“Hollywood North,” has long been a magnet for filmmakers and “runaway” Hollywood TV production seeking financial advantages, diverse locations, a sophisticated technical infrastructure and a talented workforce. Major studios were developed in the greater Vancouver area in the late 1980s, and the government of British Columbia (BC) began providing industry incentives in 1998. Today, BC accounts for about 60 percent of all foreign location film and TV production in Canada, and total direct and indirect full time-equivalent jobs generated by film and TV production are estimated at over 36,000.
SHOW ME THE MONEY
Tax incentives are a big factor in attracting US productions. The government of Canada offers tax incentives, amounting to 16 percent of Canadian labor costs, to qualified foreign film and video production through the Canadian Audio-Visual Certification Office. The BC government provides a 33 percent refundable tax credit for Canadian or international film and television production companies that incur eligible labor costs in the province. More recently, BC’s Digital Animation or Visual Effects (DAVE) tax credit rebates 17.5 percent of labor costs for digital animation, VFX and video game development. Recipient corporations don’t have to be Canadian-owned or have an interest in the copyright.
Little wonder that Vancouver has experienced an influx of international VFX studios to the marketplace, joining a strong roster of facilities already operating in town.
The DAVE tax credit is “a huge driver” in the growing VFX industry, says Randy Lake, executive vice president and general manager of Sony Pictures Digital Production Services. “In the majority of cases, the client claims [the tax credit] directly or the VFX facility can claim the rebate on a per-project basis and pass it on in pricing to the client.” Sony Pictures Imageworks (www.imageworks.com) is moving its headquarters from Culver City, CA, to Vancouver, where it will be the city’s largest VFX and digital character animation studio by floor space.
“Vancouver is not just a TV town,” says Andrew Orloff (below), one of the founders of Zoic Studios (www.zoicstudios.com), creative director for episodic television and president of the thriving BC office. “Motion picture studios are even more strict about saying they need tax credits on VFX. They want to see their money on the screen, and they go where they can get the most. Internationally-financed projects for TV and film get financing based on Vancouver tax credits.”
Tim Jacobsen, executive producer and co-founder of FuseFX (www.fusefx.com), which opened a full-scale facility in Vancouver last fall, finds that “not all work requires tax incentives, but you need to have options for all clients: those shooting in Vancouver or those working here in LA, but directed through a Vancouver office. Vancouver allows us to expand and cast our net wider.”
Ollin FX (www.ollinvfx.com) has a capacity of 120 at its headquarters in Mexico City, which offers tax benefits through NAFTA, plus an LA office established 10 years ago. “We were already one of the major VFX and post facilities in Latin America, but we wanted to reach Hollywood from the inside,” says Charlie Iturriaga, VFX supervisor at Ollin FX. “That’s where the key creative people are. We needed space in LA so our artists could sit down with the creatives.”
Right now, Ollin FX is “running the numbers” on establishing a facility in Vancouver, where it has been working with several independent artists on shots for House of Cards. “We’re in the process of understanding how things work there, how we can help clients who require tax incentives,” Iturriaga says. “We have been working in two locations for years so we have a roadmap for transferring data and sharing resources.”
Tax incentives aren’t the only financial benefit for productions. With the Canadian dollar currently valued at approximately 84 cents to the US dollar, “the exchange rate alone” is advantageous to clients, Orloff says.
WHAT’S NOT TO LOVE?
A seaport town hugging the mainland of BC, Vancouver is a bustling modern city endowed with great natural beauty. It’s known as a very desirable place to live and work. “Artists really like Vancouver,” says Orloff. “It’s more like an East Coast city in style: it’s a real walking city that has good public transportation, too. There are lots of independent neighborhoods and stores.”
Vancouver can double for locations worldwide, both quaint and contemporary, and there’s a wide array of terrain just outside the city. “Production can get a lot of value from a diversity of locations — the cityscape, neighborhoods like Gastown that can play New York, and the forest primeval is a short drive away,” says Orloff.
The area is also well-equipped for stage-based shoots. “Vancouver is well positioned to capitalize on virtual production, especially for TV, with stage space and the production apparatus to handle big greenscreen sequences,” he notes. ABC’s Once Upon a Time, a Zoic client, is a “big, virtual-set show” that’s based in town.
