Thursday, July 15, 2010

New Studios in Higher Priced Geography

There is the often-repeated meme that animation production gets outsourced to the low-cost providers in the low-cost countries, but in many cases it's not about budget, lower budget, and lowest budget. Often the driver is making a high-quality product that sells, and for that the savvier film producers recognize the need for a work force and infrastructure that gets the job done.

Which, of course, explains this:

New Zealand’s largest CG (computer-generated) animation studio has opened in Auckland.

The Freemans Bay facility is a joint venture between Australian-owned Oktobor (part of the OmniLab Media group) and US company Backyark Animation Pictures.

Its primary client will be US kids network Nickelodeon, for which it will create animated series ...

New Zealand offers production subsidies, but does anybody seriously believe that a government underwriting of a few million dollars makes up for lower labor costs and a weaker currency? I sure as hell don't.

The answer is the same as it's always been: It doesn't do a movie producer a damn bit of good to go to the provider with rock-bottom prices (with talent to match) and create an animated or live-action feature that nobody wants to see. They might not spend a lot of money, but they don't make any money.

Zero or minimal profits is not what the moving picture game is about. That's why there's a lot of vfx production in the higher-rent areas of California. That's why Illumination Entertainment went to Paris for production work on Despicable Me.

Cheap doesn't cut it. Quality does.

19 comments:

Anonymous said...

well that's certainly hypocritical
how is this any better or worse than the Indian studio which does Nick's work now ? isn't the driver a better quality product which sells, since Madagascar Penguins and Barnyard are both high end TV hits made in India ?

so you dont mind if LA jobs go to NZ but you object to India for the same work ? isnt there a word for that ?

Steve Hulett said...

My (non-hypocritical) point: work going to a higher quality, higher cost studio -- even if it's out of the U.S. -- is an admission by movie producers that quality counts.

And bodes well for other high quality studios.

vfxsoldier said...

Steve,

While the report says the reason to start a studio in Auckland is for a "surplus of talent", I still feel that government subsidies played a huge role in luring US jobs overseas to these places.

New Zealand offers a subsidy that covers 15% of production costs. That's a huge difference. It's no suprise that the article ends with:

The official ribbon-cutting ceremony will take place “in a few months”, Mr Everett said, once politicians schedules could be coordinated.

Here is the problem with this. Nickelodeon is the main client that will be receiving this subsidy. At the same time The Animation Guild wants to organize Nickelodeon Animation.

If TAG and the greater IATSE wants to represent more artists in California they are going to have to take a stand on these subsidies.

These subsidies undercut US production and are a violation of international trade law.

Anonymous said...

I still feel that government subsidies played a huge role in luring US jobs overseas to these places.

How are these jobs "US jobs" if the studio is in NZ? Oh that's right, no other studio in the world is allowed to produce animation except for the US, so when ever a studio opens up in a country other than the US with some investment from a US company, suddenly it's "they tuk ur jurbs!"

But when companies from outside the US invest in US companies, Americans don't give a thought about taking jobs from another country.

You don't hear Indians complaining when Prime Focus bought Frantic Films (with offices in the US and Canada).

These subsidies undercut US production and are a violation of international trade law.

Oh please, spare me! The US is just as guilty of granting subsidies in other industries. If you want to complain, complain to the US government first to become an example, then you can get on your high horse. The US is no saint in this area, that's for sure.

Anonymous said...

"Madagascar Penguins and Barnyard are both high end"

Really? High End? As in High Quality? Are you watching the same shows I am?

vfxsoldier said...

Re: 10:53:00 PM

How are these jobs "US jobs" if the studio is in NZ?

If you read the article you would know why I consider them US jobs. Nickelodeon is the producer. It's a US company and would have chosen to do the animation with a US company had the NZ govt not lure them over with a 15% subsidy.

I don't give a second thought at all about overseas producers like Imagi coming here to do animation work. We did not offer them a subsidy, they came here because there is a strong talent base.

I can't speak for the US being a saint in other industries but the Californian vfx and animation market is the only one in the world that exists without subsidy. It wouldn't be much of a match if other countries had to play on a level field without subsidies. It helps artificialize the price for Nickelodeon and other US studios.

The studios win, we lose.

Anonymous said...

It's a US company and would have chosen to do the animation with a US company had the NZ govt not lure them over with a 15% subsidy.

You don't know that for sure. Maybe, just maybe they got the job based on the strength of their work. Have you ever seen Oktober's work? It's pretty good.

So you think the ONLY reason for companies to do work in the US is talent, and the ONLY reason to not work in the US is cost cutting? You seriously don't think there are talented artists in any other country in the world...wow, that's pretty closed minded.

It wouldn't be much of a match if other countries had to play on a level field without subsidies.

Then organise and talk to your politicians! Complaining to a bunch of artists is not going to change a damn thing. You either compete to survive, or you die, just like all areas of life. Like it or not, we are part of a global economy, and just like corporations lower prices based on competition from other corporations, so do governments. It's the free market that you Americans love so much at work.

