Glaciers melt, forests burn, yet there remain deniers of man-made climate change.

Few deny, though, that economic climate change is parching Southern California’s entertainment industry.

The drought in SoCal production jobs is causing some pros to migrate to more favorable climes, while other once-plentiful entertainment specialties are becoming threatened in the region. At the Santa Barbara fest this year, below-the-line pros are the focus of panels as well as Variety’s inaugural Artisans Awards on Feb. 3.

Michael Cioni, CEO of digital post house Light Iron (recently acquired by Panavision) has some tough love for pros suffering in the new climate. “People miss the old days,” he says. “My advice to them is to lead or get out of the way.”

Cioni says the days of a production community mainly based in Los Angeles are gone for good. He blames the Great Recession and rapid technological change for squeezing below-the-line pros, but adds much of what feels like a squeeze is really uncertainty about the future.

“If you can see the future, you can see yourself in it,” says Cioni. “Today, you ask people to think five, seven, 10, 12 years from now, and people are like, ‘I don’t know what to think.’ ”

Even reliable corporate pillars of the old entertainment economy, such as Kodak and Sony, have seen their roles reduced or nearly eliminated, he observes.

But there is a reality alongside this perception. Subsidies draw work from one area to another — which is the rationale for offering them, after all. If there is such a thing as financial “greenhouse gases” changing the climate, government subsidies are among the biggest culprits.

“Subsidies have been pretty much decimating live-action and visual effects work here in Southern California, and in most of California,” says Scott Squires, a longtime visual-effects supervisor who has been active in the fight to improve the lot of vfx artists. And he sees vfx compensation and working conditions continuing to decline, in California and elsewhere.
Both physical and digital production have migrated to locales where governments subsidize film production. Jobs have moved with the shows, and some pros have followed the jobs.

The Assn. of Digital Artists, Professionals, & Technicians, or ADAPT, attempted to challenge foreign subsidies using World Trade Organization treaty rules, but that effort ended earlier this year. “After months of campaigning,” said the org in a statement, “we were only able to raise a minuscule amount, which would only cover 2% of the total legal costs.” The rapid collapse of the vfx industry in California may be a cause.

Some California pros are leaving the business rather than uproot their families and become global nomads. As a result, SoCal is becoming a gradually less hospitable place for productions that choose to remain there. Squires reports one L.A.-based post-production company recently got work on a studio release but had trouble finding compositors to do the job.
“The studios are tightening their belts,” says Squires, “and it’s not just the below-the-line people. I’ve talked to a producer or two that used to be hired on big projects and they’re now being offered half the amounts they used to be offered.” And they have some reason to cut costs: The collapse of DVD revenue, soft theatrical attendance, and the rise of digital distribution, which has lower margins than the studios are accustomed to.

“In our neck of the woods, there’s always a squeeze, and the studios are always behind it,” says Steve Kaplan, labor organizer for IATSE Local 839, the Animation Guild. He, too, cites subsidies, which helped drive offshore much “in-betweening” (the in-the-trenches part of animation).

Kaplan says in the generally lucrative feature animation sector, “you don’t see a lot of this work being offshored — yet. If the producers could think of a way to do it, I think they would.” But when DreamWorks Animation suffered a string of box office fizzles, it laid off 500 and announced plans to move production on “Captain Underpants” outside the U.S.

DWA didn’t specify where “Underpants” production would go. China and India are possibilities, but Canada is more likely.
“This has been attempted before,” says Kaplan. “It’s my understanding DWA had attempted to do feature animation at the studio in India that was owned by Technicolor, but the work had to be re-done, and that impacted the timeline.” Canada’s animation studios are non-union, but artists in the country’s western region are talking to Animation Guild Local 891.

It’s not all bad news for displaced pros, though. Cioni thinks there is hope, starting with the proliferation of new distribution outlets, which drive demand for production and post services. He urges pros suffering in the new climate to educate themselves and embrace the new digital world. “There’s ample food for everybody.” He points to digital companies like Netflix, Amazon, Hulu and Buzzfeed as examples.

“They come out of nowhere and they dominate. If you go to Netflix and Buzzfeed, do you think they talk about the good old days? Probably not.”