Some may believe that the cost of doing business and the cost of living in Canada are higher than in the US, but Orloff finds real estate and utility prices “a little cheaper” than the LA area.
Vancouver is also a straight run up the Pacific coast from LA, so it offers the benefit of proximity. “It’s a two-and-a-half hour plane ride,” says Orloff. “We can be in an LA edit room or at a pitch meeting tomorrow. And we can communicate by phone in realtime. Fiber on the West Coast is very good for sharing media and files in pretty much realtime, too.”
“Being in the same time zone as Hollywood offers a lot of workflow advantages,” agrees Lake. “The amount of productivity lost with even small differences in time adds up.”
VFX studios opening in Vancouver need to be assured of a deep pool of talent to maintain their facilities on a full-time basis and enable them to bulk up as projects demand.
Historically, Vancouver has had a talent pool of Canadian animators working on television or direct-to-DVD content. “There was a nice solid base of animators, modelers and CG specialists here,” says Orloff. “Now, the talent base has exploded, and the last couple of years have seen an influx of compositors. We’re at a tipping point with more Canadian artists who have at least five solid years of production experience. And people are coming in from all over the world.”
Zoic’s (left) roster in Vancouver includes artists from “all over Asia, Israel and other Mid-Eastern countries, Central Europe, England, Australia and New Zealand. They all want to come here, become Canadian residents and build the industry,” Orloff explains.
Lake says that Imageworks has also “been successful at attracting senior talent to Vancouver. With our growth and more of our competitors in the marketplace, Vancouver has emerged as a hub of activity for the industry. Artists go there feeling safe that there are lots of opportunities in town. They’re coming in from San Francisco, Australia, New Zealand and Europe.”
FuseFX (below) has hired locally but has been challenged to “find talent that hasn’t already been snagged by other companies,” says Jacobsen. “The community has done a great job educating talent and making training available to those who want to become VFX artists. But it’s a process; it takes a while for a pool of talent to grow large enough to accommodate everybody’s needs.”
“Having so many facilities in Vancouver doesn’t scare us,” says Iturriaga. “It means a lot of talent is there. Of all the cities we’ve considered expanding to, Vancouver has the biggest benefits in terms of experienced talent and talent coming out of the schools. Louisiana offers tax incentives, too, but New Orleans doesn’t have the talent pool you find easily in Vancouver.”
The educational component is an important factor in building a thriving VFX industry. “We’re putting time and energy into growing the talent base by partnering with local universities — Simon Fraser University, Vancouver Film School, Emily Carr University of Art + Design — and offering internship programs,” says Lake.
Orloff says that Canada tightened some immigration regulations recently, which has created a short-term challenge with VFX hires. It’s hoped this situation will improve, since keeping Canada open to the best talent the world has to offer “will create a vibrant industry for the long term,” he states.
Vancouver’s chapter of the Visual Effects Society (VES) is “one of the most active and is growing in numbers,” reports Iturriaga, a member of the VES Board of Directors. “I’ve been really impressed.”
ZOIC EXPANDS FACILITY AND CLIENT BASE
In 2006, when Zoic was working on Battlestar Galactica, which shot in Vancouver, it set up a splinter unit to support the show, take advantage of tax credits and put more VFX on the screen. Then more series shooting in town — Syfy’s Eureka and ABC’s reboot of V, “a big, virtual-set show” requiring several hundred shots per episode — fueled Zoic’s fledgling office and drove the company to add “more and more VFX production capacity” to the Vancouver office, says Orloff.
Zoic now occupies 14,000-square-feet on two floors of The Landing building in the historic Gastown neighborhood, “a great location and super place to work,” Orloff reports.
“We have 254 employees, and none of them have computers under their desks. Terminals are connected by fiber to a co-location about four miles away where all the rendering is done and the servers are based. So we’ve been able to use our space more efficiently. We haven’t had to do all the build outs and cooling all that computer equipment would require.”
On the TV side, Zoic Vancouver is currently working on Once Upon a Time; the last season of TNT’s Falling Skies; The CW’s Arrow, The 100 and the new iZombie series; and a Disney Channel telefilm. The company also expanded its feature division; recent credits include Night at the Museum: Secret of the Tomb and Big Eyes, as well as the upcoming Crouching Tiger, Hidden Dragon II: The Green Legend.
