Visual-Effects Artists Urge Tariffs to Fight Runaway Production

Visual-Effects Artists Urge Tariffs to Fight
Aaron Kupferman

Sony’s announcement in June that it was moving its Imageworks headquarters to Vancouver delivered yet another blow to Los Angeles as it struggles to retain the nuts and bolts of production while other states and nations offer lavish sweeteners.

But to a group of visual-effects artists, it was just one more example of the need to ramp up the battle against such subsidies: Rather than try to match incentive-for-incentive, they maintain, why not pursue a different strategy: trade sanctions against some of the more egregious examples of such givebacks?

In the coming weeks, the artists are expected to launch a campaign to raise money for a legal effort which, if it succeeds, would force the U.S. government to impose a tariff on countries that lure away business by subsidizing labor costs.

“The business of subsidies is essentially a (shell) game, an unwinnable race to the bottom,” said vfx artist Scott Squires.

To take the fight to the government, in this case, U.S. trade authorities, Daniel Lay — author of the popular VFX Soldier blog —  and others have formed the Assn. of Digital Artists, Professionals and Technicians (Adapt). Their plight has drawn the attention of Assemblyman Mike Gatto (D-Calif.), who aims to add language to pending tax-incentives legislation. The wording would urge the federal government to impose sanctions, including tariffs, as a way to combat “unfair and illegal competition” from other countries that have hijacked visual effects, music scoring and other post-production work.

The idea of trade sanctions has been opposed by major studios, which otherwise are backers of the incentives legislation, along with unions and guilds. In 2005, the MPAA warned that such sanctions could hurt exports and affect ongoing trade negotiations. Two years later, when the Screen Actors Guild and other locals demanded the U.S. trade representative take action against Canada, the rep refused. Attorney Alan Dunn, who argued for SAG and others in the effort, recently called the politics insurmountable.

This time, the visual effects artists and Adapt are making an end run past the trade rep, by petitioning the Dept. of Commerce and the Intl. Trade Commission, whose decisions are subject to review by the U.S. Court of Intl. Trade. The advantage is that if conditions are met, action is mandatory, according to law firm Picard Kentz & Rowe, which reviewed options last year.

The artists believe their tack is bolstered by the MPAA itself, which has defined digitally transmitted movies as goods, for the purposes of fighting piracy. The MPAA maintains, however, that pirated movies are goods, and effects work is a service. Moreover, studios have said that such a strategy would have no effect on the domestic front as U.S. states or cities could still offer production tax incentives.

Nevertheless, lawyers for Adapt are confident such work that crosses borders is a product. They admit that the strategy, even in victory, is not a long-term solution, but, they believe, it could certainly be a disincentive to the idea of incentives.

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  1. Lea Harth says:

    The film and television industry is an INTERNATIONAL industry by definition. The entire world is the backdrop and productions should have the freedom to shoot where they can find the best crews, cast and scenic backdrops. You cannot do a playground “claim” on an entire industry and label those working in the same industry in other countries as illegally hijacking your jobs. Good grief! Did you forget about the origins of this industry? Face it – people in the industry are struggling where ever they are, so get out of the way and let productions work!!!

    • anactualvfxartist says:

      Your comment is completely irrelevant to this issue. First of all, the issue is about POST-production, not production. Secondly, these jobs are not being filled by those in other countries working in the same industry. The jobs are being filled by the same people as before, only they are forced to move because movie studios are chasing subsidies. I can’t believe the amount of people trolling this article with posts that display a vague knowledge of the film industry at large, yet total ignorance of the issue at hand.

    • minoton says:

      “You cannot do a playground “claim” on an entire industry and label those working in the same industry in other countries as illegally hijacking your jobs.”

      There is only a “claim” on those jobs being hijacked by government funded subsidies. This is not productions shooting where they find the best crews and scenic backdrops. These are productions chasing subsidies. Bought and paid for, plain and simple. Example: Much of ‘Battle Los Angeles’ was filmed where? Louisiana. Why? Subsidies.

  2. minoton says:

    VFX has been part of the cinema since its inception, putting people in front of blue screens almost from the beginning. If you’re disappointed with the stories being told, complain to the screenwriters and directors and the studios that green light them. Don’t complain to the VFXers. We don’t create the stories, but many times we save them.

    • Joe Blynden says:

      Well thats sort of true and not true. The first use of colored lights to create a matte was 1925ish Uses of multi layer stacks with hand cut or hand bleached goes pre 1900’s Still photography was doing multi layer comps as soon some one figured out you could to multiple exposures in the 1840’s and 1850’s

      • minoton says:

        > Yes accept you have neglected to look the average life of any visual effects. IE optical effects company. very very very very few have lasted more then a decade since the beginning. The problem is not new. Why do you think RG/A is an ad agency now and what is left become a design firm and not a vfx house.

