Campaign to End VFX Subsidies Update

The Wrap mentions this blog’s campaign:

VFX Soldier is moving beyond rhetoric and mounting a legal challenge to foreign film credits. It is getting readers in on the action by soliciting donations to fund the effort. Last December, the blog raised $13,000 from more than 180 donors, which it used to hire an international law firm to conduct a feasibility study. VFX Soldier said the goal is to determine the best legal avenues for taking on these major media conglomerates.

“It’s a long shot,” the writer of VFX Soldier told TheWrap. “But my ability to get into this industry was a long shot. No matter how good or efficient you are as a company right now, you’re at the mercy of the next government that comes in and undercuts the process by offering more money. So you’ll keep having jobs go to India, China or whatever the next place will be.”

Not sure if I was misquoted but I believe I said jobs will go to Vancouver, then Montreal or whatever the next subsidized location will be and I am also against subsidies in the states.

The LA Times also had an article that zeroed in on something I’ve argued for quite a while:

In a meeting with employees Monday, Rhythm & Hues executives singled out the difficulty of competing with tax subsidies offered in the UK and Canada, and indicated about 200 people would lose their jobs.

That being said I’m sure many people who recently were shaken by the recent news are reading this blog for the first time and wondering what this campaign is about. Long story short, the subsidies that are causing the industry so much volatility violate many international trade agreements. You can read the details here.

So what’s the latest info? Here is what I can divulge:

The team we are working with has been meeting with individuals in the industry to understand the inner workings of how the subsidies flow through and impact the different stages of the production process. They will soon be meeting with relevant officials in the government to consult on how the trade laws on subsidies would be applied to the particular structure of our industry.  Based on these conversations and their own research and experience, they will be drafting a proposal that would outline what we can do.

As more information becomes available, I will submit a post to let everyone know the progress.

Soldier On.

41 Responses to Campaign to End VFX Subsidies Update

  1. John Texture says:

    Dear VFX Soldier,

    Thanks for the clarification and the update! Look forward to hearing more on the campaign.

    PS. For all R&H employees, my thought is with you!

  2. vfxmafia says:

    How’s the lawsuits John? When is SEC gonna put you in jail for securities fraud? I hear Florida wants its 10 million back?

  3. scathie says:

    “In a meeting with employees Monday, Rhythm & Hues executives singled out the difficulty of competing with tax subsidies offered in the UK and Canada, and indicated about 200 people would lose their jobs”

    What nonsense. The United States offers much lower taxes, cost of living and makes mortgages tax deductible, allowing employees to live on a much higher standard of living for comparable wages, and acting as a “subsidy” of it’s own. Canadian jurisdictions are simply offering tax credits to even this drastically lopsided playing field.

    It is true that the US makes it more difficult to immigrate to and obtain work visas in than Canada and the UK, but perhaps that is one area where Canada and the UK can increase barriers to prevent worker mobility.

    • Dave Rand says:

      Looking forward then to when we can subsidize films made in Canada from Canadian financing here in Los Angeles.

      Could you list the VFX films being made in Canada by Canadians right now so we can get started?

      Ok if not then, could you please list the Canadian Industries you’d feel comfortable with being up for grabs with our governmen’s money?

      I think the real question you should be asking is why hasn’t Canada, with all the years (20 now) of building the infrastructure to produce their own blockbuster VFX films, produced even one to call their own?

      Or are you actually just helping the American Studios keep the fences up and keep you out?

      • Dave Rand says:

        As you continue to try on all these arguments for size you’ll soon realize that Canada is not wearing any clothes.

      • andrei gheorghiu says:

        most of the slaves working in Canada are from outside – cheap labor….very few locals working as “artists”
        Most of the producers are Canadiens , though…

      • Scathie says:

        “why hasn’t Canada, with all the years (20 now) of building the infrastructure to produce their own blockbuster VFX films, produced even one to call their own?”

        Because Jack Valenti and the MPAA fought tough-and-nail for over 30 years to stamp out the Canadian domestic film industry?!

        Got any other stupid questions for me?

        And if we can’t have our own industry, while Canada consistently represents approximately 10% of the North American box office take, why shouldn’t we be permitted to participate in their production?

        And lastly, by that retarded logic, no movie owned by Universal (which is owned by a Japanese company) should ever employee a single American.

        “could you please list the Canadian Industries you’d feel comfortable with being up for grabs with our governmen’s money?”

        You mean like the oil industry?