Sony Pictures Imageworks (below) has had a Vancouver presence in Yaletown for the last five years. “We started very deliberately, focusing on the animation department for a couple of reasons: There was established animation talent in the marketplace, we were the only player doing high-end CG features for Sony Pictures, we were in the same time zone, and animation requires a lighter footprint in terms of tech support,” Lake explains.
The Smurfs was the first project in Vancouver in 2010. “Following the success of that, we added different departments. We’ve been very strategic about our growth,” says Lake. The decision to relocate Imageworks’ headquarters to Vancouver occurred when “we reached a tipping point and realized we could support all the departments,” he says. “The marketplace had changed, more and more talent came to Vancouver, and clients looked to us to bring down prices by working in tax-advantageous locations.”
The new space, which is expected to open officially on April 1, will occupy 74,000-square-feet in the Pacific Centre. “We will maintain ancillary space a block away for at least the calendar year,” notes Lake. “We’ll have roughly 700 people in our headquarters and expect to add another 300 by the end of year. We have quite an aggressive timetable.”
The Vancouver move doesn’t eliminate the company’s Culver City office. “We will continue to have a presence in Culver City to interact directly with clients,” says Lake. “Artists will be able to work seamlessly with Vancouver. What’s different about our approach is that we tend to run all projects as location-agnostic. Supervisors in Vancouver may oversee artists in Culver City. It doesn’t matter to the tech pipeline where the artists are.”
Even though Vancouver is a big TV town, Imageworks “intends to stay in the feature domain,” he says. Productions underway as the company relocates include Alice in Wonderland: Through the Looking Glass for Disney, the animated Hotel Transylvania 2, an untitled fully-animated Smurfs feature for Sony Pictures Animation, the Angry Birds animated movie for Rovio, an Adam Sandler live-action sci-fi comedy called Pixels for Columbia Pictures, and an upcoming animated Warner Bros. feature.
FUSEFX OPENS IN VANCOUVER
“We are well-established in Burbank, and Vancouver was a place we wanted to open an office. Our work on the new A&E series The Returned, which shoots in Vancouver, was a good motivating factor,” says Jacobsen.
FuseFX has a staff of nearly 100 artists, supervisors and producers in Burbank, where it provides VFX for over 26 TV shows and several features. It opened full-service branches in New York’s Soho and Vancouver’s Yaletown in November. The Vancouver office, 2,300-square-feet of loft space, can accommodate 20 or more artists. “Everything there will be the same as we offer in Burbank,” Jacobsen says, with full 2D and 3D departments, and an on-premises data center. “All the offices are able to support each other on projects.”
The Vancouver facility is finishing The Returned and continuing work on Fox’s new Backstrom, says Jacobsen. “We’re also working on the second season of Salem for WGN America, which shoots in Shreveport, Bates Motel for A&E, and the pilot Mad Dogs for Amazon.” FuseFX’s expansion to Vancouver netted it some shots for the final season of Falling Skies. “Although we have good relationships with the people at TNT and the VFX supervisor of Falling Skies, shots really couldn’t come to us in LA because tax incentives were required,” Jacobsen explains.
OLLIN FX CONSIDERS EXPANSION
Charlie Iturriaga recalls hiring from Vancouver to staff Ollin FX’s Mexico City headquarters (below) 10 years ago. Although VFX is “a worldwide business” that’s “territorially non-specific” thanks to the ease of remote connectivity, there are still issues of “security, bandwidth and networking” to consider when expanding.
So, for now, Ollin FX has hired several artists in Vancouver for the short term. “We’re running a couple of shots for House of Cards through them,” says Iturriaga. “House of Cards is 6K, so it’s been really interesting to see how to run 6K across three locations” — Vancouver, LA and Mexico City.” The company experimented with transferring shots for season two of House of Cards, in 5K at the time, through artists in Barcelona. But that process proved to be “much slower than doing it all in a single facility,” he reports.
Ollin FX’s Vancouver artists are also doing some shots for the sci-fi feature Chappie, which did some production in Vancouver; its director, Neill Blomkamp, resides in town.
Iturriaga believes there’s certainly enough work in Vancouver to support a potential expansion by Ollin FX. “VFX is one of the main tools of filmmakers today, whether they’re doing small films or tentpole movies. They need a lot of people and infrastructure, so we expect Vancouver to grow and grow.”