"Free to read: Despite demand, the business of creating visual effects is getting less profitable. http://t.co/rpE8jdV79X "
This article pertains to the movie industry. However, I with dSLRs now capable of shooting video, I suspect some people are broadening their skills to work on both still and video imaging. So if the topic interests you, have a read.
and so are the ones in London, like Double Negative
I guess that's the price US companies have to pay for the overly paid union workers and the new options producers have due to market globalization... they are just not competitive enough.
Photon Mayhem wrote: I guess that's the price US companies have to pay for the overly paid union workers and the new options producers have due to market globalization... they are just not competitive enough.
The "new options" are mainly that the countries you mention subsidize the work.
"Effects companies based in London; Vancouver, Canada; or Mumbai can take advantage of tax credits and cheap labor to underbid California-based firms. At least half a dozen California companies have shut their doors in recent years, pushing hundreds of visual effects artists out of jobs that pay $75,000 to $150,000 a year."
if you think that the tax-credit is the main driver for those choices you are just putting a spin on the situation.
the USD is extremely overvalued, and you will get the same work done abroad for a fraction of the cost (never mind the tax-savings).
The problem, IMO, is that the effects are mated to bad or non-existent writing... as if the effects alone can make up for a lack of a good script, but they can't.... then the show flops, and the money isn't there.
The first rule of thumb should be: tell a good story
and the second should be: if your story is weak, don't waste time/money on CGI effects.
Surely there must be some financial ratio for production costs that they can use to predict a reasonable return for their efforts?
I listened to a replay of an old interview with Schwarzenegger the other day (old Howard Stern), and he was talking about making the show Kindergarten Cop, saying they all agreed to keep costs down by not contracting the final payouts before the movie came out. In a show like that, with virtually no special effects, you could easily do good business even with average sales.... but with a show that relies heavily on special effects, either your costs of production are through the roof, or.... in the case of a mediocre movie, the sales generated don't equal the costs of production, and people end up bankrupt.
The Space Cowboy wrote: Did they? That's not what I'm reading from the article.
Tell you what. Howsabout I call Sari and ask her if she's in a union? I worked with her for several years.
Since the article is about a year old, I was just asking a question.
Ask Sari and let us know.
But you can't expect to pay 150k$ a year per artist and compete with companies that pay a fraction of that (again, not talking about tax-savings).
It looks like there are market corrections, as I see a lead vfx positions in Ca right now is about 60K. However still far from the 10K salary in India. (keep in mind this is not exploitation, as the cost of living is much different)
I'm curious... ask Sari what's the average salary in US for vfx artist.
still it didn't explain the high wages which I quoted above.
I guess someone who got hired at 150k should accept pretty large cut, which I doubt will happen.
After all those people are not on contracts per project.
still it didn't explain the high wages which I quoted above.
I guess someone who got hired at 150k should accept pretty large cut, which I doubt will happen.
After all those people are not on contracts per project.
It also doesn't explain how Vancouver competes with Mumbai, unless Canadians are making 10K a year as well.
The Space Cowboy wrote: It also doesn't explain how Vancouver competes with Mumbai, unless Canadians are making 10K a year as well.
I heard that producing in Canada is much more... pleasant. The grips, gaffers, loaders, etc are much nicer to work with... but nothing specific to the VFX.
for VFX, 2-3 years ago "an entry level workers frequently are held to $1,100 a week", so let's say it's about the same.
no sane company will move their offices to another country (which some US companies did) for a tax incentive which may change in a year.
I think the tax-incentive in Canada is 25%, however in California is 20-25%... so let's call it the same, so this can't be the reason.
To apply for the California Film and Television Incentive Program, a "qualified motion picture" must be one of the following:
(Eligible for 20% Tax Credit):
Feature Films ($1 million minimum - $75 million maximum production budget)
Movies of the Week or Miniseries ($500,000 minimum production budget)
New television series licensed for original distribution on basic cable ($1 million minimum budget; one-half hour shows and other exclusions apply)
(Eligible for 25% Tax Credit):
A television series, without regard to episode length, that filmed all of its prior seasons outside of California.
