Hollywood struggles vs. new film meccas overseas

Dec 27, 2013 by Nick Perry
This undated file film publicity image originally released by 20th Century Fox shows the characters Neytiri, voiced by Zoe Saldana, right, and Jake, voiced by Sam Worthington, in a scene from "Avatar." Director James Cameron announced plans to shoot and produce the next three "Avatar" sequels largely in New Zealand. What Cameron gets out of the deal is a 25 percent rebate on production costs, as long as his company spends at least $413 million on the three films. (AP Photo/20th Century Fox, File)

In the old days, filmmakers flocked to Hollywood for its abundant sunshine, beautiful people and sandy beaches. But today a new filmmaking diaspora is spreading across the globe to places like Vancouver, London and Wellington, New Zealand.

Fueled by politicians giving out generous tax breaks, filmmaking talent is migrating to where the money is. The race allows powerful studios —with hundreds of millions of dollars at their disposal— to pick the best deals.

This month, James Cameron announced plans to shoot and produce the next three "Avatar" sequels largely in New Zealand. Cameron gets a 25 percent rebate on production costs, as long as his company spends at least $413 million on the three films.

"There's no place in the world that we could make these sequels more cost effectively," says producer Jon Landau. It is neither the archipelago's volcanoes nor its glaciers that are attractive, because the "Avatar" movies will be shot indoors. "We looked at other places," says Landau. But in the end, "it was this rebate."

In exchange, the local economy will benefit hugely, Landau says, comparing the ripple effect to the boost that comes from new home construction.

The deal was "the best Christmas present we could have possibly hoped for," says Alex Lee, an Auckland, New Zealand-based entertainment lawyer. The news is especially welcome because the local screen industry is facing a potential drought: Peter Jackson's "The Hobbit" trilogy is set to wrap next year. Thanks to the "Avatar" sequels, the 1,100 workers at Weta Digital Ltd., the groundbreaking digital effects house Jackson co-founded in 1993, can keep working through 2018.

"It would have been a real shame if we had lost any of that talent and they had to move to follow the films," says Wellington Mayor Celia Wade-Brown.

Driving the trend are powerful global forces squeezing the entertainment industry. Falling DVD sales are putting pressure on movie-making budgets, while the demand for grows. The spread of technology and skills around the world is creating a huge number of special effects suppliers—some using cheaper labor than can be found in Hollywood.

Vancouver, Montreal, London, New York and Wellington are competing to become the next new center of activity. Even though digital work is borderless, workers must live and be paid locally to generate the income taxes and spending that governments seek.

The tax incentives race is destined to accelerate next year. State incentives in California—home to "Star Wars" pioneer Industrial Light & Magic—are too small to accommodate big-budget movies. State Assembly member Raul Bocanegra is preparing a bill to expand their scope, but it could take months to get through committees, says his chief of staff, Ben Golombek.

And the U.S. federal incentive, a tax deduction of up to $20 million per film or TV episode, is set to expire at the end of 2013.

Industry business leaders say they're simply following the money.

"This is no different than any other multinational business," says Sir William Sargent, co-founder and CEO of Framestore, a London-based special effects business that worked on likely Oscar-contender "Gravity" and has offices in Montreal, New York and Los Angeles. "We're just going to where our customers are."

Joseph Chianese, executive vice president at consulting company EP Financial Solutions, says the competition to offer attractive incentives is intense. More than 30 countries and 44 U.S. states now offer tax breaks to filmmakers.

The mix "changes daily, but it's not going away," Chianese says. "We have now trained a generation of filmmakers and TV makers that production doesn't have to happen here anymore."

Explore further: Sony faces 4th ex-employee lawsuit over hack

3.8 /5 (5 votes)
add to favorites email to friend print save as pdf

Related Stories

Canada basks in role as global special effects hub

Jan 26, 2012

Canada's westernmost province of British Columbia, one of the top regions for filmmaking outside of Hollywood, is rapidly gaining prominence as a world leader in animation and special effects.

Hobbits, superheroes put magic in NZ film industry

Nov 25, 2012

A crate full of sushi arrives. Workers wearing wetsuit shirts or in bare feet bustle past with slim laptops. With days to go, a buzzing intensity fills the once-dilapidated warehouses where Peter Jackson's ...

Israel's Teva to pay $718 million in Israeli taxes

Nov 11, 2013

Israel's Teva Pharmaceuticals Industries Ltd. says it has reached an agreement with the country's tax authority to pay roughly $718 million to settle a series of claims against the drug maker.

'Avatar' director launches China 3-D venture

Aug 08, 2012

"Avatar" director James Cameron's company is launching a joint venture in China to market its 3-D technical wizardry to the country's fast-developing film and television industries.

Visual-effects firms get a boost from video games

Jul 30, 2013

In a bombed-out section of a futuristic downtown Los Angeles, a man sits on a tire next to an overturned car, staring at a computer-controlled screen fastened to his wrist, oblivious to the machine gun fire and bomb blasts ...

Recommended for you

Why the Sony hack isn't big news in Japan

21 hours ago

Japan's biggest newspaper, Yomiuri Shimbun, featured a story about Sony Corp. on its website Friday. It wasn't about hacking. It was about the company's struggling tablet business.

Sony faces 4th ex-employee lawsuit over hack

Dec 20, 2014

A former director of technology for Sony Pictures Entertainment has sued the company over the data breach that resulted in the online posting of his private financial and personal information.

Sony tells AFP it still plans movie release

Dec 20, 2014

Sony Pictures boss Michael Lynton denied Friday the Hollywood studio has "caved" by canceling the release of "The Interview," and said it still hoped to release the controversial film.

2012 movie massacre hung over 'Interview' decision

Dec 19, 2014

When a group claiming credit for the hacking of Sony Pictures Entertainment threated violence against theaters showing "The Interview" earlier this week, the fate of the movie's big-screen life was all but ...

Clooney slams skittish Hollywood after Sony hack

Dec 19, 2014

Film star George Clooney slammed the Hollywood movie industry for failing to stand up against the cyber threats that prompted Sony Pictures to cancel release of the movie "The Interview."

User comments : 1

Adjust slider to filter visible comments by rank

Display comments: newest first

evropej
not rated yet Dec 29, 2013
I thought raising taxes was good for the economy? ROFL

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.