Interesting write-up, though the piece seems to have such a strong philosophical bias regarding trade that it is putting up flags for me.
I can speak to the issue of state production and film incentives a bit though. Michigan introduced them a few years ago and it was frankly shocking to witness the speed at which an entire industry can descend on a region. Within the year my Uncle's home was scouted for filming, every night out at a bar contained the topic of which celebrities you saw, friends in post-production all had projects, and my stoned girlfriend was calling the cell phones of her new friends Juliette Lewis and Drew Barrymore to try and have them score her concert tickets because apparently they like to get wasted and do drugs as much as she did (dodged a bullet there). I mean, there are industries that take advantage of targeted tax breaks all the time, but the studios move a lot faster than manufacturing. Then the subsidies got scaled back after some taxpayer backlash and the election of a Republican governor, and poof. Veritable crickets. On and off, -just like a faucet.
Fucking hubski. "Screw the MPAA" get a gajillion shares. "My peeps are losing their houses" gets "fucking boo hoo." Michigan's film incentives didn't get "scaled back", btw, they got reneged upon. Which means production companies went bankrupt because their budgets suddenly went up by millions. I know people who ended up losing their careers because of Michigan's decision not to honor their commitments.
Fuuuck. A few companies built awesome sound stages around town because they thought they had a viable business. Now they're empty shells. Unfortunately, the film incentive existed at the whims of the legislature and governor. As soon as we elected a Republican, his first order of business was to get rid of the film incentive. It was ostensibly because it was too expensive, but really it was because it's a liberal minded industry in a state that it left leaning, but with a sizable conservative minority who didn't want to see it further "corrupted". Really what they ended up doing was to ruin a bunch of investments that could've paid off in a few years. Now all we get are a few super high budget (Transformers and Batman/Superman, for example) movies that exhaust the pre-allotted film budget years in advance, with none of the cool low to mid range budget stuff that actually gives people sustained work. So, so lame.Michigan's film incentives didn't get "scaled back", btw, they got reneged upon. Which means production companies went bankrupt because their budgets suddenly went up by millions. I know people who ended up losing their careers because of Michigan's decision not to honor their commitments.
Oh, don't I know it. Everybody felt pretty bad, no doubt. Thing is, it's one thing to have incentives "dry up." You can go "oh well, on to the next one." It's that "oh shit career ended" aspect of it that made the industry go "yeah, fuck that." You are getting one mammerjammer of a movie soon, though. More than that I shouldn't say. Friends of mine are looking at 9 months of away game.
I was just posting it because it described an angle that I hadn't head much about before (off-shoring), but even then, I'm still suspicious of the article because it came off as so protectionist and therefore possibly agenda driven. I've seen those themes a lot living in the Rust Belt, but not so much digital production. It looks like it was a combination of scaled back and reneged as far as I can tell, -from wiki: So it looks like it was reduced, but then there is this: Which led to this: So existing projects got the rug pulled right out from under them. On the ground here it basically felt like hostile tea-partiers and more traditional Republicans were swept to power and they nuked incentives to an industry that they were hostile to. And they did so in a spectacularly unfair, disorganized, and ham-handed way. We still have reduced incentives, but to what end? All that stuff I talked about in the lead is gone. You don't feel the industry on the streets here now, so I guess you could say it has been effectively killed, even if the reduced incentives still technically exist. You lose all of the halo and multiplying network effect. If you're going to incent and create an industry, tell me what the point is if you aren't a top dog. We were in the top 3 and now nothing. Why bother with even capped incentives at this point. Wiki for reference: http://en.wikipedia.org/wiki/Film_industry_in_Michigan#The_Michigan_Film_and_Digital_Media_IncentiveMichigan's film incentives didn't get "scaled back", btw, they got reneged upon.
In March 2011, Governor Rick Snyder(R) announced plans to put a $25 million cap on the Michigan Film Incentive, which at 42%, was one of the most aggressive film incentives in the United States. CNN reported that agreements signed prior to the cap proposal would be honored and that there were 43 pending applications on file at the Michigan Film Office...
Public Act 291 of 2011 (Section 125.2029h), was signed into Michigan law, effective immediately, on December 21, 2011. The new law honored existing production approvals with the following conditions stated in the Michigan Film Office 2011 Annual Report. Pre-production must begin within 90 days of approval, projects must have a signed agreement to participate and funds spent prior to obtaining a signed agreement do not qualify; additionally, budget increases must be approved by the Film Office and the Treasury to qualify for the incentive. An audit with an independent Michigan CPA is required to obtain a post-production certificate, which is then submitted with the production's Michigan Business Tax return. Eligible projects are motion pictures, documentaries, television series, miniseries, interactive television, music videos, interactive games, video games, Internet programming, sound recording, ditital animation and interactive websites. Criteria for incentive approval are listed as follows...
The production is financially viable. Utilization of existing infrastructure (studios, post-production facilities, equipment rental, etc.). The number and wage levels of direct jobs for Michigan residents created by a production. Ability to show Michigan in a positive light and promote the state as a tourist destination. Magnitude of estimated expenditures in Michigan.
Results of reduction in funding...In March 2011, the Michigan Film Office reported to CNNMoney.com that 43 pending applications could not be addressed until the legislature reached a final decision. Michigan Movie Magazine's, Chris Aliapoulios said, "As these applications sit in limbo, the projects involved are seeking out new locations..."
In its 2011 publication, the Michigan Film Office reported that 24 of 85 project applications were approved, 15 of those projects wrapped in 2011, 2 remained in production and 7 were in pre-production and scheduled to shoot in 2012. Eight additional projects that began in 2010, 2011 expenditures for these projects are included in the 2011 report. Twenty-five projects spent an estimated $201,968,238 in Michigan and were awarded $75,650,154. These productions created 3350 jobs, or an equivalent of 766 full-time employment.
Really interesting article, especially since I'm from British Columbia and my wife got her first contract as a layout designer last year in an animation industry. Because of our tax breaks we have a few studios with offices up here, although work can still be hard to come by. Oddly enough Pixar closed up shop last year as well, laying off a hundred workers. I suspect that the work is being shipped overseas to somewhere with even more incentives and cheaper labour than here.
Toronto's incentives are better than Vancouver's. Britain's are better than Toronto's. Dubai's are better than Britain's. Not to get protectionist, but the only way to build a film industry is to build facilities. That's why New Mexico still has one ten years later. That's why NoLa does. That's why Atlanta does. Well, that, and they're right-to-work states. True story: I know several people who worked on... well, a big film that shot partially in Vancouver. One of them was the DIT. Part of his gig was he had to work with a local assistant - this is typical of Canadian film shoots; they assign an untalented local kid to follow you around and learn how to do your job. Film Canada pays their salary and then the next time you shoot in Canada, Film Canada pays your salary to that kid and forces you to stay home. Points, don't you know. Here's the funny thing. My buddy offered to pay for his own assistant out of his rate. As in, "this guy is free to the production but I don't want to have to babysit some Points Kid who has no idea what he's doing and is just there to steal my job." The production refused to let him bring anyone because not only was Film Canada paying the assistant's rate, they were subsidizing the production more than my buddy the DIT was being paid to have him there. PROTIP: if you aren't in Hollywood, you are the foreigners being discussed. Between the death of Digital Domain and the death of Rhythm & Hues, friends of mine lost three projects.