A Theory on Government Subsidies For Animation

It’s currently a hot topic among animation circles, and especially their cousins in the VFX industry. Yes, government subsidies are contentious no matter what side of the debate you’re on. Those for, argue that they retain jobs and industries in countries (or regions) that would otherwise lose them to cheaper competition. Those against, argue that they entice companies to slide from country to country and region to region as subsidies are created and retracted. Subsidies are a form of support from government, but today, I’m proposing support of a particular kind.

Little Witch Academia

This past weekend, I watched the short film Little Witch Academia, which I enjoyed immensely. (It’s stunning to think that it packs more action and character into the same amount of time as an episode of any TV show.) What piqued my interest in the short in addition to the animation was how it was funded.

Yes, Little Witch Academia was created by a studio called Trigger and although a group of ex-Gainax animators were involved, the short itself was the product of many young animators who were the recipients of a grant from the Japanese government.

The grant itself is entitled ‘Young Animator Training Project‘ [link]. Essentially, the Japanese government endows a certain amount; in this case 214.5 million yen (about US$2.27 million), which is distributed among four studios. These studios in turn create projects such as Little Witch Academia with a staff of young animators who essentially learn on the job. The goal of the project is that training as Japan has seen an increase in animation being sent overseas.

Why Not Direct Government Subsidies?

Many people see direct government subsidies in the form of tax relief as a great tool for creating demand. While that is certainly true (one need only look at Ireland to see an industry grown from scratch thanks to a healthy subsidy), subsidies themselves can only go so far. They can lower production costs, but they do not address the causes for them to be so high in the first place (that’s usually a macroeconomic concern.)

Moreover, direct subsidies are inherently risky because they are susceptible to undermining. Don’t believe it? Look at British Columbia, a state that had generous government subsidies for VFX and animation but is now seeing such work leave thanks to a larger subsidy being offered in Ontario and other jurisdictions.

Direct subsidies also do not, on their own, either increase work or skills. The rise in work they bring in certainly do, but tax relief itself does not spur creativity or the desire to create new content.

Why Indirect Government Subsidies Are Better

Indirect subsidies are essentially efforts like the Young Animator Training Project. They are governments putting money into animation, but rather than attempting to ‘pull’ demand, they ‘push’ it. Consider the following points:

They Can Focus On the Problem

Indirect subsidies can be meted out in a specific manner. They can be targeted at specific areas or problems that direct subsidies are only so good at accomplishing. They can focus on specific skills, ages, genders and regions. Once a problem is identified, an indirect subsidy can be created and applied quickly. In Japan’s case, work was going abroad and young animators were getting neither the training or employment they needed.

For many in animation, cost is a considerably concern. However, costs are only relative insofar that they are related to supply. It’s a complicated issue, but generally, clients will pay for skills they can’t find anywhere else. Indirect subsides can improve skills and mitigate this concern.

They Can Fund Things That Otherwise Would Never Be Made

Unfortunately, commercial studios are notoriously risk averse; hence the reason we had so many Shrek movies long past the series’ use-by date. With studios unwilling (or unable) to take risks with creating content, governments can step in to fill the void. Practically every country in the world has some sort of commission or council that funds film projects. While many of their projects live up to the stereotype of permitting artsy fartsy content to come to fruition, they can also give more mainstream content the extra helping hand it needs.

The Secret of Kells was one such project that, while not overtly art house in nature, it did receive assistance from both Bord Scannán na hÉireann (the Irish Film Board) and the state broadcaster, RTÉ. Both entities receive their funding through public sources but they utilise it in order to create the best content possible. No-one, of course, would argue that the world (and animation in general) is worse-off because the Secret of Kells was released.

They Don’t Bet On Horses

In line with the point above is that indirect subsidies do not bet on horses so to speak. Direct subsidies anticipate a certain level of investment but they also cannot control who undertakes such activities. In that respect, they tend to be bets placed with public money. Just look at what happened in Florida with Digital Domain. It was a successful company that whittled funds from the State of Florida to build a studio with the promise of jobs. Said facility was built and jobs were created, but when everything went south, the results were catastrophic.

Indirect subsidies mitigate such risks by simply ignoring them. Instead of backing ventures that potentially turn a profit, indirect subsidies instead anticipate no profit being made; in other words, they eliminate the risks associated with the production costs. The difference is significant because production costs are the risk that studios undertake when producing animation. The reason is simple, they must carry their burden before earning them back through box office sales and so on. If grants can reduce or eliminate production costs, then studios have no reason not to produce!

This reduction in risk permits studios who receive them to be a bit more daring in their offerings; another reason why films from the National Film Board of Canada are so widely regarded.

Their Films Act As A Calling Card

To come back to Kells for a second, that film was utterly and unashamedly Irish in all aspects. It was rightfully recognised as being the ideal siren film for Irish animation which was only amplified by its Academy Award nomination. Films sponsored through indirect subsidies can accomplish this on a successful scale. As you might expect, such films generally tend to champion the source of their funding; Kells with Ireland, Little Witch Academia with Japanese animation.

They Can Incite Creativity

Direct government subsidies for animation bring in a lot of work, but do they necessarily incite creativity among the artists who work on them? Sure, American shows are popular abroad as well as at home, but The Simpsons has been animated in South Korea for over 20 years, and I have yet to see anything emanate from that country resembling Springfield’s first family.

Yes, cultural differences can be a sticking point for direct subsidies. What good does it do to local talent if the work all day on something they may not necessarily relate to? Would it not perhaps be better to have them work on something they identify with culturally and socially? Perhaps even something that could improve their cultural identity?

Working on something you identify with is much more likely to spur you to create something yourself. If you work on a film that permits you to put a bit of yourself into it and learn from it, you’re more likely to perhaps take on an independent film, right?

Conclusion

All the above isn’t to say the direct subsidies do not have their benefits, they certainly do. In Ireland’s case, an industry has been built up from near nothing! However, indirect subsidies can accomplish much more, in both the financial and creative sense. They are better for the industry on a range of levels and should be utilised more.

Let’s hear your thoughts on government support for animation! Do you favour one form over another? Should they be abolished entirely? Leave a comment below!

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