywood market domination?

        Perhaps it will offer a different perspective to the one you are accustomed to.

        http://eprints.qut.edu.au/16687/1/Jonathan_Derek_Silver_Thesis.pdf

      • Dave Rand says:

        Thanks, I’ve read that one and debated some of it’s points on air with the former BC film comissioner.

        Although finance and talent are recruited from abroad all six of the world’s top producing studios have their film divisions incorported in California.

        Subsidies have everything to do with maintaining the oligopoly. As Pete Mitchele put it…. The American’s got smart and made it impossible for anyone to compete with them…so essentially Canada has to pay to play in the big leagues.

        Not sure why anyone would counter that rather than give the Americans over $600 million an investment in local sustainable growth would be wise.

        In that light how can you argue that subsidies do not in effect act as fences to keep the new comers out of the big leagues.

        The former BC film commisioner seems to think so. Is he wrong?

      • Dave Rand says:

        …also, my line about history was aimed at self defeating logic that I hear constantly used on these and other pages.

        The “They are just too big!” arguement is invalid. History is loaded with David and Goliath stories.

        I was refering to those.

        It all starts with an idea, or “wishfull thinking”.

      • scott squires says:

        Maybe if some of these locations used their subsidy money to fund their own distribution they might be able to do it? $400 million a year could pay for some theaters and distribution. China is open for business. Rolling over and simply giving money to the US studios is not helping them and the distribution nugget is getting rather old. Woe is us. Oh by the way, there’s a few hundred million, on us! Worldwide television, theaters and the internet are not all locked up by US studios.

    • Rickmeister says:

      Ah, good to see you responding on this story Dave! Small world.

      My vision is similar to Dave’s. Subsidies are poison and create an unsustainable film industry in countries like NZ.

      Wouldn’t it be great if we weren’t relying so much on the big studio’s, and instead were able to break free and let smaller (local) studio’s release movies on a global scale and take some of the global box office home and in that way reinvest that money in their own local markets by creating more product and so on, and so on? To bad it aint so.

      But as much as I hate the concept of subsidies, me being in NZ myself and being currently in the middle of a studio shutdown because NZ has become to expensive, I am almost like ‘please increase the subsidies so that I can stay and keep working in this country’. I will be out on the street before the end of the year, WETA is the only place left that has a stable flow of work and all the artists want a piece of that.

      • Andreas jablonka says:

        I’m sorry to hear your studio is in trouble. This is a good example, weta and rickmeisters studio get the same tax incentive for outside productions. Maybe ricks studio is doing local nz work and won’t get subsidized. It’s sad that a local shop has to suffer while weta can get more work because their projects are paid for by us studios who inturn do get nz subsidy money.

  5. Here’s to the Big Bang!

  6. jona says:

    hopeless. completely and utterly hopeless. I don’t know if it an overinflated sense of self importance or what but this entire movement will never, ever go anywhere. The work is gone. It will never return and you will have to figure out how to deal with it.

    • hector says:

      you will have to figure out as well in the future, Jona,
      Just wait and see.

    • Dave Rand says:

      Looks like NZ will have to figure it out too as the race to the bottom continues.

      http://www.theguardian.com/film/2013/oct/25/new-zealand-film-industry-avatar-risk

      It’s always most enlightening when it happens to you personally and you realize that the subsidies built nothing. Your were renting a home instead of buying one, and the landlord just kicked you out.

      Productive arguments are always the most welcome ones.

    • LAskyline says:

      This is nonsense and everyone here knows it. Subsidies built nothing? The likelihood of anyone other than Weta doing the hero work on this show is zero – they’re the only ones with the scale, and more importantly the pipeline, to do the majority of the work. Staff may be portable, but the 50,000+ proc renderfarm and the proprietary tools stay in NZ. That’s what subsidies built. The idea of anyone else being able to gear up in time without massive additional expenditure is laughable.