        Which happened through organic business practices, whether or not they could compete with other shops doing the same type of work. NOT because they were having to bid against foreign effects houses that were getting huge governmental labor tax breaks.

        > I give you ‘Transformers: Age of Crap’. Has made over 1 Billion dollars at the box office. It’s a piece of storytelling crap. Again, 1 Billion dollars. Because of Wahlburg? Because of some girl whose name I can’t even remember? No. People paid to see it because of, guess? The Transformers.

        The CVD will be a tariff against the major studios, not the VFX companies. It will prevent the studios from dictating that the VFX work needs to be assigned to a shop in a country paying the studios millions of dollars in subsidies. It will have a neutralizing effect on that decision. No longer would a VFX shop have to close and reopen in a subsidized locale. Part of the CVD is to prove economical damage to a WTO member’s economy in an industry at the hands of another member. Look at L.A. There’s your proof. Will another nation tax American imports? I don’t know. Are they willing to do it over an industry that they are losing money on? Create a tax for an industry that they receive on average .13 to .16 cents for every dollar spent? I would like to see how they justify that.

      • rslittle says:

        No rga went a way long before any of that as did mass illusion and Mannix

      • Joe Blynden says:

        Yes accept you have neglected to look the average life of any visual effects. IE optical effects company. very very very very few have lasted more then a decade since the beginning. The problem is not new. Why do you think RG/A is an ad agency now and what is left become a design firm and not a vfx house.

        VFX never saves a bad movie either. If the movie is bad the VFX don’t matter. Or you think sitting through Jack the Giant Killer that the VFX saved it?

        a CVT isn’t going to save the US VFX industry. Since there isn’t one anymore for the most part. Most VFX companies accept ILM are Foreign owned. Do you really think a CVT is going to make WETA and MPC open bigger shops in the US? Or RSP or Animal Logic? A CVT is a stop gap. Nothing more. If there isn’t a plan beyond that the CVT will do nothing. It also won’t matter if all of a sudden the UK, France, Canada, China, etc….. All put a CVT in place for charging a CVT on their product. Really why can’t that happen? There is zero to stop them taxing the import of American product into their countries. They could even only impose that tax on literally american product. So movies from other countries aren’t charged a tariff or CVT. What is the actually plan.

      • minoton says:

        Key words: . . . *cinema* . . . *almost*. Thank you for the history lesson. It goes to further my point the importance of VFX to the film industry and to the economy of where the VFX facilities (as well as the U.S. film industry) took seed and grew.

  3. Sorry, no sympathy for the green screeners mainly because of your ridiculous sign that reads “Your movie without VFX.” Well, personally, that’d be great! Then you’d have to go back to making movies the real way with actual people, and real locations and sets instead of fake Lord of the Rings crap. But then you’d actually have to think about good stories to tell, which seems to be a losing battler at this point, so pile on the VFX!

  4. john kelso says:

    How about the Canadian LUMBER industry ? They are totally subsidized to destroy the US forest products industry. Canada started this Tax subsidy insanity in the 90’s. I recall the Los Angeles Canadian Consulate denying that they had any intention to steal the Motion Picture industry from Los Angeles. What a Load !!! How mush are the Automotive tax subsidies in Canada ?
    What is alberta now 75% ?? GAG ME WITH A SPOON A’ ITS ALL ABOUT SUBSIDIES. And American digital experts were moving to Vancouver by the hundreds starting in 95. Visa permits. Don’t get me started on Practical EFX. When it comes to hydraulics and Powder work, we are still flying up there to teach Canadians. Stunt men are ‘Shadowed” by Canadian ‘trainees’ so they can steal all the trade craft knowledge they can.. BUT LOS ANGELES HAS THE STANLEY !!!!!!!!!!

  5. aniseshaw says:

    Sony isn’t an American company. American workers have no more claim to it than any other foreign nation. Additionally, Hollywood films aren’t primarily consumed in American either, world wide revenues far outstrip domestic markets.

    I highly doubt Sony is solely moving to Vancouver for subsidies. The market is stretched thin for talent, and people are being hired all across the globe right now. Anyone hired that is not a resident of British Columbia is not eligible, and the studios have been moving people out from Ontario like mad.

    It’s sad, but L.A. is reaping decades of complacency with an imperialist monster. No American film artist or animator complained when US studios bullied their way into foreign countries, using their monopolies on distribution and massive amounts of money to decimate local competition – Canada can barely hold it’s own film industry, and not from lack of interest or effort, but because the competition was rigged.
    There has been historical precedence to prove this, as several times Canada has tarriffed or outright banned American entertainment imports and quickly the local arts have flourished.

