Beyond Hollywood: Building Regional Film Economies in the AI Age

C&C Interview Ramsay final.mp3

John Gauntt [00:00:06] This is Culture and Code, a podcast about creativity and artificial intelligence. I’m John Gauntt. Culture & Code explores innovation across storytelling, technology and audiences to help professional creators collaborate better with AI and each other. Support this podcast by subscribing to our newsletter. Visit our website, Culture and code.io. This show is a conversation with Ramsay Wharton, who is a program manager at Arizona Film and Digital Media, which is part of the Arizona Commerce Authority. And we’re meeting in Glendale, Arizona, during the AIFilm3 film festival, of which Culture and Code is showing a movie on Saturday called Ozymandias 2500.

Ramsay Wharton [00:00:51] Fantastic.

John Gauntt [00:00:52] Why don’t we start with a bit of what your current duties are and what got you here?

Ramsay Wharton [00:00:57] Well, sure. So Arizona film and digital media basically serves the state of Arizona as its state film commission as a program of the Commerce Authority. Our job is basically to market the state as a film and television destination. And then once those productions come here, we assist them and we facilitate those projects being completed and in doing so, work to build the industry out. That’s everywhere from the crew and the talent to and the the businesses that are here to support those projects. And basically, I implement the vision of what we are doing as day to day kind of operations supporting all of our databases. We maintain large location databases, production directories of all size and sort of talent here, crew and all those businesses I spoke about. So we’re very much involved in what’s happening in the film activity side, and that means the marketing that takes place for a lot of these film festivals.

John Gauntt [00:01:58] One question that I have about just the film in in general from an economic development point of view and let’s assume a great story. From an economic development point of view. What is it about film in particular that is super attractive to government commerce authorities like the one you work for?

Ramsay Wharton [00:02:19] Well, when a production comes in, they have a very large impact across generally multiple industries. For example, you don’t have to be a big city that’s only going to be eligible for maybe a warehouse for a distribution center or something like that. But when you have beauty around you, when a film project wants to come in and film in your community, they’re going to tap, you know, hundreds of hotel rooms, rental cars. They might hit your local construction companies, your hardware stores, retail venues, restaurants. There’s a lot of sectors that get tapped. When a production comes to town and that means that’s really essentially low hanging fruit for a lot of communities because those dollars get spent right away and residual impacts. So. And local hires, maybe you’re collaborating in a region where and we see this in some of our smaller communities where they might share resources. So all the hotel rooms are taken in this little town here and they don’t have enough of X, Y and Z tables and chairs to accommodate something else. And they’re going to pull in assets from their nearby community. And so now we have support happening across these areas and especially in certain regions in particular, Southern Arizona has really been at the forefront of some of our historic film activity that’s taken place. And we’re we’re talking about the Tucson area and all of that southern area region. And then, of course, in the beautiful parts of like Sedona and Flagstaff and going North and Navajo Nation and some of those really grand areas of Grand Canyon as well that a lot of productions have sought after. So. Those are the areas of Arizona that really get highlighted. Tumbleweeds and deserts. But that’s the surprise to many productions when they come here. That’s not all we are. We have these beautiful pine trees and places and water and Lake Havasu and beautiful areas in Yuma. And it’s not always what you think, right? Snow capped mountains up in Flagstaff. So we really love to tout our diversity, and that’s very attractive to our smaller communities where a lot of economic impact can be felt very easily when hotel rooms are booked out and they might do more business than they’ve done all season with one big project that comes in.

John Gauntt [00:04:51] With every filming territory, whether it is Arizona or Georgia, California, etc., there are there is a set of endowments, let’s just say that. So Arizona is an embarrassment of riches when it comes time for natural endowments. What are the nuts and bolts that film commissions use in terms of like policy instruments and things like that to help attract those those productions above and beyond the fact that you have incredible natural scenery that’s going to be wonderful on film.