      • Dave Rand says:

        You’d think that to be true, but sadly, to the studios, a VFX company is like a sand painting and can be easily brushed off the table. There’s plenty of history Just ask Rhythm and Hues or the long list of closed shops, mostly due to inability to compete with subsidies and survive in the defunct bidding model business environment.

        They to had considerable proprietary technologies, legacy, strong talent pools that took a long time to accumulate.

        Now they are gone baby…gone….

      • LAskyline says:

        The sad truth of R&H is that despite world class artists and amazing technology they were not well run as a business. The NZ hoo-hah is entirely down to NZ politicians scare mongering to increase gov assistance to failing NZ production services in their constituencies. Weta won’t lose their VFX business, much as I would like LA to get a big chunk of that it just won’t happen. Look at it this way – how much actual Avatar production took place in NZ the first time? Next to nothing – the majority of Avatar’s “production” (the business of filming, or mocapping the actors) took place at Giant in LA. NZ’s VFX incentive still makes Weta very competitive. What’s the chance of BC or Montreal taking the lions’ share of Avatar VFX? Pretty much zero. It would require an investment of tens of millions of dollars to get any of the Canadian outfits up to the scale and sophistication of Weta within the time frame required by the releasing schedule – that’s millions of dollars that Fox already spent on the first one that they won’t be wanting to spend again.

      • polyphemus says:

        A renderfarm isn’t going to keep work in NZ. I’m sure that ILM, Dneg, Framestore and Imageworks are completely incapible of working on Avatar so you are safe on that assumption.

      • Dave Rand says:

        R&H……Not run well as a business??

        First of all, I was actually there.

        Secondly, when you look at the long list of failed Los Angeles VFX shops and see that R&H survived past all of them….does that mean the rest were run even worse?

        NO, it means R&H survived where the rest failed in the current landscape…..and the whole time treated artists well.

        It’s easier to succeed when your government has been paying 15% (NZ) 25% (GB) or up to %60 (BC). But to compare those companies to R&H and then assume must have been poorly run? Ridiculous.

      • LAskyline says:

        Imageworks might have been able to do the work at one time and MPC are reluctant to scale up to the size required for the show. Dneg turned away a chunk of the original and Framestore almost died on the bit that they got. DD’s potential instability rules them out of any serious consideration for a major award. ILM are the only serious contender but can’t compete on price.

      • Andreas jablonka says:

        On price because they don’t have a 15% tax subsidie. Point exactly.

      • LAskyline says:

        Face up to the facts – R&H gambled with real estate and lost. The financial commitments outstripped their ability to win new business. That’s a bad decision in any situation. If the business had been robust they wouldn’t have been sold for a fraction of the worth of a company that size – compare their $30million dollar sale to the Mill’s $120million+ sale last year. It’s great that they treated everyone so well – it would be wonderful if everyone else in the business was so generous. But that has no bearing on the fact that they lurched from one crisis to another, lowballing jobs to keep the cash rolling through and hoping that they could keep going until they could find someone to refinance the operation. They ran into a brick wall in exactly the same way as DD. The days of fat margins in this business are long gone.

      • Dave Rand says:

        As I said, I was there, attended the financial meetings open to all employees every Friday. My facts don’t come from blogs, or hearsay, or half baked articles.

        Rather than turn this into an armchair debate as to why Rhythm & Hues, one of the last standing privately owned VFX shops in LA failed while it was receiving the Academy award for best visual effects perhaps you could explain the facts, as you see them, concerning the influence subsidies for VFX have had on the California market.

        Or are all the closings and loss of jobs just some sort of freakish coincidence?

      • Look at the big picture says:

        LAskyline:

        You are correct that Weta has the skills, infrastructure, and technology necessary to do a film like Avatar better than anyone else. But if you think that the studios are giving that fact more than just a moderate level of consideration, you have not been paying attention lately. If it comes down to it, the studios will shop that work around, and there will be no shortage of VFX houses who will climb over one another to secure that work, and they’ll probably deliver one way or another.

      • Dave Rand says:

        That’s just what I thought….