An "independent film" ($1 million total production budget - $10 million qualified expenditure budget that is produced by a company that is not publicly traded and that publicly traded companies do not own more that 25% of the producing company.)
Photon Mayhem wrote: I think the tax-incentive in Canada is 25%, however in California is 20-25%... so let's call it the same, so this can't be the reason.
Are you in the Visual Effects Society?
Did you get the letter today from Jeff Okun?
"There are many issues on the table and none of them are simple. Take incentives offered by various states and countries – they distort the marketplace, but obviously they are good for some people because they keep being created and renewed and used. If California expanded its incentives, a great many people might not be as angry and frustrated – they might be employed and achieve greater job security.
So, should the VES lead a call to action on this? How, as a global Society, can we do this without offending some members elsewhere? After thinking long and hard on this I believe the best answer might be that maybe we should. It is a thorny issue and will upset members somewhere if we do it and others if we don’t. And the issue of actually getting the state to offer a meaningful and competitive incentive is not an easy thing to accomplish either – So expect to hear more from us very soon on this."
The Space Cowboy wrote: Are you in the Visual Effects Society?
Did you get the letter today from Jeff Okun?
"There are many issues on the table and none of them are simple. Take incentives offered by various states and countries – they distort the marketplace, but obviously they are good for some people because they keep being created and renewed and used. If California expanded its incentives, a great many people might not be as angry and frustrated – they might be employed and achieve greater job security.
So, should the VES lead a call to action on this? How, as a global Society, can we do this without offending some members elsewhere? After thinking long and hard on this I believe the best answer might be that maybe we should. It is a thorny issue and will upset members somewhere if we do it and others if we don’t. And the issue of actually getting the state to offer a meaningful and competitive incentive is not an easy thing to accomplish either – So expect to hear more from us very soon on this."
I'm not sure where they want to expand the incentives. The movie gets the 25% tax-incentive and the producers choose how to spend their resources.
I just checked, in BC for foreign production the tax-incentive is 33% (a bit higher), if you are doing just the VFX it's 18%. (for domestic productions is about 25%)
http://www.bcfilmcommission.com/product … les/53.php
I understand his anger, but... those are just "angry words" towards a changing industry and even BC studios will be more or less in the same boat (as Pi - pun intended), as globalization allows for more efficient productions, and the overvalued USD$ (and probably the CDN$) puts all US productions at a disadvantage.
Do you think something will change if they match the 33% incentive that BC gives? or maybe 50%?... for how long do you think this business model will hold?
They need to change their whole business plan, and to hold water it will have to be in a way that most won't like.
ps. don't know about New Zealand. One of my citizenships is Canadian, although I haven't been back there in a few years. (right now i'm in EU)
I just bought a bunch of wallpaper at $60 a roll from a British company. I notice they sell it domestically for £18 a roll. Why was it impossible for me to get that price?
The Space Cowboy wrote: Again, you keep citing figures as if you know what they are. The figures are unpublished. The publicly published figures are not the ones in effect.
--------
I just bought a bunch of wallpaper at $60 a roll from a British company. I notice they sell it domestically for £18 a roll. Why was it impossible for me to get that price?
public spending is subject to official records in Canada, so yes - those figures are from the official BC site and are correct. (so are the ones given by the California government)
to help you with your math:
18 British pounds = 27 USD$, add US import duties, delivery 25$ .. etc..
I'm not saying you shouldn't protest... I'm just saying it is pointless and the solution should come from change in the business model of the industry (and no additional subsidies will make any difference in a few years)
Photon Mayhem wrote: public spending is subject to official records in Canada, so yes - those figures are from the official BC site and are correct. (so are the ones given by the California government)
Um, yes.
But actually no.
"Hobbit producers to New Zealand: if you tell people how we got our sweet tax/labor deal, no one will want to make movies in your country"
As I said, I can't speak about NZ, however even in the article it's clear that this was a special case.
still it's all on the record:
"The Government secured the three movies by changing employment laws and beefing up the tax rebate sweetener for the productions, resulting in an additional $25 million in incentives for Warner Bros."
http://www.nzherald.co.nz/nz/news/artic … d=10864146
"New Zealand grants approximately 15% in rebates for production and special effects work, which suggests a total budget for each film of around $250 million, using the studio figure."
http://www.the-numbers.com/movies/2012/HOBIT.php
so if before the changes in the Law in NZ it was 15%, compared to the 25% in California, and 30% in BC... so in this case for them was (15% + 25mil).
and did it really matter for the industry as a whole?