Ramsay Wharton [00:05:21] Sure. Well, there’s a couple of things that are in place. One of the most significant things is and they are also very controversial, our film incentives, right? Tax credits and governments will put in place incentives that will help attract productions, usually transferrable tax credits or something like what we have, which is a direct tax credit. Now, something new that we haven’t had in in quite a while, but that just went into effect last year in 2023. But the benefit of, let’s say, a percentage back on your spend, for example. So that’s very competitive in this industry where productions literally are running numbers, states against states based on travel. Right. So what’s that spend the percentage back? How many dollars are available. This type of business activity there do is strict comparison. But oftentimes in addition to the locations, there are other considerations, for example, that Arizona is very attractive in. And it’s a proximity to California where you have a lot of let’s say you have a lot of talent that’s very high end, you know, very expensive A-list talent, and they don’t want to be on the other side of the country filming in Georgia, let’s say. Right. They want to be home for the weekend where we can do same day travel. We can haul out equipment in the same day, work day. We can fly them home on the weekend. They’ll be right back in L.A. after they they wrap on Friday. So there’s a lot of convenience factors that depending on what type of project you’re doing, may calculate at a higher value level than, let’s say, the hard dollar amount on a strict straight incentive. The other things that matter to communities are permitting fees, government or here, we’re still fortunate enough to have communities that have little to no permitting fees. In fact, the state of Arizona has negotiated discounts and benefits. Where we waive the state has waive the application permit application fee for filming on state roads and highways and even in our state parks. So that’s a big bonus to them. So when you add on value like that or low permitting fees, it all adds up to savings. One of the additional areas that we’ve had, and this was before the the film tax credit, the governmental tax credit was implemented, was we have a vendor program, a direct discount. It’s a private sector, quasi public, because the state we consider the discounts from the state also in there. But vendors can provide anywhere from a minimum 10% or more, up to 30% on their goods and services. And so you’re listed in our in our directory. So when the productions come in, they’re like, Hey, we want to save some money. Here’s our hotel vendors who are going to offer you deals. Here’s our equipment vendors that are going to give you a rebate. So each, each type of industry gets to choose what it wants to provide, and it’s direct with the vendor. So it’s it there’s no paperwork for on our side. It’s basically those vendors get listed and on and say, I’m going to provide this discount to the project.

John Gauntt [00:08:39] Okay, well if that is on the film side or film and television television series. But I also saw that you are working in the digital media space. Can you unpack more about how you’re differentiating between digital media type of projects and your film and television?

Ramsay Wharton [00:08:59] Well, since film has gone digital, a lot of the the verbiage under that umbrella of digital media can really. Be broad and encompassing, right? So in the course of the evolution of what we support, let’s say from a production standpoint, we might get YouTubers out here, we might get some other type of creative project industrial projects from a a business that might be putting together a creative piece, something internal or or whatnot. There could be any number of reasons why somebody might need our assistance, usually for finding locations or issuing permits, write somebody on some land they want to film X, Y and Z there. And so we’re going to step in and kind of connect them, tell them who owns that property. But the digital media, when it comes to, let’s say, game development, which has something new over the course of the last couple of years here in Arizona, we’re seeing communities that are really interested in driving a lot of that conversation. In the Mesa Glendale area, the metaverse has become a topic of who where are the talented people that are doing the work there, what industries do they fall in? And what we’ve seen collectively over over probably almost a decade now is game development growing in the movie television where games are being made into movies and TV shows and TV shows are being made into games or films are being made into into games. And so we’ve had the fortunate opportunity to meet with some local groups, people that are interested in setting up game development incubators. We now have an AR VR association out here. That’s the augmented reality. And virtual reality might be VR. I can’t recall, but the idea is that we’re identifying workforce assets here in the area who are engaged in that. Now. We spoke about creative talents earlier, marketing agencies, the creatives that are at the forefront of the use of this type of technology. Of course, the AI aspect just now creeping out into sort of the everyday world outside of sort of the realm that you’ve been dealing with, right? It’s leaked and it’s getting out. And I and that’s a great thing. Of course, this industry has been hesitant, right? Any new technology, any time we start evolving technology, every industry goes through the pain of what job? What does that mean for jobs? What jobs are we losing? Does that mean we’re no longer going to have real people doing this work or we’re going to have this? So there’s this evolution that’s taking place, and it’s really an educational process of understanding the applications, where the growth is going to be and how it might change the industry. So, for example, our director has been speaking with people about the look of soundstages. Right now, doesn’t have maybe a lot of this server space and where you might now walk in and see editing bays all over and people that are doing AI generation, it may be a very different look in the next 5-10 years physically infrastructure wise, what we what might evolve out of AI’s evolution in terms of this specific industry use. So I think one of the things that we’re curious about is to engage the people that are working in this space to look at the films, what’s being made. What what are the submissions to the A.I. Film Festival? Who are the panelists? What are they speaking about? What can we glean and learn about this technology being used in the industry and across multiple sectors? So for digital media, this could be a space that grows. For example, in our directory of crew, we now have spaces I, I create positions where you might be in game development and come in. You might be a producer, you might be a a code person who’s right. So maybe the jobs of the future. I’m adding different positions to fill that need. So I’m not as up to date on the different positions that might evolve, but that’s all left to be seen. So somebody might call me, you might call me up and be like, Hey, I live and work here and this is the work I do. Can you I want to get in your directory. And we might be like, Yes, of course.

