Image by Jesse Toves
An unprecedented display of corporate power over a sovereign nation.
In 2010, WB & Peter Jackson demanded that the NZ government offer more generous subsidies and a change in national labor laws or else the Hobbit would be made elsewhere. Prime Minister John Key eventually agreed and at the time I wrote a warning that the US studios would look to take advantage of them again.
Then in 2011, the US studios showed up again. This time they tried to take advantage of emergency legislation needed to help Christchurch earthquake victims by attaching bills that would grant them the power without due process to disconnect internet access of anyone they suspect of piracy.
Imagine my surprise when this past December James Cameron and Avatar producers demanded another increase in the amount of subsidies they would receive to make the Avatar sequels in New Zealand.
NZ media was overwhelmingly against this decision
You know things are really bad when local Op/Eds in NZ describe the Avatar bail out with words and phrases like “sell out”, “blackmail”, “road to hell”, “race to the bottom”, “rent seeking”, and “big fat spoilt child”.
When is a subsidy not a subsidy? When it’s yours
Latest sell out to Hollywood further delays self reliance
Is the NZ Film Industry a Big Fat Spoilt Child?
Film deal a race to the bottom
Race to the bottom
Avatar’s arrow has found its mark
Subsidized locations will need permanent government assistance
The long term prospects for subsidized locations is not good when you consider that US studios are not only expecting permanent government assistance, but are also expecting the amount they receive to be increased every few years.
Weta Digital is arguably the best VFX company in the business but the evidence has shown that US studios only base their decision off the subsidy. They will make talent constantly move wherever the next government exists willing to hand out free money while workers shoulder the costs of displacement.
It has only been about the subsidy
In 2010 Peter Jackson submitted a report to the government pointing out that NZ has nothing to offer other than a subsidy for film production or else the studios would go to Canada. In 2010 when Avatar producer Jon Landau was asked why he chose NZ, he singled out the subsidy. In this latest fiasco, Landau again points out that it is all about the subsidy which he pushed to get increased:
It is neither the archipelago’s volcanoes nor its glaciers that are attractive, because the “Avatar” movies will be shot indoors. Sure, Peter Jackson’s award-winning special effects infrastructure is there, but the deciding factor was the money. “We looked at other places,” says Landau. But in the end, “it was this rebate.”
The latest increase in subsidies is still not enough
What’s amazing about all of this? NZ’s latest increase is still not good enough. When you have to compete with countries like Australia and Canada which are willing to offer subsidies of 40-60% you can expect the studios to keep asking for more.
He said he would have liked to see even higher rebates but could live with the 25 per cent on offer, and believed other major productions would agree.
NZ Treasury ignored twice and costs are increasing
This latest fiasco has finally delivered something we rarely see: An independent measurement of the costs of these subsidies by the NZ government. The NZ Treasury shows that the current subsidies are losing $NZ 168M. Their report strongly condemned giving more money to US studios but the Prime Minister ignored. You can read the damning report here. Supporters of subsidies cannot depend on government assistance forever and the argument that they should keep increasing them when current figures show a loss should be a major concern.
While New Zealand has won awards and has spent over a billion luring US studios there, the stakes to continue being a player in their game is increasing and professionals working in the VFX industry are just along for the ride as the ability to settle in a location, have a family, and avoid costly bouts of displacement are a constant threat.