        Many of us that were actually there contributed to this fine article. It comes the closest to defining what actually happened at Rhythm.

        http://www.studiodaily.com/2013/03/why-rhythm-hues-and-how-do-we-keep-it-from-happening-again/

        I’d add that in the end the only thing that could have really saved the company….move the whole LA operation to Vancouver before doing Pi.

        If you have no work going forward because your neighboring country offers a 60%, pipelines, talent, awards sadly become meaningless.

        I’ll always remember the final days where John walked around constantly wearing a hoody with a giant maple leaf on the front and back, in block letters CANADA.

        He was making a statement. Those who knew him, knew what he was saying.

        There was an extensive documentary filmed during the final months. Sadly, looks like we’ll never see it because it exposes the truth, it’s been squashed….for now anyway.

        So you can get your Rhythm story for a blog or anonymous poster or you can believe the folks who were actually there.

      • thad beier says:

        While it is true that Weta has a tremendous renderfarm and an exceptional set of tools for doing Avatar 2 and 3 — that renderfarm and those tools were relatively recently built and written. Other companies could do the same, especially if they had big subsidies.

        I note that on the spreadsheet in the previous article, one of the more successful companies remaining in LA is my own Hammerhead Productions (still an owner, although I’ve been fired…sigh) One of the founding principles of the company was never to treat anything we built as an asset — if there was any value left after the end of production that was pure gravy — but treating VFX purchases as long-term investments is a sure way to bankruptcy, IMHO.

      • LAskyline says:

        @Dave Rand. OK, at what point in the regular weekly meetings did it become clear to everyone that Pi was earning significantly less than R&H was spending to do the work? At what stage during the bidding process were you aware that the revenue stream from booked work wasn’t going to cover the company’s liabilities? Lionsgate certainly knew well in advance that something was wrong when they decided to pull their Hunger Games work out of R&H. Or would that just be a “freakish coincidence”?

  7. vfxmafia says:

    I have got to say all the debates has really educated me this last year on this website. I’ve had to realize the industry is now global. There is a lot of great talent (whether raw or seasoned veteran) around the globe. VFX is now overloaded and wages are dipping. And lastly the VFX business is gone from Los Angeles.

    Mostly I have been trying to understand the hostility of international VFX workers and the criticism of subsidies. With a little research I found how extensive subsidies are in world economics. Subsidies can be hugely damaging or beneficial because they create distortions. I am just now beginning to understand both sides of this knife. (Me being on the cutting side of Los Angeles)

    What I didn’t know is how much the US engages in subsidies themselves. (also it is very hard to find out solid numbers because ALL governments don’t really want you to know where the money is being spent)

    In 2010 The top 4 industries that the US subsidizes are 1) Financial (Banks) 2) gas and electric 3) Phone companies 4) Oil and nat gas. VFX was not on the list. Perhaps it’s no surprise that the richest industries get the biggest US subsidies, starting with Banks and Big Energy.

    In a study of 2006…..About $59 billion is spent on traditional US social welfare programs. $92 billion is spent on US corporate subsidies. So, the US government spent close to 50% more on corporate welfare than it did on helping people.

    The US spent $80 billion in 2012 on 1,874 programs (source NY Times). The VFX industry was not on the list.

    Canada’s big sin is they spent $26 billion out of their $665 billion annual budget on big Oil. But least they spent SOME money on VFX workers.

    Do subsidies cause market distortions?…YES!

    I couldn’t find the stats on countries that spend the most on subsidies but I bet the US is at the top of the list. It is really hard to throw stones living in a US glass house.

    My real problem is that Los Angeles was left to rot by its own government. The US gov. neither protected US VFX by Tariffs…..nor did it spend subsidy money to offset market distortions.

    Maybe my real enemy is the US government that doesn’t look after its own citizens interests…and not Canada or New Zealand thats has government programs that help its own people.

    I really understand why New Zealand wants to keep film in their country. Because the next leading industry is slaughtering lambs for a living…….

