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Pac Title's Phil Feiner: Tax the Studios on Incentives

Speakers discuss the troubled VFX business model during an online town hall meeting.

Phil Feiner, CEO of Pacific Title & Art Studio in Burbank, proposed that the visual effects industry set up an MPAA-type of organization with a hired lobbyist in order to "lobby the federal government to tax the studios on the rebates that they get as normal revenue. That will eliminate any type of incentive, worldwide, and put everybody on an even playing field.

"The silver bullet is to take out tax incentives and rebates worldwide," asserted the exec, who was part of an online ‘VFX Town Hall’ held Friday to discuss the industry’s troubled business model. There is no consensus as to how to address its troubles. Some have proposed the formation of a VFX union and trade association, though not all of the panelists viewed that as the answer.

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For some, VFX companies need to “adapt or die.”

Paddy Eason, co-founder of London’s Nvizible, admitted that he wasn’t sure there will even be visual effects companies in 10 years. “If we accept that we have hit a ceiling on what we need technically and creatively--that the technology is out there--then perhaps the mother ship with a heavy R&D department won’t be required,” he said. “Maybe it will be built show by show.”

Jules Roman, president and CEO of Tippett Studios in Northern California, questioned whether that is achievable on tentpoles, though she thought it might be for smaller movies.

Tippett made recent news when it greatly reduced the size of its team after completing work on Sony's After Earth since it didn't having another big project in the pipeline.

Citing the recent bankruptcies of Rhythm & Hues and Digital Domain (both of which were acquired by new parent companies), she said this is a "devastating time for the California visual effects industry. ... For a growth strategy, we have to have the government behind us."

Roman added that she is more encouraged looking to work in other areas, such as on apps, games, commercials, or indie films. “Visual content is needed,” she said. “What we can do on mobile devices is changing and will change our business.”

On the possibility of VFX companies transitioning from a service provider to content producer, Carl Rosendahl, founder of PDI, related: "It is really hard. There are a lot of failures in that world."

“We dabbled in that," added Neishaw Ali, president of Toronto's Spin FX. "It was way too costly, you have to have a pool of money dedicated to development and it can take a long time."

Rosendahl reported that about four weeks ago the Visual Effects Society gathered about 35 people—representing VFX facilities and artists, studios, and unions—for a three-hour private discussion. He reported that he and Ken Williams, CEO of the Entertainment Technology Center @USC, have been “tasked with pulling the information from that meeting together, following up and talking about next steps. We are planning to make what we learned public."

He added: "There is hope for this industry to survive but there is quite a lot of pain ahead."

A previous “Pi Day” Town Hall meeting was held in March. At that meeting, an estimated 250 attendees participated in Los Angeles, which was also streamed live and involved additional group participation from roughly 75 VFX personnel in the Bay area, 25 in Vancouver, five in Austin and 10 in Wellington.