The CEO of UK VFX facility Framestore claims that up to 75% of VFX work would be gone without subsidies:
Sir William Sargent of Framestore went so far as to claim that between 50 to 75 percent fewer films would come to the UK for visual effects work if that tax credit were not there.
The CEO of Animal Logic which recently purchased FuelVFX also admitted how much they need subsidies:
Nalbandian called on the Australian government to raise the level of the 16.5 per cent Location rebate in line with the 30 per cent Post, Digital and Visual effects (PDV) rebate. Qualifying productions are eligible for one, but not both rebates, so a large Hollywood production shooting in Australia and receiving the Location rebate is likely to go offshore for post and VFX where those rebates are more competitive.
The problem with the subsidy race to the bottom is that no matter how talented you are, no matter how efficient you are, VFX facilities and professionals are at the mercy of the next government that offers unlimited amounts of corporate welfare. Rhythm & Hues admitted that it could bid VFX projects with unsubsidized talent in California, yet producers are so fixated on getting a rebate that they are forced to do the work in Vancouver.
The Animal Logic CEO also commented that part of the reason Digital Domain failed was that it wasn’t a talent-driven company. As much as I’d like to disagree with that statement I have to say it’s true: The company lost it’s focus on it’s core and was too busy trying to get subsidies from all over the world.
That being said, you can see why subsidies are so heavily regulated by international trade agreements. As you know the European Commission has proposed capping film subsidies for EU members and they responded positively to my support for ending the subsidies. Could it be that the recent statement by Framestore’s CEO and the British Film Commission is in anticipation of the EC’s decision?
We’ll see but remember as I always say: if you live by the subsidy, you die by the subsidy.