    • Dave Rand says:

      Tariffs are installed when an industry presents it’s case. That is what we are doing. The US is not at the top of the subsidy list in VFX. We are focused on VFX. As our attorneys stated in the feasibility study, the effort itself could bring change even before any legislation is past.

      My guess is you’ll begin to see the studios throw the local California VFX companies a bone or two.

      • vfxmafia says:

        Dave,

        Alot of Tariff protection got thrown out after NAFTA was installed.

        I guess my point was that subsidy’s are a basic economic tool. Subsidies are kind of like “antibiotics”……they cure your short term ills but long term they can be bad and break down a healthy immune system. Subsidies are a fast injection of cash that immediately helps local economies. Long term they are detrimental to an economy due to distortions in the market.

        I understand why UK and Canada embrace their subsidies. It is good for them in the short term. It seems subsidies kind of have been demonized though. I actually booed them at the townhalls……

        Subsidies when used correctly brought us out of the great depression. The WPA….the Hoover Dam….and the National Highway system are due to US subsidies. Obama backed off a spending package after the GM bailout. In fact if US subsidies where increased 4 years ago…..we would be out of this recession right now. Instead we implemented budget cuts and austerity.

        As far as the studios “throwing a bone” to a couple california companies….I’ll believe that when i see it.

        Any news on the CVD case?

      • Dave Rand says:

        Actually not quite a Bingo.

        My information comes from the trade law firm we hired (vfx artists pooled 16k, and quickly) They did a feasibility study. You can read the details about that here:

        http://vfxsoldier.wordpress.com/2013/07/11/legal-recommendations-on-vfx-subsidies/

        Hoover Dam and the New Deal have little to do with the current state of VFX subsides and their effect on our business. Devastating it in California and creating imbalances everywhere else.

      • Dave Rand says:

        As for Tariffs being thrown out….try bring anything in a new box up to Canada. A good friend of mine had to pay 350$ for his own personal computer while chasing his job up the Vancouver.

      • Dave Rand says:

        Mailbox services in Bellingham Washington supply you with a table, and exacto knife, and a trash bin so you can remove all new packaging and effectively smuggle you own new items purchased (presumably) for yourself across the border.

    • minoton says:

      The four areas you mentioned that the US subsidized were subsidies given to US companies/industries, not subsidies given to companies to send work here, or am I mistaken?

  8. Chris says:

    Chasing the almighty dollar… will eventually collapse the whole industry. It’s happened with clothing, it’s happened with electronics, it’s happened with manufacturing.

    Even if NZ give the subsidies, the next time someone will want more, and someone else will give it. Until there is no more to give. It’s rather similar to “free trade zones” that have been left to rot all over the world – after the tax breaks run out.

    But back to VFX, It’s no surprise that Cameron has already been to China, because he wants a slice of those ticket sales, and to get it, it “has” to be a co-production. So, ironically, in some ways China actually maybe setting the standard for protecting your own industry.

    While Jackson side steps the issue, know that even if he’s saying ‘in public’ – local films is where I’m heading. But be sure that if it comes to NZ he is the one that will profit. And all that it implies. It’s a smart strategy as no-one blames you what ever the outcome. If it doesn’t come – your rallying the troops and supporting local industry. If in backroom deals, it does end up in NZ, you win lots of money.

    I know people are upset with Los Angles and the US gov. by saying “neither protected US VFX by Tariffs, nor did it spend subsidy money to offset market distortions.”

    Maybe they realized the only way to win this game – is not to play.
    Maybe China realized it too, and changed the rules of the game – so not lose their local industry.

    Everyone else is seemingly fighting each other for smaller and smaller crumbs in a war they can’t ever win – a war of attrition.

    And just like a real war, it’s the vfx soldiers out there that suffer the daily artillery pounding.

  9. Studio_Spotter says:

    Both sides look like fools arguing so adamantly over who is more aware of, or more apt to grease American studios better than the other. I suppose theyre just representing their constituents so perhaps its just a sad reflection of the perceived majority opinion in NZ.