John Gauntt [00:13:27] So your your office is also under the broader umbrella of the Arizona Commerce Department. So what’s been your kind of education of taking the signals that they’re giving you about what are some statewide initiatives, incentives and things they want to accomplish and channeling it through your office? And then how are you flowing the other way to tell them, hey, you need to start putting an eye on game developers, people working at AI film festivals. What’s been that communication process?

Ramsay Wharton [00:14:01] Well, I think there’s a little overlap. So we also have an innovation team that is part of the Commerce Authority. So there’s an aspect of startups excuse me, of. Incubators and accelerator programs that are sort of happening in various sectors, but in particular in the innovation sector, where some of these new technologies, whether it’s in bio sciences or mechan, you know, automated vehicles or something, is being utilized. So there’s there already is a separate focus on just the innovation sector. And so there’s a overlap between our department kind of saying to them, Hey, this is going on. Trying to stay on top of what’s happening across other sectors and then sharing that dialog with this sector. So as soon as we were getting approached by, for example, the RV association, that was the opportunity to say, hey, we really need to look at what what services, resources that we’re providing to specifically that sector right now that we can under the Commerce Authority, under our film office, so to speak, so that those individuals could at least get be seen right in case there was a project that came. But it’s mostly collaboration right now. There’s not a lot of direct A.I. vendors that we’re associating with at this point. That could change. But as far as you know, our economic development engine is focused on all sectors matter, all sectors, tracking technology. We’re at the heart of that, the Arizona Commerce Authority. And it was semiconductors, aerospace and defense. I mean, everywhere you look, this state is booming with companies that are interested in coming here and doing business because they know that this is a great state to be in, live and work in. And we’re excited about what that future looks like for this particular technology.

John Gauntt [00:16:17] So when you are specifically on site here for AIFilm3, what are some of the things that you’re looking for? I know that we’re still kind of early in the in the conference. There’s going to be plenty more films. There’s functions that are happening tonight. But when you came on site, what were some of the things that you want that you felt you wanted to learn?

Ramsay Wharton [00:16:39] Well, we’re very much interested in. Who’s using the technology and how it’s being used. What does it mean in a production from a production standpoint? In other words, how many hours, how many jobs are being hired? What does that look like in a space? How are you implementing that film? Where is it going? How are you distributing? Where’s the content living? What’s the future capacity for that tech in this space for films? I’m interested in finding out who are the people that are in the industry, Some of the panelists who’s here speaking. I know that. For us, this is really the first time we’ve seen something like this. But I know a lot of people are dabbling and we are in a lot of creatives. I mean, we have directors of photography and and people that are, you know, have been on Dall-e and been looking at all different types of things and how quickly they can create something in a heartbeat. And I wonder and this might be something more for you and your listeners. You know, the pendulum swinging always happens across evolution in technology. And, you know, we had filmmakers when they were on film and then they everybody swung to digital. And then you have this whole doubt of these great directors and people. They’re like, No, we want to shoot on film. And I wonder at what point, you know, where we see some of this creative going one way with technology. And then they swing back and they’re like, No, we want to we want to go back to on location. We don’t want to generate that backdrop or or do those fight scenes with all that CGI. You know, we want to do something again, back to the basics.

John Gauntt [00:18:39] It’s almost like a difference between, you know, the mass mass market food and organic food and what they want. There’s there’s directors say we’re going to have the artisanal organic section of content over here. So we’ve been talking about film projects and TV projects and digital media projects with sort of this assumption of they’re pretty big productions. They’re going to come here and decamp. But if you take a look at AI this whole promise is a small team with a big impact. So, you know, without talking policy or something, can you envision a future where there could be a set of incentives to where I say, hey, I want to bring a crew of 12 here for ten days? And we’re going to be making a series of shows. How do you see this? Kind of like Mike almost Micro Productions.