        Any time an American politician shows up in Canada, you can bet their trying to either weaken our environmental laws, buy oil, or convince us to throw more and more money away on “security”. Hey, you’re welcome for the free gas subsidy so that you can drive to work every day at a fraction of the price it would cost you if Canadians simply decided to change markets to sell to (which, funnily enough, we’re doing right now). Hilariously, if we just joined OPEC, or decided to cap the amount of energy we sell you, we could make a few fortunes more.

      • Dank says:

        I thought Universal was owned by Comcast.. Is that a Japanese company? Before Comcast it was owned by GE which is one of the oldest US companies. Just checking that’s news to me.

      • Dave Rand says:

        Got any other stupid questions for me?

        Given you’ve now admitting to taking what you’re unwilling to fight for on legitimate grounds…has name calling become your new argument? Calling people Retarded and Stupid are not productive arguments, they are the type of items tossed over the fence when you’ve given up on legitimate and constructive thinking.

      • Dave Rand says:

        World Trade Agreement
        PART III: ACTIONABLE SUBSIDIES
        Article 5 Adverse Effects

        No Member should cause, through the use of any subsidy
        adverse effects to the interests of other Members

        _____________________

        What we are doing is specific to this signed agreement and how it relates to VFX. We are not name calling or brandishing we are simply trying to encourage free trade based on talent and branding by taking down the tools used to keep the barriers to entrance up.

        Many of us believe that in the long run this is a path that will not only open up markets with real growth but actually benefit the existing studios bottom line by nurturing true creative environments by disabling the race to the bottom of their most valuable asset ..Visual Effects.

      • Scathie says:

        “I thought Universal was owned by Comcast.. Is that a Japanese company? ”

        Maybe it is. It might be Colombia that’s owned by Sony, which is Japanese. One of them is, anyway. It doesn’t change argument.

        “Scathie, lower tax rates have NOTHING to do with this.”

        Nothing to do with your argument and everything to do with mine. Yeah, how hard is it to say “we’re going to have an argument on my terms?” How about this? “no.”

        How about the States raises their taxes first to match Canada’s THEN we talk about subsidies. There’s something to be said for a fair fight.

        “From a corporate tax perspective, you are actually contributing to our tax base while draining your own.”

        So? So is all the money we throw away on your War on Terror or War of Drugs? Why don’t you rail against those? Oh wait, because those don’t personally enrichen you? Yeah, you’re such a concerned citizen.

      • VFX Soldier says:

        This is one of those arguments people use in law school as an example of a really bad argument.

      • christian roberts says:

        How many american films are financed by american money?
        Take sony which is financed from Sony Finance the major branch of sony for profit, and that is based in Japan so hardly American money.

        Lionsgate was a BC based film company with most finance coming from its owners work as a venture capitalist. Yes they relocated to Santa Monica for strategic reasons but that does not make it suddenly only loyal to the USA and without that company we would not have lionsgate summit Ent who are the largest independent film maker.

        Fox is apart of a multinational corporation with offices in US and Australia and listed on both stock exchanges and I am sure the money used to finance films is based of of it global profits not just american money.

        The fact is without alot of foriegn investment many “american studios” would no longer exist. Heck mgm has a british film franchise to thank for its survival.

        We could ask when is Hollywood going to make American films with american directors rather than profiting off of international stories and directors rather than focus on the american industry?

        Subsidies aside it really is a global market these days where the studios make most of there profit from the international market so tell the stories we want to see. Life of Pi is a great example that the americans box office would be a loss without the rest of the world.

    • Scathie, lower tax rates have NOTHING to do with this. The US studios haven’t relocated….they just send productions up north. Production companies do not pay or owe taxes (corporate) in Canada. The “tax credits” represent cash payments directly in the pockets of the producers/studios….that free money pays for 20-50% of the entire budget. Canada’s film incentives are literally financing the actual production of US movies. From a corporate tax perspective, you are actually contributing to our tax base while draining your own. Most Americans, however, would prefer to have their jobs back as well.

    • RH_vfx says:

      Poor scathie, almost had your facts straight. So close…

  4. louise says:

    Thank you for your work vfxsolider, a facebook page here about VFX solidarity : https://www.facebook.com/VfxSolidarityIntl

  5. Dank says:

    This really shouldn’t be an artist vs artist issue. Things are probably great in Canada but like VFX soldier(and other) has said a million times the studios are chasing the money. Now the studios I’m talking about are the actual studios Columbia(Sony) Universal, Fox, Paramount, and so on. They are the ones that are telling the VFX shops if they want to work on their next awesome film they HAVE TO set up a Canadian branch, so that the film studios can get the money.

