A little under two years ago South Australian Premier Jay Weatherill warned his state was in danger of becoming the country's rust belt. Now, SA has struck a major blow in its bid to become a leader in the worldwide digital entertainment economy.
On Tuesday, the South Australian government announced it had lured the French giant Technicolor to set up shop with an Adelaide outpost of its Mill Film business, to deliver post-production and special effects services to the global film and television industry.
The South Australian government has promised to kick in $6 million towards the cost of establishing the $26 million VFX studio, which is expected to house up to 500 workers when it reaches full capacity in about five years.
The news follows the announcement last December that the Weatherill government would offer a 10 per cent rebate to any foreign productions doing post-production, digital and visual effects (PDV) work in the state.
That incentive, which came into effect on January 1, is on top of the federal government's 30 per cent rebate for PDV work, meaning foreign productions doing post-production work here can get a 40 per cent discount if they do it in Adelaide.
That makes the city as financially attractive as just about anywhere on the planet, while a plethora of other lifestyle incentives not readily matched by the likes of Bangalore and Shanghai might just give it a real competitive edge.
The PDV sector employs roughly 2500 people, more than half of them in New South Wales. It is worth more than $400 million a year in Australia, with $252 million of that being spent on drama (television program promos and advertising account for most of the rest). PDV-only work accounted for about $123 million, the vast majority of it from high-profile Hollywood productions.
Technicolor's arrival could vastly increase the flow of work from Hollywood. It is one of the biggest players in the global post-production industry, employing more than 15,000 people across its operations in France, Canada, the UK, the US, India and China.
Its recent credits in the increasingly crucial VFX sector include The Shape of Water and Blade Runner 2049 (both of which have been nominated for Oscars in the visual effects category), Wonder Woman and Pirates of the Caribbean: Dead Men Tale No Tales.
The company's decision to set up shop in Adelaide is a major coup for the city, which is already home to Rising Sun Pictures, whose credits include Logan, Thor: Ragnarok, Gravity and the X-Men films. South Australia currently ranks behind NSW, Victoria and Queensland in terms of the size of its PDV industry, but not for much longer.
What it means for the local industry's other players – which include Melbourne and Sydney-based Iloura (Game of Thrones, Ghost in the Shell), Melbourne's Luma (Black Panther), Sydney's Animal Logic (the Lego movies, Peter Rabbit) and Brisbane's Cutting Edge (Hacksaw Ridge, Swinging Safari) – remains to be seen.
Film Victoria CEO Caroline Pitcher insisted her state had nothing to fear from the growth of the sector in South Australia, because it had been running an incentive scheme of its own to attract PDV work for the past decade.
"This is tremendous news for the Australian screen industry," she said. "It's an expanding sector internationally and we are best served by all the states working together. If we have a great reputation as an industry it's going to serve all the states well."