  10. J Butcher says:

    There is a HUGE difference between a subsidy, and an incentive. A subsidy comes from WITHIN the existing NZ govt tax pool, an incentive is paid back at the end of production. If a production from OFFSHORE spends $100 million here, and at the current rate gets a rebate of $15 Million when it ends, the NZ economy has still gained $85 million dollars from offshore! In 2008, the NZ Screen industry earned 2.5 BILLION dollars for NZ, second only to Dairy and tourism. After the rebates were paid out, that still added 2.15 Billion dollars to our economy from offshore, that we otherwise would not have had with out the Large Budget Screen Fund Incentive. Do your homework, and get your definitions and maths right!

  11. Dave Rand says:

    In all fairness I would like to read more about the claim that In 2008, the NZ Screen industry earned 2.5 BILLION dollars for NZ due to incentives.

    • Dave Rand says:

      …perhaps you could supply some links that show this effect from incentives.

      • Dave Rand says:

        …and then contrast this with the problems they are experiencing today, and ask yourself …why is there going to be an implosion unless they top every other country’s incentive, refundable tax credit, transferable tax credit …or other term that basically describes a government handout? …. instead of real competition based on talent and branding building a sustainable future instead of a race to the bottom where each nation build Hollywood but not their own Wood.

  12. minoton says:

    I’m wondering why NZ (and other localities that offer film subsidy programs) don’t offer lucrative subsidies to the big oil companies such as Chevron, Shell, Exxon-Mobil to ship their oil there for refining and then turn around and sell the gasoline in the US (or wherever)? I’m sure refining oil would have an economic benefit to any location. My guess is it would be ludicrous to pay government/taxpayer money to a huge US owned corporation that’s already rolling in money to purchase work for it’s citizens. It would be better to just spend the money locally and develop their own energy industry. How is giving taxpayer dollars to rich American based corporate studios any different?

    • LAskyline says:

      They already do – the petrochemical industry around the world already gets massive gov assistance, look at what Chevron, Shell, Exxon, Total etc get away with in Africa in countries like Nigeria – just to keep the oil flowing to the US.

      • minoton says:

        But what I want to find out is, is that work that could have been done in the US that these other nations are ‘purchasing’ with their subsidy money? I use refining as an example. Are they buying the refining work as opposed to having it refined in Texas and Louisiana? And the counter to that would be, are there any industries where the US government pays a subsidy to a foreign based company (NZ, UK, Canada) to relocate the work to the US? If so, how does that make the citizens of those countries feel? Is the US entitled to do so?

      • LAskyline says:

        BP (British), Total (French) and Shell (Anglo-Dutch) would be good examples of non-American companies working in the US because of tax incentives and other direct industry assistance. Both companies refine oil pumped from US territory, but they also bring in vast quantities of crude from the rest of the world which is then refined in the US.

      • VFX Soldier says:

        I’m always surprised at how silly oil subsidies get brought up as a red herring during VFX subsidy debates.

        I’ve always said if you got a problem with farm or oil subsidies, I’m sure all of us would support your effort to end them.

        >

      • minoton says:

        The point I was hoping to make, probably not so coherently, was that in regards to other industries (using oil as my example) these countries will spend government/taxpayer money locally to develop their own industry, but seem to be unwilling to do that where motion pictures and VFX are concerned, and would rather send that taxpayer money out of the country to bring in movie work. Why are these countries so fixated on motion picture and VFX work? Why not try to lure oil refining, for example?

        I was also trying to find out if there is any industry where the US sends our taxpayer dollars to a foreign company to have it’s production (of whatever product) handled in the US the way subsidized locations are sending tax money to the US studios to send production/VFX work there?

      • LAskyline says:

        How can oil and farm subsidies be “silly” and VFX subsidies not? You want the studios to pay more for their VFX – we all do – so why not level the whole playing field? Or does the thought of paying double for your soda frighten you too much?

      • VFX Soldier says:

        It’s silly because it has nothing to do with VFX.