    Don’t get me wrong, I feel for these working people. They just want to do a job that they love. Perhaps they should take a page out of what Canadians have had to do for near a century and try to build something themselves for their own local market. Then when they realise that they’re up against the hollywood monster that will continuously smash them back down, perhaps then they will know who the real enemy is.

  6. john kelso says:

    I was a founding member of FTAC. We spent 400 grand with Dunn, 4 years, 10’s of thousands of hours, and an ocean of sweat fighting for COUNTERVEILING TARRIFS. We got our hat handed to us by the Federal Goverment. The Key to the “CV’ strategy is a UNITED lobby of LABOR and MANAGEMENT. That means IATSE & MPAA lobbying for the “CV”. Your problem is that IATSE and MPAA will actually oppose you at every step. You do not have enough bagles Mr. Digital guys.

  7. Real person says:

    Considering yourself an “Artist” when you’re doing grunt work for a multi-billion dollar corporation, that advertises in its “Art” other multi billion dollar corporations, using your “Art Skills” . Boy, you need to get off that huge ego boost.

    There’s no art in being a corporate puppeteer, and if all Sony/Imageworks/Pixar/WhateverVFXStudio employees would stop considering themselves as anything but button monkeys we’ll all be great.

    In order to be a real artist, getting out of the herd in order to be heard is essential. 401k, Benefits, Starbucks on the 405 while driving to work.

    Get the *@#$* outta town, look up real artists first, see their lifestyles – now look at yourself again.

    You’re matte painting for Philip Morris, Coca Cola or Apple using so many “third” parties involved biting off that commission, what do you really expect to earn by going to the office and being your bosses’ monkey?

    • anactualvfxartist says:

      Dear hipster on a soap box. No one gives a sh#t. You can call us whatever you want. We provide a highly skilled service that can’t be reproduced elsewhere, and we don’t want to be forced to move around just to perform that service. If someday the rest of the world creates better vfx, great. But that hasn’t happened yet, so why should families have to move around the globe as studios chase subsidies.

  8. krmercier says:

    As with so many things, it’s just not that simple — and also not that useful to look at this one issue in a vacuum. Have a look:

  9. krmercier says:

    All over the world, people and families move to where the work is. All.Over.The.World. But only the film/tv business feels it has the right to complain about international competition. After decades upon decades of paralyzing the indigenous film/tv production / distribution of other countries (disgustingly using clauses in the free trade agreements — originally crafted to protect industries stemming from the production of natural resources — to bully other signatories into submission), suddenly the USA, like a petulant teenager who hasn’t got their own way, wants to find new ways to bully. Perhaps inhabitants of Iowa should complain about the brain/talent drain and punish NY and LA for enticing your artists away from their homes. But moreover: where is the national outcry about textiles, technology, automotive (…I could go on and on) all running away?! But, no. Only the entertainment industry feels it has the right to have its cake and eat it too. N.B. This author is a 25yr veteran of film/tv… who moved across the country, away from family & friends, in order to build a career.

    Cry me a river. I’m exhausted, having to listen to this infantile bellyaching.

    • matteobject says:

      Nobody has a problem with work naturally gravitating to the locales that are optimal for particular industries, you’re never going to make it big as an actor/actress in Iowa, you had to go to Hollywood in order to be discovered, but that’s not what’s happening to the film industry now.

      Local governments are throwing money at Hollywood because it looks good on the job creation sheet, you don’t have to wait for any pesky factories or stadiums to get built, you dangle the cash and Hollywood shows up with their carpet bags for their free handouts and presto, instant jobs.

      Of course, most of these jobs will be filled with people from out of state rather than creating jobs for locals (these aren’t shovel ready jobs, so unless you have a surfeit of highly skilled VFX artists sitting around doing nothing, you’re going to have to import the talent) and the highly mobile nature of the industry means that there’s no permanence to them, as soon as the free handouts go away, so will the work.

      Half the people working in VFX in Vancouver were working in Los Angeles a year or two ago and it’s only a matter of time before BC taxpayers realize they’re giving Hollywood half a billion a year whilst making cuts to education & social services, whereupon the subsidies will end and everyone will have to chase them to the next place dumb enough to give free handouts, Chernobyl maybe?

  10. wilsom says:

    Subsidies are a small part of the problem. Spend the money to invest in the future of VFX as a whole. Spend the money to take on the studios, glean part of the profits earned from blockbusters, start an international guild or union. I can’t help but think that VFX artist are being pushed to in-fighting rather than collaboration. The studios are making the money. Focus on getting that, that’s the answer.

    • El Guapo says:

      Spend what money exactly?

