There has been some news in the VFX and game industry concerning subsidies that I would like to comment on. Basically the subsidy war is slowly transforming into an all out trade war.
Canada Plays Hardball With VFX Houses
So after VFX companies like Digital Domain and Imageworks went through all the work to open facilities in Vancouver, they are now upset that the Canadian government is going to take it’s time to thoroughly review foreign visa applications for VFX/Game jobs.
The real reason they should be crying is how badly studios like Disney twisted the arms of VFX facilities to open up shop in Vancouver. Studios were hungry for free government money and wanted to take advantage of the Canadian film subsidies which are arguably the most generous. However, in order for this scheme to work, they need the talent. Fellow Canadian VFX artists may not like to hear this but most of the jobs for Vancouver are posted in California. They need us up there to make it work, but once the project is over, many of us come back home to spend that money in California which is probably why the state is so hesitant to get involved in the subsidy war.
Unlike the feeble VFX facilities, the Canadian government wants to assure that the money they spend to lure that work to Canada results in some return for them. That means taking the time to make the companies check that any open positions can be filled by Canadians. After all, they have offered these subsidies for a long time and yet the big studios threaten to leave every time a better subsidy is offered elsewhere.
Corporate Group Pisses Off UK Gaming Industry With Canadian Passport Stunt
The UK government has been forced to engage in austerity to prevent larger deficits. As I predicted, one of the first casualties were subsidies the UK gaming industry expected. In reaction, a multinational business group at a trade event handed out mock Canadian passports with information on why Canada, which offers 30% subsidies, would be a better option for gaming companies. Britsh game developers aren’t too happy about that.
China Spirals Further Into Protectionism
The Hulett-zer posts on China’s front in the trade war:
China is opposed to importing a large number of foreign cartoons because the move would hinder its domestic animation industry, said a senior official with the country’s top TV and film watchdog.
Is it me or did everybody this week just realize we are in the middle of a huge trade war? Former Intel CEO Andy Grove lays out his strategy for the US to fight. Former Labor Secretary Robert Reich leads readers through the smoke trail and why this is big.
Peter Jackson Maims Weta Digital?
The Treasury report refers to a 2005 LBSPG evaluation, which concluded that ‘very large budget films that come to New Zealand usually did so for quality and creative reasons rather than economic reasons’. This is simply untrue. Without the LBSPG , Universal would have insisted King Kong be moved to Canada in the blink of an eye. There’s nothing this country offers that justifies the budget hit Universal would have taken by basing the film in a country with no production incentives.
Does Mr. Jackson seriously think that after all the Oscars and accolades Weta Digital has received for it’s superb work that it amounts to nothing without a subsidy for the big studios? Wow. Thanks for the hard work Weta, here’s a slap in the face! The report also mentions how big a money loser the New Zealand subsidies are but tries to justify it by essentially saying it makes the citizens proud of the country.
While we were unable to access data for the full 31 years of the Commission’s life, data for the 1993-2006 period shows the Commission recouped just under 20 per cent of its investment in the 58 films it supported in that time – in dollar terms, $12.9 million recouped against $66.2 million invested.
Globalization and VFX
Scott Squires has a post going over his thoughts on Globalization.
Unfortunately the location that has the most to lose (and gain) from subsidies is California. They have done too little, too late. A large revenue stream for California (especially southern California) comes from movies. There are a lot of people employed in this business and they in turn spend their money locally on services and products.
It’s a sad state of affairs when experienced vfx artists, with all of their creative and technical skills, are likened to migrant farm workers moving to where the work is. At least there’s a real reason farm workers move is because of locations of the crops and growing seasons. In the case of the vfx artist a cubicle is a cubicle, no matter where in the world it’s located. The only reason for moving is purely at the whim of the counties incentives and the studios.
My number one reason for being against subsidies is that is causes VFX artists and their families to bounce around places so studios can get some free money. If subsidies didn’t exist, the vfx work would go where the majority of vfx artists want to live. I get accused of being pro-Californian because I live here but the real reason I support the Californian VFX market is that it is the only vfx market that exists without subsidy and therefore has the least artificial price.
Has the Californian VFX job market taken a hit? Yes and I hate to see many artists get smashed by this subsidy war but the most important thing we need is discipline. The UK, Canada, Australia, and New Zealand are all killing each other to get the work. Nobody wins in a trade war but California indirectly benefits from this. The big studios reside in California and intend to make larger profits from foreign subsidies. This leads to larger tax revenue and the legislature knows this. They have studied film subsidies and know it’s a losing battle. In the short run this will be painful but in the long run I’m confident we will look back and remember how stupid this period was.