How to Light a Fire Under the Pacific Northwest’s VR/AR Content Production Industry

This editorial on stimulating Washington State’s VR/AR content production industry is my opinion alone. I welcome arguments for and against the program I propose here. Please feel free to contact me.

The State of Washington’s Film Industry

Let’s be honest. Seattle is a lousy town for film production.

Which is strange, in a way, because Seattle is a city that loves cinema. SIFF, Northwest Film Forum, Scarecrow Video, and myriad other film-related businesses and nonprofits, are all maintained by devoted cinephiles who have made Seattle one of the best cities in the world in which to enjoy the art of film.

When it comes to film production, however, it’s all about tax incentives. Governments around the world offer incentives to companies to encourage the production of films in their cities or regions. Film productions in Vancouver, B.C., for example, enjoy generous incentive programs from both the Canadian and Provincial governments.

This incentive system has its downsides and thoughtful critics. Incentives tend to create an itinerant work force that can’t put down roots, as film production companies hop from one city to the next, chasing better terms. Visual effects pioneer Scott Squires, a co-founder of local VR startup Pixvana, is one of the industry leaders who has spoken out about these conditions.

Washington Filmworks is the nonprofit organization tasked with managing the film production incentive program with the Washington State Department of Commerce. They’ve always faced an uphill battle to convince Olympia to become more competitive and attract more film productions in our state. Not for lack of trying, dedicated film professionals like those at Washington Film Works haven’t gotten Olympia to budge much on tax incentives.

Washington exists within a gap between Hollywood,and one of the best cities in the world in which to produce films. We’re in the tough position of having to compete with Vancouver for the right to send the most money to Los Angeles.

The unfortunate reality is that this is how movies are made, and it’s the reason why so few movies are produced in Washington State. The most ironic illustration of this system has to be the production of the 2007 movie about the World Trade Center Conference demonstrations of 1999, Battle in Seattle. This movie, ostensibly about clashes over globalization, labor, and environmental policy, was actually filmed in Vancouver, underscoring why those protests erupted in the first place.

A New Creative Industry Emerges in the Pacific Northwest

We find ourselves in 2016, with Seattle uniquely positioned to pioneer a new medium– virtual and augmented reality–that some reputable prognosticators are claiming could change society more than the Internet. HTC, Oculus, Microsoft, Magic Leap, Amazon, Google, and Facebook all have local offices working on VR or AR here. In the past few years an ecosystem of startups, studios, social networking groups, and nonprofits has sprung up in Puget Sound. A perfect storm of competitive innovation is getting underway.

And virtual and augmented reality aren’t simply the next entertainment medium. There is a robust and active community of companies and individuals developing VR and AR enterprise applications that will be integral to industries including architecture, engineering, medicine, and education, to mention a few. Investing in VR/AR content production in Washington state will stimulate these sectors of the economy as well.

It just makes sense to produce VR and AR content in the same region that develops the tools that allow us to create it in the first place.


Let’s create a tax incentive program for VR content production in Washington State.

Incentivizing the VR/AR content production industry in Washington will create a virtuous cycle of development that will benefit our technology sector, with benefits to all the other industries that are finding purposes for this medium. Instead of generating revenue that gets sent to Hollywood, this revenue will go right back into Washington state businesses and industries.

Hardware and software manufacturers based in Puget Sound can remain globally competitive if they’re privy to the visions of local content producers. And artists can only be empowered to define the medium if they’re consulted on and can contribute to technology that is under development.

Essentially this is an argument for vertically integrating the VR/AR industry as a whole within Washington state.


Arguing for a New Medium

While the incentive program for film production is a model on how incentives for VR content production might work, one should emphasize that virtual reality is not another kind of film.

One can argue that the artistic phylum of virtual reality content is games, not cinema. VR, while certainly sharing features with the medium of film, was created by computer software and hardware. Considering VR content as an outgrowth of the game, software, and computer hardware industries, rather than film, means that it is a distinct art form separate from film. And one could also argue that the medium’s enterprise applications–from training heart surgeons to designing houses–further sets VR/AR apart as a unique class of industry.

These sorts of arguments are bolstered by the Washington State Department of Commerce’s own internal reporting. Washington Film Works, in a report titled “Motion Picture Competitiveness Program” from September 2012, noted that Washington’s video game industry benefits from investment in film production:

As audiences begin to consume media in different ways, entertainment platforms are converging and there is greater opportunity for the creative sectors in Washington State to align… The work that WF provides industry professionals helps to retain our local talent and in turn prevents the video game industry from looking to Hollywood to provide their creative support.

Based on what I’ve heard from film industry friends and colleagues based in Los Angeles, Hollywood’s movie studios are investing heavily in VR. A Washington State tax credit program for VR content production would create incentives for these studios to invest in Seattle’s VR industry so that they can be closer to the epicenter of VR hardware and software innovation.

I believe there is a way to structure this as an effort toward partnership–not competition–with Hollywood motion picture studios.  We should welcome Hollywood’s movie studios to Seattle, where they can build production facilities and contribute their expertise to the creation of cinematic virtual reality.

This in turn could create a powerful West Coast VR production corridor, with Seattle serving as the linchpin between LA and Vancouver, with vital contributions from San Francisco and Portland. Again, a significant portion of the revenue generated from these incentives in the form of jobs and other taxes would remain in Washington State.

Now is the time to make key structural decisions about this industry that will foster innovation and engender a robust new creative economy, contribute to the prosperity of the Puget Sound region, and establish Seattle as the world’s center for VR and AR content production.


Next Steps

This is just one exploratory editorial about how to ignite a new creative industry in Washington State. I recognize that there is a lot I still don’t understand about the tax incentive process. My hope is that film professionals and the VR/AR community weigh in to offer constructive ideas. I especially welcome critical feedback.

If I’ve made a convincing argument and others agree that such a campaign would be worth pursuing, we would need involvement and investment from the private sector, state government, and local film industry, especially those at Washington Filmworks whose experience with this process would be absolutely vital to such a campaign’s success.

I recognize that what I’ve outlined may require Seattle’s film community to shift its thinking away from tax incentives for film production. Rather than considering this an abandonment of those efforts, I’d offer that a VR incentive program builds upon them.

I intend to continue writing about this subject, and would love to hear from members of the VR/AR industry, film professionals, and state government representatives. The only way for a campaign such as this to succeed is for there to be broad and passionate buy-in from as many people as possible. This has to be an industry-wide effort, designed to create opportunities for all.