        VFX subsidies affect the VFX industry. Oil subsidies are an argument used as a red herring by people who want VFX subsidies to continue.

        >

      • scott squires says:

        Here’s an idea. Lets solve every other problem in the world before we attempt to solve the vfx industry problems. That seems to be the idea behind people who insist that there are other industries with subsidies so that means only 2 things to them:

        1. All of those other subsidies need to be fixed as well at the same time before we should even consider trying to fix our own industry.

        or:

        2. Hey, it’s already going on elsewhere in other industries so we should just accept it. So does that mean we should let people starve here simply because there might be people starving elsewhere? Does that mean fracking should be allowed anywhere and everywhere since there is already some tracking? There are corporations doing illegal or borderline illegal things so we should just get over it and joint them by doing illegal things?

        Rather than trying to justify the existence of film subsidies maybe it would be good for people to actually understand their real impact and for us to focus our attention on this specific subsidy problem. Those looking to solve all the world problems first or try to justify them with lame excuses please remain seated while those of us actually interested in this can try to solve it. For those actually forward looking and willing to consider their impact please join us on the steps necessary to rebalance this industry.

        Thanks.

      • VFX Sup says:

        Well Scott, I think we’re seeing a debate in our community about what is realistic and reasonable to achieve. Which of the following do you think an organized VFX group can potentially achieve?

        1) End sweatshop labor and exploitive labor practices in 3rd world countries around the globe
        2) Impose a CVD or tax system on every nation in the world where movies can be made so that all of that work returns to LA
        3) Have the GTO or other body declare that subsidies are illegal and no country is allowed to subsidize film

        A lot of us in the industry feel that given those alternatives, or ones similar that have been proferred by yourself or others leading this charge, that you’re tilting at windmills. If you don’t solve ALL of those things then you can’t solve the problem in the way you’re approaching it. End subsidies in Vancouver and the work goes to Montreal, or China, or India.

        I’m not in any way doubting your intentions, or that your motives are good and honorable. You’re a very intelligent dude, and you and others have put a lot of your heart and soul into this effort. But so much of what comes out of sites like this are pie-in-the-sky declarations about “illegal” subsidies, the GTO, and lawsuits. I don’t want to hear that anymore. It’s not getting us anywhere.

        And yes, I totally get that if we don’t do SOMETHING then we’re not helping the problem. I merely ask what that something is. Ending subsidies around the world is not going to happen. What I would rather see the VFX community focus on are pragmatic solutions that recognize the following:

        1) That VFX is now a global business. It’s not coming back to LA, and this shouldn’t be ABOUT bringing work back to LA. That ship has sailed and technology dictates it’s never coming back. LA will have to compete on a global basis, period. Stop the LA-centric stuff.

        2) Change can only come when vfx vendors, and Studios decide that they NEED to change. It’s not going to come about as a result of artists complaining that their company has relocated to Vancouver or that it’s not fair for NZ to subsidize films.

        I for one, would like to see innovation, and the American spirit of competing and kicking the ass of work coming out of other places at a competitive price become the driving mantra. Walmart their ass. Flood the market with cheap, competitive products. Or compete on quality and innovation, ala Weta. Ironically a NZ company is the most successfull vfx shop of the last 15 years, and the true artistic heir to the legacy ILM started long ago. Outsource what we can to other countries. Try co-funding like DD is with Enders Game. Use Kickstarter to fund artist-driven VFX films. Look at other businesses and models to compete in this new environment. Look at what Netflix/HBO are doing with original content. I could go on and on. We need to innovate, NOT sue people and try to tax our way back into this business.

        I guess what I’m saying is that I’m SO over the “end subsidies” discussion. Where has that gotten this community in the last year?? How much work has come back to LA? I’m not saying I have all the answers. But I know what I can get behind are positive, competitive attempts to try new things for this business. If LA aritsts just want to hold town halls and cry about how it’s not fair that their shop opened a Vancouver or Montreal branch have at it. If they want to doom-and-gloom everyone with discussions about how subsidies are a race to the bottom, fine. In the meantime, I’m working on films and there is a world of opportunity out there.