Ramsay Wharton [00:19:31] Well, the current Arizona Motion Picture production program, which is the name of the film tax credit that exists right now, there’s no minimum spend on that. There are certain guidelines. It’s tiered. So anything under 10 million, the base percentage back would be 15% on qualified production expenses. So if you brought your crew out here, you were paying through. And again, this is about expenses that are taxable and incurred in Arizona. So depending on what that spend would look like, what facility you might be. You know, if you’re coming into the state and then you’re utilizing a facility or you’re building a facility if you own it here. So it’s going to depend on the receipts that you have, the approved spend and ultimately getting a piece of that back for you. But that’s already available to you right now. So you could easily come in depending on the type of project that you’re doing. So features TV commercials, music videos, those are ideally right now under this incentive, the primary ones. There are certain types of projects that are not eligible for this particular tax incentive.

John Gauntt [00:20:47] What would be an example? Non-qualifying project.

Ramsay Wharton [00:20:51] If my memory serves me correct? There are some live sporting events, things like that that aren’t or certain types of industrial training videos and things like that that don’t qualify under this incentive. So there is there are a few things, but your primary. So if you’re doing a feature or a television show or something like that, that that would be covered. Generally speaking.

John Gauntt [00:21:19] The one question that I have, especially as AI enables us to be able to create more content on the fly, is you said that live sporting events and some types of event, other certain types, they they wouldn’t qualify for this event. But do you foresee a time where almost like live digital theater, where there’s a back channel of people who are interacting with a property in real time? If you go into the e-sports world or places like Twitch, it’s not that you’re there to see shows.

Ramsay Wharton [00:21:50] Right?

John Gauntt [00:21:51] You’re engaging, you’re engaged, you’re engaging in the experience, and it’s just being fueled by content.

Ramsay Wharton [00:21:56] Well, that would be all about what the community and their lawmakers wanted to see happen. And so, you know, the legislature and the citizens of each of our cities, towns and communities would have that input into crafting whatever that legislation would look like. Is it possible, of course, that that somebody might in the future decide that they want to see that type of production covered? Right now it’s it’s it’s not. However, for example, if. Taylor Swift is on stage doing a performance right. And she’s the concert itself isn’t a covered production, right? Like stage like in New York, like theater is. But if you’re going to shoot a film about it, as they did, and that was to be produced and then aired on Netflix or or Prime Video or something like that, obviously that would. So there are some ways if you’re making a movie about something like that, that would be a different type of production that would be more qualified than not qualifying. If that makes sense to you.

John Gauntt [00:23:15] Make that make sparks up.

Ramsay Wharton [00:23:16] So you can make a movie essentially about anything.

John Gauntt [00:23:19] Now, now, question and question for you. More on the individual side. Are you using A.I. tools now to be, you know, kind of usual?

Ramsay Wharton [00:23:27] So the Arizona Commerce Authority, like many state organizations, are having those discussions about from the governmental level what that technology can do. Yes. There have been meetings about how do we use it properly. A lot of it is like many place, it’s about security. It’s about figuring out the shared knowledge. What what are we putting in? What are we getting out? So I think those discussions are happening in i.t. At higher levels and mine about what we’re utilizing are from a personal standpoint. Absolutely. I have been looking at different things. In fact, i was just i’m with my child who’s in college right now and she said something. She was having a difficulty with some accounting math problem. And I said, Honey, why don’t you just go on to, like, you know, math GPT or whatever and try to run this through? And she said, Well, I know. I don’t know. I’m not really doing it. And I think that she’s pretty at the forefront. She said, Well, I think that kind of defeats I’m supposed to be struggling with that. I said, Listen, part of using technology, if you’re able to get the answer and they can show you how to do it, that’s the learning part because it’s another way to be taught something, not just plug in the information and get an answer at the end, but it actually will walk you through it or show you the process and the steps. That’s how advanced it is. It’s literally, you know, coalescing all that data and information. And so it was kind of a funny conversation that I’m bringing this up to my my child. But she hadn’t yet quite fully tapped into it. And I think that’s probably because a lot of people are concerned about what it’s being trained on. You know, it the accuracy of it. We’re still in these sort of early phases of. You know, a consumer implementation. And if how sensitive what I want to put in, if I’m giving something away that I don’t want, Right. So I better have the paid version, not the free version or or however the entities are rolling various programs out. Right. Because that’s part of it. Right?

