Casualties Of The Subsidy Trade War: Prime Focus London

June 11, 2014

primefocus

Tuesday morning I woke up early to do an interview with the BBC about the VFX industry. I argued that while the UK is benefiting from recent increases in subsidies for the film industry, I warned that Canada was offering much larger subsidies that pay 60% of labor wages.

A few hours later I get contacted by some people in the UK with indications that Prime Focus would shut down their London office after the email above was sent to employees. One would suspect the reason why an Indian VFX firm like Prime Focus would shut down operations in London was to ship more work to India but that was not the case. The email clearly confirms what I told the BBC earlier that morning: The subsidies in Canada are larger and US studios that receive them have demanded more VFX work be sent there.

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Framestore CEO Claims Up To 75% Work Lost Without Subsidies

October 3, 2012

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.

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Digital Domain Sydney, India, Florida, London, and Abu Dhabi?!

July 20, 2011

Last week I posted about the huge news that Digital Domain was partnering with Reliance Mediaworks to manage a facility in India and a small team in Reliance’s office in London.

Now this week there is a report that Digital Domain will be opening a facility in Sydney and it should be no surprise that the reason for this opening is for film subsidies! :

Stoner said Paradise Lost will bring an estimated AUS$88 million ($93 million) in production expenditure and an 1,300 jobs to NSW, including over $21.2 million expenditure and 200 jobs in the visual effects area.

While details of the incentives offered to Paradise Lost weren’t revealed, part of the deal includes for California-based digital effects house Digital Domain to establish a base in Sydney that will continue beyond the production of Paradise Lost.

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European Union Reviews Film Subsidies For US Studios

June 21, 2011

Last March I posted on how the UK film subsidies are scheduled to end next year. It should be no surprise the the EU will be reviewing film subsidy policy with the following question in mind:

does a subsidy race to attract major US productions undermine the effectiveness of aid to support smaller European films?

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UK VFX Subsidies To End Next Year?

March 8, 2011

Call me a cynic but usually when a vfx company starts boasting about how great things are it’s usually preparation for some bad news. I sort of had the same feeling when UK VFX houses boasted in Variety how great things are going:

Thank God, the major studios don’t see the U.K. as a risk any more,” Hunt says. “Over time, they have seen that, given the opportunity, London can always respond in economies of scale, in price and in quality of work.

Perhaps my suspicion is misplaced but then you read Tim Adler suggesting the UK film industry may have peaked and added this tidbit that was a surprise discovery to me:

the European Union wants to clamp down on the local 20% tax break designed to tempt Hollywood to UK shores. It’s all part of the EU’s drive to stamp out competition between European countries in favour of the single market.

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Will #Brexit Lead To A #VFXit?

June 23, 2016

london

Tonight a majority UK voters chose to leave the European Union which as of this writing is leading to a meltdown in financial markets and wild drops in foreign currencies agains the US dollar. There’s been a bit of chatter amongst many in VFX as to the ramifications for those who work in UK VFX facilities which is made up of many migrants from the EU.

In my view, while most experts agree that #Brexit is a great evil, it might be advantageous for the UK VFX industry. The UK along with the rest of the global VFX industry relies heavily on massive subsidies offered to Hollywood studios which send work to locations which offer the most amount of free money. While this blog has a negative view of subsidies, many in the UK look at subsidies for US studios as a necessary “deal with the devil” in order to win work for the UK and make it competitive.

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Vancouver Stories

August 15, 2014

I flew to Siggraph in Vancouver to attend an ADAPT Q&A with Scott Ross. While I didn’t count the exact number of people there about half of the 100-seat room was filled. I gave an overview of the anti-subsidy duty legal effort we were pursuing and then we answered everyone’s questions.

Throughout the trip and at the meeting, I had a chance to meet all kinds of people across the spectrum of visual effects. Given how critical I have been of Vancouver’s VFX subsidies, I was a bit surprised to see how receptive people were to what we were trying to do. I also had a chance to people’s stories which you might be interested in reading about.

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Gravity VFX Supe Claims “Misrepresentation” On Guardian Quotes

February 17, 2014

gravityTweet by Film London

There was considerable discussion caused by my post on a Guardian article where Gravity’s Oscar Nominated VFX Supervisor Tim Webber was asked to comment on our demonstration for an end to VFX subsidies and why the “British VFX Talent is leading the world”:

We learned to do it significantly cheaper, and used our innovation to be leaner and more flexible operations. In the end, our people are younger and hungrier than they are in the US.

Someone representing Tim Webber responded in the comments section with a statement by him where he explains he was “misrepresented”.

I contacted Guardian reporter Andrew Pulver on Twitter to show him Mr. Webber’s statement asking if it was true. Later on, the article was updated with the younger hungrier quote removed and an amendment at the bottom of the article:

This article was amended on 16 February 2014. A quote from Tim Webber was used out of context, and was removed.

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Digital Domain & Vancouver

June 18, 2013

A few years ago before this blog started, the narrative presented by many in the media about the VFX industry was that it was suffering the same fate as companies that were outsourcing all the work to cheap labor locations like India and China.

At the time I didn’t really see that. What I did see was that VFX work was instead going to expensive locations like Vancouver and London. How could that be possible I thought. London for example has the highest office rents in the world. So I decided to start this blog to write about the main reason VFX goes to these locations: Subsidies.

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The Institutionalization of Displacement In VFX

January 29, 2013

From the Montreal Gazette:

Britain’s Framestore Inc., a leading supplier of visual special effects and animation for the movie and TV industries, is setting up operations in Montreal and expects to provide 200 new jobs over the next three years. The project is being backed financially by the Quebec government with a repayable grant.

I wrote about this 3 months ago and pointed out that the reason for this move was because Quebec offers significantly larger subsidies than London. For every $100 in VFX salary paid there, the Quebec government offers $60 to the studio regardless of the amount of taxes owed.

Layoffs at Framestore London?

While things are looking up in Montreal with 200 new jobs, rumors are that 100-150 people at Framestore London may lose their jobs. I’ve been unable to verify the authenticity of this email which may have been sent out to Framestore London employees:

As projects approach their final weeks we have been reviewing the crew requirements for confirmed work in London. Whilst we are bidding on a number of projects we don’t expect work in London to pick up again until the Autumn so we need to reduce the headcount across all the VFX teams.

Following an initial review of crew schedules we would like you to attend a group meeting tomorrow at 10am in the Wells Street Cinema. At this meeting we will tell you more about the process we will follow to reach final decisions on which roles and individuals will be impacted by this and answer any questions you may have. There will be an opportunity for individual meetings over the next week or two but it is very important that you attend this group meeting. Your Producer and Supervisor know that they need to spare you for half an hour.

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