      • VFX Soldier says:

        The CVD issue is the shortest path that yields the largest results:

        All that is needed is domestic industry support and proof of injury. The investigation would take about a year and a half. This would only be a duty charged in the US on US producers.

        This would immediately discipline a system that forces the market to choose a facility based on a subsidized price instead of real price.

      • scott squires says:

        Thanks for the note and the ideas. At least you’re taking an active involvement and trying to do something.

        To clarify a few things. vfxsoldier investigated with law firms what was the most likely thing to happen. The CVDs have the most promise of anything. vfxsoldier is getting the ball rolling and then it will be in the fate of vfx workers to support it. If it is supported both by members and by funds, then there’s a reasonable chance it may happen.

        It doesn’t stop subsidies everywhere. It would be imposing a tariff on subsidized shots done from other countries and being imported. It’s not something the politicians or studios can start manipulating. As I say, it comes down to the vfx community.

        The idea of the CVD isn’t to bring all work back to LA. The intention is to remove these manipulations.

        For some reason people continue to think LA is the only place impacted by subsidies. As long as their are subsidies being pushed by studios and granted by politicians, any vfx is subject to shifting and changing regardless of the skills or technology.

        And no, China and india is not prepared presently to do every major tentpole movie next year.

        > Or compete on quality and innovation, ala Weta.
        I agree Weta does great work. So why do they need subsidies to continue to do that? NZ seems to have so much fear that all work will immediately leave without subsidies they’re willing to do anything. So how is quality and innovation with no subsidies supposed to help any non-subsidized place? By relying on and pushing for more subsidies vfx workers/companies are simple reinforcing the idea that it’s all about the money, not the quality. And not innovation unless you figure out a way to reduce costs by over 50%.

        >Try co-funding like DD is with Enders Game.
        Co-funding is only possible if you have serious funds to act as an investor and can stand to lose all of that money if the project fails. Studios make lots of movies. Most do not make money. They make money like most investments by covering a range of different things and hopefully have some do very well. A vfx would have to likewise invest in many projects to make sure they don’t lose everything. Look at John Carter. If you had invested in that or similar money losing film, you might not recover unless you had very deep pockets. Film investment is a different business altogether than vfx service.

        >Use Kickstarter to fund artist-driven VFX films.
        So will those projects be done locally or will there simply be more pressure to be done much cheaper (i.e .subsidies) Is it a lack of vfx films that causing problems or the lack of local productions willing to use local vfx work? Are all vfx workers ready to work for 1/2 of what they did?

        One other notion that people supplest is a action site for their talents with the auctions going down, not up, and each person simply working from their home in isolation. In some cases for a fixed bid individually.

        >Look at what Netflix/HBO are doing with original content.
        Can you find a direct link to how individual vfx workers can apply that model? Can all texture painters, rotoscopers, etc all write and direct their own films? And make money? Most films even with funding don’t make money. There are tens of thousands of films made every year, most never see the light of day. Is that a more promising career for most in the vfx industry?

        Many of us in vfx are in fact shifting to other areas of film production but that’s not a solution for the vfx industry.

        And again, subsidies are the bucking bronco everyone in vfx is riding whether they know it or not. NZ, Vancouver, Montreal, London will all be experiencing what’s happening and it will continue to happen as long as we let it happen. Will vfx ever be a long term viable career for anyone now?

        Is there an actual solution that will truly fix the ills of the vfx industry or a other/new industry where all of those vfx workers can apply their skills, knowledge and experience?

        I’ll happily back anything that can do that. Right now I see most of the suggestions as even less likely as CVDs or affecting only a tiny percentage of people.

        One of the suggestions I had made was to create a Code of Conduct. Let’s make sure all vfx workers are paid and treated properly. This would be something worthwhile to all vfx workers everywhere. Not a big time or money investment. And yet it’s been crickets. Not one person has taken the ball and run with it. They’re fine with me taking the ball and running with it but heaven forbid putting some thoughts on paper or volunteering for something.

