The "Free Money" Trap

The question of the day:

Can the Visual-Effects Industry Survive the Pitfalls of Free Money?

Free money isn't always free -- in fact, it can actually be downright disastrous for an industry.

That was the dilemma at the heart of the panel "Visual Effects and Tax Incentives: A Race to the Bottom?" at TheWrap's Grill@Locations conference Friday at the West Hall of the L.A. Convention Center. ...

Namit Malhotra of Prime Focus and Mark Driscoll of Look Effects discussed the difficulty of staying afloat in the visual-effects industry in the current global business environment.

Driscoll and Malhotra discussed how the already struggling industry has been hit even harder by the tax incentives from different governments across the world that lure studios to farflung areas -- and forced visual-effects companies to reinvent themselves.

"There's more and more of us getting into the business, we're diversifying to take advantage of the spectrum of the subsidy zones around the world," Driscoll (at left) offered. "But if you combine that with the reduction and the concentration of the movies being made, it tends to create this environment where we're basically just trying to kill each other to get the next job." ...

This dynamic isn't new.

Seventeen years ago, I stood in a Disney Northside* hallway with CG supervisor Jim Hillen and discussed how CG houses were cutting each others' throats by low-ball bidding sub-contracting jobs from the big studios.

This was in or around 1996.

So what, exactly, has changed? Except that things are now worse because governments here and abroad are throwing tax-payer dollars at big companies to subsidize the work?

Exactly zip.

What would be good is if every part of a production interlocked in some kind of synch. If directors worked in-studio with the CG crews the way they do with their production crews, and review the work as it happens. That's the way it is with animated features, but not as much with their live-action cousins.

Two CG veterans at Disney were griping about this very thing today, when I was going through Walt Disney Animation Studios.

* Disney Northside was the high-water mark of Disney Feature Animation. It was located a couple of blocks from the Bob Hope Airport in Burbank, and housed 'Dinosaur" and a couple of other projects. It was open for a few years, with frequent bus shuttles back to the main lot, and then disappeared when the division shrank. Today, Disney Feature/Walt Disney Animation Studios is housed in its entirety inside the hat building next to the 134 freeway.