    Really we should all band together because in the end we are the ones getting screwed. LA is continually losing work, London is now losing work, Vancouver will be next when the subsidies move to another place, which it looks like is happening.

  6. Craig says:

    “Because Jack Valenti and the MPAA fought tough-and-nail for over 30 years to stamp out the Canadian domestic film industry?!”

    Not entirely accurate. Canada had decades before Valenti came along to make films and it chose not to. In the late 30s the federal government hired someone to examine Canada’s film output and recommended changes–he released a scathing report and Canada started the NFB–designed to focus on documentary and news. They said Canadians want realism. Now it is true that Hollywood didnt mind dominating Canadian theaters, and made agreements to make films with Canadian content to show in Canada, but even the few low budget indie filmmakers in Canada were focusing on realism not fantasy. Off the top of my head the first Canadian genre films were the Mask-1961, the Vulture 1967 (UK co-production–check out the awful ridiculous monster in it), Flick 1970(read a user review at IMDB and lose your sanity). In BC the first genre film was a porn film–Sexcula–it was also the first gothic themed film made in Canada. 1974. Then the Keeper in 1976. These are not considered genre favorites. Cronenberg’s early efforts were condemned by the government and official media. The films Canada praises are films about disease, drowning children, failure, etc.

    Valenti and Canadian distributors said that Canada could establish a film industry if it made watchable films. So while it is true that Hollywood did work to dominate Canadian theaters, especially in the Reagan years, we helped them in every way we could by not making watchable films. Its a problem with storytelling skill–and our literary output proves this. There’s no budget issue with books but we have no Edgar Allen Poe or Washington Irving. The closest we have is a french writer who transcribed old French ghost stories around 1900.

    More information (having watched a lot of typical Canadian movies his summary of a Canadian film being about suicide and dead moose sex isnt too far off):
    http://www.badmovieplanet.com/unknownmovies/reviews/rev442.html

    List of best Canadian movies made by film industry magazine (not much fantasy on there):
    http://playbackonline.ca/2002/09/02/best-20020902/

    • deanareeno says:

      @Craig: “Its a problem with storytelling skill–and our literary output proves this.”

      Life Of Pi, the film for which R&H will probably win the VFX Academy Award, is based on the internationally best selling Canadian novel by Yann Martel.

      Just sayin’.

  7. vfx_vet says:

    I know this is a side issue and off topic…but to Dave Rand….it’s a well known fact in Canada that it has pretty much been impossible to compete with the US in the entertainment industry when it comes to retaining talent in Canada. I know right now it feels like the pendulum has swung the other way, but the Brain Drain as we call it has continually hurt a variety of industries in Canada because the country can’t or won’t match the pay, or doesn’t offer the same kinds of projects like the ones available south of the border. Because of our proximity to the US, and that it’s the global leader for entertainment..it’s just easier to let the talent go. It’s very frustrating. Countries like England or Australia have a more robust entertainment industry due to their isolation and a policy of nurturing home grown world class talent. When Canadians look at their contribution to the American entertainment industry, like James Cameron with Titanic, or even the vegas strip with Cirque de Soleil/Celine Dion/Shania Twain…many of us think it would be great to have those projects or venues being developed in Canada. It is unfair to characterize Canadians as takers here. Those projects alone have contributed millions to the American economy.

    and BTW…we’d like James Cameron back, but you can keep Celine.

  8. Dave Rand says:

    I appreciate your comment. I had a short debate with the BC film commissioner where he brought up a different facet of this view. His view was that Americans became smart enough to rationalize the industry…meaning they took production to cheaper locations (mostly through subsidies) and created this “imbalance” that left BC no choice but to create subsidies for those very same Americans in order to join the fray. Both his and your view are really just a perpetuation of the lock out Canada will continue to have. At some point you have to break the cycle and many of us believe that eliminating subsidies is a great start….when you look at it as the tool it is, and encourage your politicians to send the money inward rather than out…you may be amazed at what begins to grow. You have more Cameron’s than you think, give them a chance on your side of the fence.

  9. money man says:

    Lets not forget that its the studios themselves who make decisions about who to allocate packages of work to, and its the studios themselves who chase rebates. At the end of the day this industry is driven by return on investment. How effective can you be in changing government policy across the globe with a $13,000 fund. Why don’t you ask Warners, Universal, Fox, and others why they chose to send work outside the US, we already know the answer. You cant blame the companies for setting up in Vancouver, and other location where rebates are available, they did this in response to the economics of the studios. Whats happening in Visual Effects right now is the consolidation required after a massive period of expansion. It was always going to happen and hopefully the industry will be stronger for it. Warner was very open with the fact that if there wasn’t additional assistance provided by the New Zealand government, the hobbit would not have happened there. Its not because Warners loves New Zealand, it about money, it always has been, always will be. Rebates and subsides are here to stay, locations may changes, but there will always be somewhere in the world offering a deal to the studios, and the studios will always look for the best option to increase their return on investment.