        My time is not infinite. Because of the subsidies the opportunities are not there anymore. The vfx industry is creating the most money for Hollywood but we seem to be unable to come up with a real solution and even when steps or potential solutions are offered, vfx workers don’t seem to care. They, like most corporations, are only seeing the next few months out.

      • LAskyline says:

        @vfxsoldier “It’s silly because it has nothing to do with VFX. ”

        The price of energy has nothing to do with VFX? At this point it becomes obvious that you have never had anything to do with the finances of a VFX operation.

        It has *everything* to do with VFX

      • minoton says:

        I almost regret bringing up the oil comparison, as I believe folks have misinterpreted my intentions. It was not meant to be a red herring or any type of distraction from the issue of VFX subsidies as Scott Squires suggested. Reread my post, or any post I’ve made concerning subsidies and you’ll see I’m vehemently against them. Here is what I was hoping to compare/contrast at the expense of pissing off my Canadian friends:

        http://www.empr.gov.bc.ca/OG/oilandgas/infrastructure/Pages/default.aspx

        So, BC is willing to spend subsidy money locally to build up infrastructure for their oil producing companies, but yet DO NOT do the same type of ‘investment’ to set up an infrastructure for their own film industry. How many other subsidized film locations (UK, NZ, et. al.) do this? Why not invest in their own ” ‘woods” as Dave Rand puts it rather than pay subsidy money they could spend locally and give it to American studios instead? Obviously they’re willing to spend locally where other industries are concerned. No red herrings, no diversions, just using this as an example of how these subsidizing governments are being hypocrites where film subsidies are concerned.

  13. tricky2 says:

    nailed it.

  14. urizen says:

    VFX Sup says

    “Walmart their ass.”
    ——————————————–

    Uh, no.

    No, VFX Sup.

    No need to make the world any poorer and uglier and crappier than it already is. We don’t need any more Waltons or Walmarts of any kind to add to our troubles than we already have on hand, thanks.

    And if VFX is a global business, which it certainly is, then great. Let companies compete globally against each other, but without backdoor bribes skimmed out of duped local taxpayer’s hard earned wages.

  15. hector says:

    they compete using taxpayers money. Nice world you build.

    • meinvan says:

      that world is already build, vfx sup sums it up, whether you like it or not.

      studios have no choice but to minimize their spending and maximize their profits. thats the world we live in.

      @soldier, “VFX subsidies affect the VFX industry. Oil subsidies are an argument used as a red herring by people who want VFX subsidies to continue.”

      yes vfx subsidies affect the vfx industry, some might say to the better as its the only way that studios will keep doing fx heavy movie, which in return is job security for all of us.?

      but to add to that, Oil subsidies affect everyone on this planet.

      they are an economic example of how this world is fueled on backdoor deals, and corporatism taking over politics. it also shows that when you deal with the mega corps of this world that we dont make the decisions….and from that point of view, how if your a reasonably smart person; think that anybody cares about you or me, when the bottom line is it all revolves around money.

      everybody on here should be smart enough to figure out that when your working in large scale “hollywood” productions, that your a pawn of those mega corps (even if you were working for R&H which as dave correctly stated one of the only self owned vfx shops with a social consciousness for their employees, and open books…..) you are at the mercy of a much bigger system. the solution….dont work for “hollywood” if you dont wnat to be depended on their next “spiel”, who knows what that might be.

      • hector says:

        i agree with this solution – do not work for them. Stop feeding this animal, named VFX-there’s some other option to get some money, we should stop creating tons of DVD/Blue ray garbage.

  16. […] U.S. domestic trade statutes, industrialized countries like Canada, Britain, Australia, Germany and New Zealand have started offering massive taxpayer-financed handouts to studios if the studios source their […]

  17. […] U.S. domestic trade statutes, industrialized countries like Canada, Britain, Australia, Germany and New Zealand have started offering massive taxpayer-financed handouts to studios if the studios source […]

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