Monday, December 30, 2013

In the Red

Some viz effects companies might be getting large subsidies, but that doesn't make them profitable. Just ask VFX Soldier:

... {S]ubsidies do not create a sustainable VFX industry. If the financial statements [of Double Negative, Framestore and MPC]... are true, then it’s pretty clear that UK VFX industry is not sustainable at all, even with massive subsidies that need to increase every few years.

For example Double Negative is losing about $US 8 million a year which is probably just as bad if not worse than CA VFX companies that don’t have subsidies and also have to pay their workers overtime. ...

What Soldier references is the money-losing state of various large, British effects studios. (You can click on the links of his listed companies and read the ugliness for yourself.) Tax breaks are generous, and still they're underwater.

Which is one of the difficulties with subsidies. They mask the vitality (or lack thereof) of the companies they're propping up. Seventy-odd years ago, the federal government helped keep Walt Disney Productions in business with large government contracts for war films. But WW II ended, and the Mouse House had to survive on its own.

If you don't have a viable business model, a government handout will not, long-term, save you. And a viable business model is something other than performing sub-contract work for big entertainment conglomerates. Double Negative and the others have to find a way to own their separate destinies and not remain barnacles on the hull of the SS Mouse or Good Ship News Corp. Or be welfare queens dependent on the Cameron government.

Whether they can do that or not is the continuing question.


Dave Rand said...

Just asks the former Employees of Canadian based
Meteor Studios, Lumiere Studios, DAMNFX, Big Bang, FAKE studios, and REDFX, they became the FIRST to "subsidize" their respective hollywood blockbusters.

Almost Forgot the 450K owed vfx workers at New Breed Studios Montreal for work on the soon to be released Horns.

Where is all the money going?

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