The great digital exodus…. The fading of a California dream
….I know this topic is far afield from my normal postings but this morning as the caffeine from that first wonderful coffee cup excited my neurons a radio program about digital production caught my attention and it proved in the end to be more validation for me that state governments do not know how to handle their finances. I do not listen to NPR on a regular basis but on a Sunday in Texas with every AM station talking about how to invest your money Freakonomics on NPR won out.
Hollywood is synonymous with motion picture production and for a long time that included the visual effects industry, but that is no longer the case. Hollywood and its environs is now a vast wasteland when it comes to the digital production facilities the very ones that put the icing on almost all the movies and television shows we see. Based on that broadcast today on NPR those production studios have for the most part moved to either Canada or England, and the reason was simple…. money.
As with most businesses today cost cutting is a way of life and it is no different when it comes to television or the movies. Now I know when we see that it cost 90 to 100 million to produce a movie or a hundred thousand dollars to make one episode of our favorite television series one would ask why would those digital production companies be leaving en mass. As we know water, (and other things), rolls down hill and when you get to allocating money for a production visual effects at times is not high on the list.
The program Freakonomics explained in detail how England and Canada in particular made it almost impossible not to relocate to their countries. In Vancouver, BC the show described how if a company relocated there the Provence on top of tax incentives would cover 60% of the wages of any employee. To a mid sized digital production company this would be almost impossible to pass up.
Looking at the other side of the picture to find out why that same company would even be looking to relocate we find a state with business and personal taxes heading into the stratosphere. Then when you add to that the expense of finding a home for the production people to live in with a market that few can afford you have the reason that there is a drought of skilled craftsman to work in the visual effects studios. This is but one glowing example of lack of common sense by our state and federal government when it comes to spending our tax dollars.
Now when you consider that California has the largest population in the United States, one can only wonder what the state government is doing with all those tax dollars. However since California has spent more money than it has taken in for the last decade and used short term fixes like borrowing to cover the shortfall, is it any wonder it cannot offer tax incentives to keep business from leaving the state?
Maybe California should take a closer look
at where there tax money is spent
find the excess
and try and retain the companies
that are still there.