GREEN SCREAM: The Decay Of The Hollywood Special Effects Industry.
Related: Hollywood’s VFX Crisis. And note this:
The problem is government subsidies. A place like Vancouver might say, “Hey, if you’ve got a $100 million movie, we will pay your studio $40 million. We’ll pay 40% of your budget if you do your movie here.” When the first Harry Potter film got started, for example, Warners wanted to take advantage of the tax credits in the UK. So 75% of the work had to be done in the UK. The visual effects work on that type of film would typically have taken place in California, but instead it all went to London. For The Hobbit, the studio went to the government of New Zealand and said they were thinking of shooting it in Prague unless they got certain terms, and New Zealand changed their laws to allow that. You have companies popping up in places where they couldn’t otherwise survive, and good companies running efficiently in places without subsidies, and they can’t compete and they’re going under. It’s not survival of the fittest: it’s survival of who has the subsidy.
Any independent study I’ve ever seen says these subsidies are bad business, because for every dollar they pay out, they typically only return 70c. You have to understand that a lot of this money isn’t going back into the local economy: it’s just going to the stars and the studios back in LA.