LA Times just published a story on how some California visual effects companies are shutting down, due to cheaper labor offshore and tax credits in other states, which results in production companies sending their work to other states.
By taking advantage of tax credits in Vancouver, Canada, and London — where visual effects work for “Iron Man 2” and “Inception” was done — or employing low-cost labor in China, Singapore and India, filmmakers are able to shave tens of millions of dollars off a movie’s production budget.
“We would bid stuff at break-even and they would say, ‘We can do the work for 20% to 40% less going offshore to Canada, U.K. or Australia,’ ” Says one production company representative in California.
A Los Angeles based visual effects artist I know, emailed me this: “This is sad but it is the reality for Los Angeles based VFX companies . Rates have dropped, and now there are 100’s of new matte painters and concept artists, young and hungry looking to do work in features for anything to get the foot in the door. On top of it I was working at places last year where Compositor also matte paint smaller sometimes bigger shots and all the composting related things combined with that, meaning less work for the matte painters that only focus on matte painting with no other additional current industry tools . US is outsourcing since they can not make the same profits anymore, pay freelancers/contractors on time, and have no cash flow . When I worked as an Art Director and got more involved in meetings, realized that they were times were Film Studios wouldn’t pay the FX Vendors up to three months, and even in some meetings they asked for free concept work . . .FREE . These are film studios, so no wonder the work is going somewhere else cheaper now. They were enough signs and the most and unfortunate thing is that rates have gone lower. We all have to adjust. I have had to travel to other states for work. Regardless it is very sad, and unfortunate .
Not only is the work being outsourced to other countries and foreign talent, but our Supervisors are begin hired to go and train them and work with them making sure all works fine as it does and did for years back home , so with that happening, it will only get worst . The only thing that will change it is our government offering tax breaks like other countries do within the state for California for Film related companies and vendors to help keep the work at home.”
