March 2nd, 2011

my face

Subsidies aren't sticky

Most subsidy programs are expected to be temporary. The government gives a nascent industry a chance to blossom, which they see as an investment. Once the industry is established, there are jobs for locals and taxable revenues for the state. But the film industry is not normal industry. Traditionally, film production companies start up to produce a film, after which the film is released and crew goes its separate ways to either join an existing production or start up a new company to produce a new film. Individual productions are also highly mobile. If crews will move thousands of miles for light or scenery they'll definitely keep moving to follow the money.

I started thinking about this after reading that World War Z is pulling out of Philadelpha after the city's film tax credits were suspended. In most other industries who see their subsidies cut they'd grumble about it, then look at their equipment and warehouses and sunk costs and home mortgages and suck it up. But film production is fundamentally ephemeral. You do it till it's done. If you're lucky you can re-use some of what you've built for your new project, but every project is different.

There are other reasons to subsidize film production. Bringing attention to your area, for example, seems perfectly reasonable. New Zealand has attracted lots of tourism with its "perfect slice of Middle Earth". But spending tax money to "establish" a mobile project-to-project industry seems like a fool's errand.