The Going Stays Rough for California VFX Houses
After hearing that CafeFX had gone on hiatus, I started perusing the visual effects news on the net and came across Canada’s Rainmaker’s first quarter report for this year. Here’s the link: http://www.marketwatch.com/story/rainmaker-reports-results-for-the-three.... Down several paragraphs from the top is this one:
“On February 3, 2010, the provincial government announced increases to the existing production service tax credits and the existing digital and visual effects credit. These changes will apply to productions with principal photography or key animation that begin after February 28, 2010. The changes are an increase in the production services tax credit from 25% to 33% of eligible labour. The digital animation or Visual Effects tax credit will increase from 15% to 17.5% of eligible labour. The qualified BC labour expenditures cap increased to 60% from 48% of production costs. There will also be a new BC Interactive Digital Media tax credit for video game development of 17.5% of qualifying BC labour costs, which will apply to production beginning after September 1, 2010.”
This isn’t any big news but I felt that it was important that we know the specific parameters of the incentives currently in place. A 60% kick-back on labor is pretty significant and darn insurmountable if a company wishes to remain in business here in Los Angeles.
In another article http://www.encoremagazine.com.au/iron-man-vfx-not-eligible-for-pdv-2535 post production folks in Australia are trying to move their 15% kick-back incentive to include productions costing as little as half a million dollars (AU) down from five million dollars (AU). Although this article states that this is not yet a reality indeed it is a reality http://www.awn.com/news/television/australia-slashes-post-digital-and-vi.... Despite this fact there are rumors that some of the larger houses down under are also feeling the pressures of the times.
As medium and large size American visual effects houses stumble and fall the state of California sits by and watches a great and green business fade into the sunset.
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Richard:
Is their anyone out there with a more positive, upbeat outlook? Currently, I am considering returning to school for Visual Effects after working on the production side shooting and editing promos. I have always had the desire to work with special effects, and want to pursue it. I have spoken to many people at VFX houses, and those doing advertising with VFX, and everyone says they need VFX compositors and 3D people. Yes, our world is being outsourced, we are now global, but as I understand it, the more complicated, artistic work is still being done here in CA.
VFX is not dead in CA, it is transforming. Why would more schools be opening here if there is no work, especially when they guarantee connections to the studios doing VFX. Is everyone lying?
No one has answered the question about lobbyists and tax credits, so I guess nothing is being done. Why not rally up, and try to make it happen, instead of just accepting 'fate'. Should we just crawl into a hole and die, because we are mid-career and everything has changed. It is so pessimistic. Richard, you have been in this business for many years, you must have a network, and everyone knows someone in politics. Let's starts a revolution instead of giving up or giving in.
ceg
Bob...The unfortunate truth is that there are a lot of situations currently where adapting is a moot point. It's definitely a global problem. We've just identifying our specific story here but the story is true everywhere. Just about every college, junior college and university has some sort of digital imagery oriented course that prepares the student for a life among the chips and the VFX schools have been providing what they felt was a relevant curriculum. From my experience many of the students that have come from these places are very well-trained and current. Even if you successfully enter the business you can expect to have periods of crisis where you can't get arrested. The first time it happens its excruciating and seemingly endless. Eventually the phone does ring and you're back in the saddle again. Learn to love even the times of forced unemployment, those periods may be the only time you get off for years. As far as entering the Citadel goes - the best and simple advice that can be offered is "get involved".
There is no industry left to "adapt to."
The only job in the vfx industry seems to be in teaching. Schools keep churning out ever more students (such as myself, a recent grad/aka sucker) to get into an industry that really has no career future at all. The entry level job description has all but evaporated.
Tens of thousands of dollars later, and no job in sight - that's when the feeling of being conned usually sets in, for any graduate but the most naive - but luckily for the film/3d education system, there's a sucker born every minute.
Niel...thanks for commenting. At this point the most aggressive campaign being waged for Californian artists seems to mounted by Lee Stranahan utilizing his blog on the Huffington website. I'll get more info and get back to you.
Well Geo I don't know about kids playing in the sandbox and it isn't a question of liking it or not. Simply the world has changed and what we used to see as "our" business is now global and heading more that way. The complaints here are probably standard to any group when they see their way of life suddenly disappear. I imagine that all the workers in livery stables were stunned when the model T started showing up on the roads and they found their mode of income demolished. They either adapted or moved on. I think we're in the same boat. However I don't think that the "digital officers and commanders" are set. Many are being swept up in the same sea change. A lot of established companies have failed and there will be more to follow. Many companies have gone with the flow and opened facilities in other states and countries. Business isn't necessarily patriotic.
Hey Rick,
Is this why you "wake up screaming" and checking the obits.? I haven't smoked anything in quite a long while, but in my opinion the ones that are (and will be) hardest hit are the mid to late career digital "on the ground grunts". The digital officers and commanders are pretty well "set", and the new digital recruits will adapt to an industry that is ever-changing. The neighbors' kids are arriving at the sandbox we are used to playing in, and we don't like it!
Geo
this is a very sad story for all the young talented people who are going to school right now to be digital artists in the US. By the time they graduate there will be little to no opportunity to work here nor any opportunity to travel since there are many students training to make films digitally throughout the world.
Globalization of production will kill the US film industry before too long.
Another great article Rick!!
I have a question, are there any visual effects lobbyist working on getting these types of tax credits for us here in California? Actually a bigger question is are there any visual effects lobbyist in California at all? We've all heard about the tax credits and other incentives that other states and countries have for a long time. But why is it seem to be so difficult to get the some thing here?
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