      • Wilsom says:

        This money….

        “the artists are expected to launch a campaign to raise money for a legal effort”

        I would donate to a campaign or a committee that organises artists internationally and starts discussions amongst facilities in a collaborative manner.

  11. Vfxnomad says:

    Is there any precedent to imposing tariffs on intangible goods? Is the tax imposed upon each successive iteration of the shot for just the final of a shock. Tariffs are imposed when a product is brought accross the border, how would we impose a tariff on a digital delivery? And what constitutes a digital delivery?

  12. imitaitoncrab says:

    Living in BC is looking better & better every day

  13. Am Dr. Hug, you’re confused by whats actually happening. “If states and other territories can offer the same services and comparable locations for fractions of the price, who wouldn’t make the exodus? ”

    No, each country and state offers studios cash to be there. (not tax rebates, not tax credits but cash – directly or indirectly) It’s no less expensive it’s just that the politicians have taken taxpayer money (for roads, schools, etc) and give it to corporations.

    No independent study I have seen has shown benefits to the states or countries. Return for most states is 13-16 cents on the dollar. Those working in film production in Atlanta, New Orleans, etc. are having part of their salary paid for by the other state taxpayers. Michigan taxpayers had to pay over $9 each just so OZ the great and powerful could film there. Your politicians have chosen what to spend that money on and it’s not for the public good. And unless your location pays the most you may not get any work regardless of your services or abilities. Each state and country is sold the same bill of goods but there are only so many movies being made. They can’t all be ‘winners’ and by winning I mean giving more money every year.

  14. minoton says:

    Meanwhile, Canada makes it more expensive and time consuming to hire non-Canadian, foreign nationals. Yes, this does apply to NAFTA countries as well.

  15. I Am Dr. Hug says:

    Supply and Demand.

    If states and other territories can offer the same services and comparable locations for fractions of the price, who wouldn’t make the exodus? As a Southerner who is rooting for the influx of production work in the South (Atlanta, Louisiana, Carolinas, etc), I welcome this whole movement as technology enables production companies and producers to do the same work they would in overpriced California, elsewhere.

    Learn to take you’re own advice and “Spread the Wealth” California and give the rest of us a chance.

    Race to the bottom? More like, people spoiled by entitlement who are getting a reality check.

    • Maybe you should re-read the article, you seem to have missed the point. ADAPT is fighting international subsidies, and you’re talking about states taking work from other states using state subsidies.

      • jackofseveraltrades says:

        he’s not even talking about subsidies, he’s talking about work being taken to other states for cheaper labor, which is not what this article is talking about at all.

    • Bruce Wright says:

      Wow, somebody didn’t read the article. This is about governments giving taxpayer money to lure production, and a lawsuit to try and *stop* that.

      Unless, of course, you’re absolutely for the Louisiana taxpayer paying part of your salary. In which case you’re the one in need of a reality check, because you’re the one living on a government check!

      Eliminate the government handouts. I’m fully confident that California production can compete in a free and fair market. You think your locales can compete if you weren’t getting government assistance? Write your representative and tell them to stop subsidizing production, then.

      Unless, of course, you feel entitled to that government check.

    • jackofseveraltrades says:

      That’s not what’s going on here, VFX studios are not moving to Canada because it’s cheaper. If that were the case, then I’d say that’s free market forces at work and I’d be ok with it. But when a government like Canada’s offers a 60% rebate using taxpayer’s dollars just to have the work done in their country, that’s a distortion of the free market that creates an unsustainable economic bubble.

      • krmercier says:

        I think there’s mention of this already, but for clarity: “rebate” and “tax credits” are not the same thing and (here’s the kicker) are rife across many industries. They are widely under-understood.

        It’s only film/tv who regularly complain about it.

    • El Guapo says:

      Wow you really have no idea what you’re talking about huh? The reason other territories and states can offer lower prices is because it’s being subsidized by the government. It costs about the same to make something in California as it does in Louisiana, it’s just that Louisiana’s government has decided to give these giant corporations a big hunk of taxpayer money so they’ll make their movies there.It has nothing to do with technology, it’s all about getting a sweet slice of that corporate welfare pie.

      Saying we are the “entitled” ones is the irony of ironies. “Entitlement” is the only reason you southerners have any sort of foothold in the film industry in the first place.

      • Joe Blynden says:

        Well that is not true it doesn’t cost the same to make something in Say Louisiana. One can buy a house in Louisana for 1/4 to a 1/10th of what a house cost in Los Angeles. There for workers can work for quite a bit less and have the same or better standard of living.

        Vancouver on the other hand is the most expensive city in North America. There is actually no incentive to lower cost when it comes to the rebates because the more you pay the more you get back.

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