Monday, March 4, 2013

Why won't Hollywood Pay its Fair Share?




Where is President Obama when you need him?

Oh, that's right, raising money from Hollywood celebrities.

The article excerpted and linked below describes how subsidizing Hollywood films is driving good special effects companies out of business.  Of course, as the cost of technology and animation drop we will eventually be able to hire the out of work special effects artists to help us deliver better BIM in the built industry.  But the way these folks are being treated is wrong.  And the option of a union, which I vehemently oppose in the public sector, may make sense for a group like this in the private sector.

Of course, removing the subsidies would help as would better legal agreements that didn't allow directors to act like dictators regarding changes.  An true integrated agreement among all the players with an adjusted compensation model would be great, though that is probably a hard sell to the existing stakeholders with union representation.  Regardless, this is another example of the difficulties associated with the transition from the old blue social model to the new knowledge and information economy.

The problem is government subsidies. A place like Vancouver might say, "Hey, if you've got a $100 million movie, we will pay your studio $40 million. We'll pay 40% of your budget if you do your movie here." When the first Harry Potter film got started, for example, Warners wanted to take advantage of the tax credits in the UK. So 75% of the work had to be done in the UK. The visual effects work on that type of film would typically have taken place in California, but instead it all went to London. For The Hobbit, the studio went to the government of New Zealand and said they were thinking of shooting it in Prague unless they got certain terms, and New Zealand changed their laws to allow that. You have companies popping up in places where they couldn't otherwise survive, and good companies running efficiently in places without subsidies, and they can't compete and they're going under. It's not survival of the fittest: it's survival of who has the subsidy.


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James L. Salmon, Esq.
Collaborative Construction
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