    • VFX Soldier says:

      I think we’ll be quite effective. Just wait and see.

      • Blacklight says:

        I gotta agree with money man here. This is a business, and the goal is to maximize the return on investment. The current upheaval in the VFX industry reminds me of a time not too long ago when computers started becoming ubiquitous in the film industry, and many people who relied on the old way of doing things lost their jobs. Suppose a bunch of cel painters had gotten together to demand that studios stop using digital ink and paint and go back to painting on cels. Such a campaign would’ve failed, as there is no incentive for studios to go back to a costlier way of doing things. These same studios can hire all the lawyers they need to find as many loopholes as they can to ensure that their profits remain unaffected.

    • Dave Rand says:

      Imagine working on a film with unrestricted hours, no enforced turn-around and no required meal breaks. Imagine working under a seven-year contract that you cannot break and more than likely will be forced to renew, for a producer who can tell you who you can marry, what your morals must be, even what political opinions to hold.

      In 1933 six actors meet in a modest hollywood home and began a movement that changed toes practices forever. One of their future leaders becoming president of the United States.

      All societal change comes from a thought, a simple conversation, and in the end it becomes apparent that the cost of doing nothing would have been far to great.

      • Dave Rand says:

        You may have noticed that Wellington and Vancouver are starting to have thoughts and conversations all on there own.

      • John Stantton says:

        “Imagine working under a seven-year contract that you cannot break”

        You can break any contract you want to. It is not illegal to break a contract.

      • Dave Rand says:

        http://www.sagaftra.org/node/22 I got that from the SAG website, it’s the first paragraph. The implication is best described on William Gazecki’s documentary “Behind the Mask” which William did for SAG. At the time, if you broke your contract, you were blacklisted and never worked in Hollywood again. I believe it’s understood that slavery at the time was abolished but the actors had not choice but to enter careers where they had no leverage.

      • Dave Rand says:

        Sorry I should have been more clear as to my source and it’s meaning.

      • christian roberts says:

        vancouver yes wellington not so much. the finacial impact on new zealand has been huge. And really a NZ director with his own facility is going to want to make his film at home. Hell its not even an american story so think youreslve lucky for the american studio to have benefited from a british story.

        And the fact is no other facility in the world would have been able to do the fx in the hobbit not even ILM. Weta did every shot in house at 48fps. Even ilm now outsource shots to other facilities as they dont have the render resouces of weta.

  10. Dank says:

    Dave you are right, that’s also how and why United Artist was started. Most people coming into the biz don’t seem to think its important to learn the history of it. What’s happening now is a reoccurring trend, and smaller groups of people have been able to do a lot in the past and it can be done again.

    90 anniversary
    http://en.wikipedia.org/wiki/United_Artists

  11. Ours jobs are being outsourced at an ever increasing rate. Faster than workers can evolve to compete. With Canada the uk and Australia subsidizing vfx for 30% of cost, like most IT workers, I may not have a job in the USA in the next 5 years. And we have no union or voice in government. Little can be done, its the sad reality. But when we look back at history, the silent film stars who lost there careers to sound, the film studios who lost untold billions to television, music video makers who lost there livelihood in the late 80’s, the traditional 2d animators who where pushed out in the 90s, the record companies that died because of piracy in the 90’s, the miniature visual fx and prop guys in the early 2000’s, now the set builders and traditional film makers to green screen virtual sets into the 2010+… we had no sympathy, Nor should we have. It gave rise to new and better things. Its not the strong who survive, its the adaptable. The creative, the forward thinkers, the innovators are the ones who hold the key for tomorrows success. Not the ones who entrench themselves in the old guard. The Hollywood of today is not the same as the Hollywood of the 20s 50s or 90s. Again, Its transforming into something new. Now even traditional distribution is crumbling, traditional theaters can barely survive, and 2 kids in Michigan can make a film that is seen by millions on YouTube with a laptop and cheap hd camera for almost no cost. I’m certainly not going to run around the globe chasing the scraps and subsidies for a decaying model in Vancouver, India or china, I’m determined to innovate and add value to my craft by creating the new future. Lets look to the opportunities of tomorrow, be positive, know that we are living in the greatest age for any artist express themselves. after all isn’t that why we got into this bushiness in the first place?

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