Californian vfx and animation market is the only one in the world that exists without subsidy.

I am pretty sure that's not true. There are probably many countries who don't have subsidies in VFX and animation. Before you sprout nonsense, make sure you are backing up such things with facts.

The studios win, we lose.

Actually, the NZ artists win too.

vfxsoldier said...

Have you ever seen Oktober's work? It's pretty good.

So you think the ONLY reason for companies to do work in the US is talent, and the ONLY reason to not work in the US is cost cutting?You seriously don't think there are talented artists in any other country in the world...wow, that's pretty closed minded.


New Zealand has some great artists no doubt. Weta is the best but even Peter Jackson doesn't have faith in them according to his review on NZ subsidies:

There’s nothing this country offers that justifies the budget hit Universal would have taken by basing the film in a country with no production incentives.

Then organise and talk to your politicians! Complaining to a bunch of artists is not going to change a damn thing... It's the free market that you Americans love so much at work.

Doesn't organization mean talking to fellow artists about the issue? That's what I'm doing. I love the free market which is why I'm against international subsidies. It's not us that's engaging in protection, it's you.

Anonymous said...

Actually, the NZ artists win too.


Really? Well lets see how many foreign artists are brought in.

I wish I had numbers for Weta as far as non NZ artists...But I know A LOT of artists there are not from NZ and work on contracts then leave NZ.

Anonymous said...

I love the free market which is why I'm against international subsidies.

Let's be realistic here, what has more chance of happening: USA granting subsidies for VFX and animation; or every country in the world that has existing subsidies will scrap them.

I understand where you are coming from, I really do, but you are complaining against foreign country's policies, talk about an impossible mission. You will seriously have more chance of getting your politicians to create subsidies than getting the world to scrap theirs. Pick the battles that you actually have a slight chance of winning, I thought you would know this simple rule of war seeing as you have "soldier" in your handle.

But I know A LOT of artists there are not from NZ and work on contracts then leave NZ.

I am a non-US citizen who has worked in the US. Just replace "NZ" with "USA" in your comment and you have the same situation. The US does not have a monopoly on talent.

vfxsoldier said...

I've been to Weta Digital. Every artist I met there was an American. It's true they come back here after the project is done there.

It's actually a big reason why many NZ citizens want to end the film subsidy. Most of the money goes to fund foreign workers who spend the money in the US.

The NZ govt has lost a lot of money for too:

http://vfxsoldier.wordpress.com/2010/06/14/nz-film-subsidies-result-in-net-loss/

Anonymous said...

I've been to Weta Digital. Every artist I met there was an American. It's true they come back here after the project is done there.

Well you mustn't have met all the artists there, because a lot of my New Zealand, European, Australian and Canadian friends are also working at Weta.

Actually, it's funny you should say that, because it seemed to me that when I worked in the US, I bumped into more non-Americans that Americans.

Like I said, complaining about other countries subsidy policies is like trying to stop the world from spinning. And if that's the only thing you are doing, then all you are going to end up with is a sore throat.

Pick the battles that you are more likely to win.

vfxsoldier said...

While the UK, Canada, NZ, and Australia are engaged in a trade war, the best battle to pick is none. Let them kill each other.

Anonymous said...

Then there is no point complaining if you think the situation will work itself out.

But will it go as you say it will? Australians, for example, know that even their own local film industry would likely crash without even local subsidies, like or or loathe it, it is what it is. For an industry so used to relying on subsidies for local productions, do you really think it's likely they will end subsides for international productions too? Of course not!

My friend, I like your blog, I really do. You say some good stuff there, but sometimes you have absolutely no idea what you are talking about, and this is one of those times.

So let me say this straight: some countries at some point in time will ALWAYS have subsidies. You are dreaming if you think that they will magically stop.

Anonymous said...

when i was at weta it was pretty evenly split 33% kiwis, 33% americans 33%rest of the world.

Anonymous said...

It's probably also worthwhile to point out that the majority of the leads are American.

Anonymous said...

that's not true, or particularly worthwhile.

suffice to say there are Kiwis, Brits, Russians, Indians, Canadians, and , yes, Americans who are a big part of wetas technical and artistic success....which is true of a lot of studios in the US too.

as someone mentioned above, the US doesn't have a monopoly on talent.

Anonymous said...

I wonder where all this blather was back in the late 80's and early 90's when the industry was small and we all roamed about europe and the pacific rim making great money and getting solid reels jumping between dublin, london, madrid and berlin...

oh, ya I forgot no one cared...we never cared about the nationality of who we hired. If they were good, they got they got the job and we were all better for it.

Anonymous said...

@ steve
they're doing the same work which was being done in India so far
at a higher cost adjusted for subsidies. so how is it assumed to be "higher quality" automatically ? it's the SAME projects, episodes are split !!

the irony which no one gets is that India is that other country which offers no subsidies, grants or trade barriers in media.

everyone else is loading the dice.

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