I'm not sure what you actually think happens.. they make it for free?
In reality even getting the max tax-credits by law is not easy.
Photon Mayhem wrote: As I said, I can't speak about NZ, however even in the article it's clear that this was a special case.
still it's all on the record:
"The Government secured the three movies by changing employment laws and beefing up the tax rebate sweetener for the productions, resulting in an additional $25 million in incentives for Warner Bros."
http://www.nzherald.co.nz/nz/news/artic … d=10864146
"New Zealand grants approximately 15% in rebates for production and special effects work, which suggests a total budget for each film of around $250 million, using the studio figure."
http://www.the-numbers.com/movies/2012/HOBIT.php
so if before the changes in the Law in NZ it was 15%, compared to the 25% in California, and 30% in BC... so in this case for them was (15% + 25mil).
and did it really matter for the industry as a whole?
I'm not sure what you actually think happens.. they make it for free?
In reality even getting the max tax-credits by law is not easy.
It's a special case, but they changed the laws and it's all on the record.
And studios go to India because the labor is cheap, except when they go to Canada because the extra politeness is worth the price.
Ok. Got it.
------------
Incidentally...
California allocates $100 million yearly … which meets the needs of only about 20% of the work that would stay in California otherwise.
For comparison purposes, New York caps its program at $420 million yearly and both Louisiana and Georgia are uncapped in the amount of incentives they offer)
The Space Cowboy wrote: It's a special case, but they changed the laws and it's all on the record.
And studios go to India because the labor is cheap, except when they go to Canada because the extra politeness is worth the price.
Ok. Got it.
------------
Incidentally...
California allocates $100 million yearly … which meets the needs of only about 20% of the work that would stay in California otherwise.
For comparison purposes, New York caps its program at $420 million yearly and both Louisiana and Georgia are uncapped in the amount of incentives they offer)
sorry... still doesn't add up that other's incentives are to blame for the problem in US when it comes to VFX.
but I see that California needs far more than 100mil. for incentives:
" expenditures of $1.1 billion.
2010-11: $124 million in credits allocated to 52 projects with
estimated aggregate project expenditures of $967 million.
2011-12: $104 million in credits allocated to 29 projects ($66
million of which is "reserved" for 11 pending projects) with
estimated aggregate project expenditures of $740 million.
2012-13: $100 million in credits allocated to 28 projects with
estimated aggregate project expenditures of $683 million
Demand for credits far exceeds supply; available allocations
were oversubscribed for all funding cycles, and the 2010-11,
2011-12, 2012-13 amounts were oversubscribed on the first day
of availability."
but still... the California state has to foot the bill, and who/where would the budget for that come from?
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 2026 (Fuentes) - California Film and Television Tax Credit.
Amended: August 27, 2012 Policy Vote: G&F: not available
Urgency: Yes Mandate: No
Hearing Date: August 29, 2012
Consultant: Mark McKenzie
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 2026, an urgency measure, would extend the
applicability of the California Film and Television Tax Credit
(film tax credit) for two years, thereby authorizing the
allocation of an additional $100 million annually in tax credits
to qualified productions from July 1, 2015 until July 1, 2017.
....
Well, I guess you are right, and it's all about overpaid American CG artists.
Looks like the only way the US is going to compete with India is to either start paying people $10K a year, or start being polite, like they are in Canada.
Yang said all visual effects companies are facing the same problems worldwide.
He blamed the outsourcing of post-production film work on certain countries providing huge tax credits, saying that post-production companies that do not have studios in those nations could face higher costs.
Canada, for example, provides credits ranging from 16 to 60 percent for Canadian labor and production costs, he noted.
"It is the movie studios that are benefiting (from the policies), not the visual effects companies," he noted.
but nothing specific to the VFX.
| 
| 
| edu