John Gauntt [00:25:38] Going forward. It does seem that, number one, we are moving our interactive world to a far more visual bias. But kids in high school are using YouTube and Tik Tok too, rather than Google to research how to do something. They’re wanting to see videos. And so in a similar way that early Internet went through this cycle to where writers like myself were like, my God, am I going to have a job? Is it going to change my job? Yeah, on both sides. But then so many more people found that writing became an important part of their job. Do you foresee that as we get more productions and more professional, I guess, visual storytellers working in this state that is actually going to move into sections of the economy you never even thought about to where? I’m making a film and I’m working for an accounting firm. But that’s how we never got to communicate our build our our business proposition now.

Ramsay Wharton [00:26:45] I actually think we’re already there either. I think from a media sector, every business that needs or wants to be successful is already making videos, putting together news agencies are doing it. And now, I mean, they were one of the early ones that started to put kind of graphics and media and words together. And now I believe if you want to be at the forefront of whatever sector you’re working in, whether it’s accounting and professional services to your roofing, plumbing, you’re up on the roof, you’re doing a drone shot of your guys working on a on top of that roof, you’re showing your warehouse, you’re you’re doing videos and instructional. Your CEO is on a YouTube channel showing everyday household and why you should be using their services. I mean, I think this has we have been watching this evolve and it’s been more about the the young business entrepreneurs that are coming up are much more savvy about it. You know, obviously the the older generations that’s there, you know, you’ve been dad owning the business for a while now, your son saying, hey, dad, we want to get you on some of these videos. But I really love, love, love the fact that we are such a creative people. Humanity is visual humanity. We’re so creative. And for all the pluses and minuses that we balance out when we watch social media is when you watch regular, everyday people in their homes doing some of the most. Funny and otherwise benign things and you get a smile or a joy or laughter or some inspiration or motivation for your day. I find that so refreshing that so many people that. Without it, we would never know their creative side. But you give them. A Reel or any anything that on Tik Tok and there they’re making something or laughing with their husband or showing somebody some dance move a grandma and grandpa doing something dancing you know whatever. We would never normally see that. Millions of people. And I really love to see it. I think that that says a lot to who we are as a people. I personally, again, this is just a personal side, but I think that’s where we come together to value and appreciate the beauty of of humanity because we have so much goodness out there. And sometimes especially when when there is a season of politics and and divisiveness that we have to go back to at the very core. Genuinely, we are good loving people. So it’s creativity brings that out.

John Gauntt [00:29:36] So first, is there anything that I didn’t quite cover that we wanted to bring out as a nugget about specifically towards AI films?

Ramsay Wharton [00:29:48] No, I think we’re just very interested in and seeing what how this is going to evolve in in this industry. So I’m anxious to watch your productions. I’m anxious to see what that distribution model looks like for people that are doing this type of work. How are they earning money? Is there growth in that? What does that business model look like for people? Is it translatable to some of the people that are working right now in our industry who might want to learn something more? And then from the business side, what type of entities might be looking to set up shop here to grow that? So whether it’s a render farm or some type of post facility that’s more engaged in that type of technology use or something that’s a hybrid of a game development and post in one. I mean, really, that’s what we’re out to look at, is how do we grow the industry? What does it look like?

John Gauntt [00:30:47] Okay, So Ramsay Wharton, thank you so much for speaking with the Culture and Code podcast.

Ramsay Wharton [00:30:51] Thank you so much and thank you for all the work you’re doing to help energize and motivate people to use their creativity as much as they can.

John Gauntt [00:31:04] You’ve been listening to the Culture and Code podcast, Creativity and Artificial intelligence. You can find us on all major podcasting platforms and our website, culture and code.io That’s one word. Culture and code.io to support this podcast. Subscribe to our email newsletter for a weekly round up of analysis news plus AI training and growth opportunities for creative professionals. It’s all there at culture and code. IO Culture and Code is a creative studio and professional education provider that’s part of the Augmented City LLC. I’m John Gauntt. Inviting you to the next episode of the Culture and Code Podcast. Thanks for listening.