Thursday, October 25, 2007

Budgeting VFX

Budgeting VFX

I covered some of the basics of this in the post/podcast Bidding and Preproduction
I’ll be going into more detail in this posting.

As previously discussed budgeting visual effects can be very difficult. You have the possible issues of developing new looks and techniques. How long will this take and how many people? Add to this mix the director’s creative changes that happen on any film project. Should you calculate 2 takes? 5 takes?

I’ll be discussing feature films here. Budgeting is somewhat the same for television or commercials with a few key differences. Television shows may have a small permanent staff (or at least an assigned vfx company) if they’re vfx heavy. They also tend to have very little time or budget. There’s usually no time for storyboards in television. In many cases they’re told what has been budgeted for the effects and have to work within that. On a commercial much of the final work may be done on a Flame™ or similar system. These are expensive high-end systems where the client sits in the room and guides the artists to achieve the effect they want. Note that feature films use Flames and other equipment as needed where the vfx supervisor is the client. For high-end 3D work it may go through a similar pipeline as a feature film but with a smaller team. The budget and post time for visual effects on a commercial can be much higher on a per second basis than a feature film since a commercial is only 30-60 seconds in length. Commercials have detailed storyboards and may have previs because they use it as a selling tool to the final client. Both commercials and television used to be primarily done at standard television resolution (which made it a bit faster and easier than feature films) but with the advent of High Definition they’re now done at resolution at or close to film resolution.

The average Hollywood feature film is now approximately $100 million. A VFX film can run even higher. For a ‘visual effects’ feature film the vfx budget can be 1/5 to ½ of the total film budget so it’s critical to get the budget done correctly.

Why are visual effects so expensive? VFX are very time and labor intensive. A large project may take 200 people to work on over the course of several months or a year.

The first step in the process is someone at the studio plugs in a guestimate for the VFX. Years ago a producer with minimal vfx experience might pencil in a budget that was an order of magnitude off. These days most of the large studios have a VFX head in charge of budgeting and assigning the work.

Initially the script is broken down by the VFX producer on the film (likely with a supervisor involved) or it may be done by a VFX company’s producer and supervisor. A rough count of the number of estimated vfx shots is created based on the script text only. Note that even if production has done scene numbering these don’t break down into the specific shots, which is what’s required to budget the vfx. Shots may be designated as hard, medium and easy to allow setting an approximate cost for each shot or as a quicker process an average cost may be assigned to all shots. A studio film usually has an average shot cost in the $10,000-60,000 range. Low budget projects may have $1000 or less per shot.

These ballpark estimates are submitted to the studio to evaluate. The VFX company may meet with the director and the team to refine the bid further by dropping potential vfx shots that they expect to do with stunts or clarifying some of the planned shots.

During the pre-production phase the director works with artists to create storyboards and/or previs animation. These resources will be used to create more accurate bids. The production or studio VFX head will submit a package to any VFX companies bidding on the work along with parameters. Parameters might include average length of shot (typically 5-8 seconds), handles (4-16 frames on each end of the editor’s cut shot to allow some adjustment), delivery dates, delivery formats (film, digital, both), temp screening dates, etc. Each shot may also include specifics or assumptions. Due to times constraints sequence bids may be worked on as soon as storyboards for that sequence are done.

In some cases the studio employs a company or multiple companies to do some concept work and/or some R&D. The studio may require this before proceeding to the next level and to make sure the look and approach is what they want.

With storyboards and information in hand the visual effects supervisor determines the best methodology. He/she works with the vfx producer and the team (lead compositor, lead TD, CG supervisor, etc) to review the approach. If it’s an animation heavy production there’s likely an animation supervisor as well. Each shot is then broken down into detail regarding the amount of time required for each task. Ideally this involves all key personnel but could also be done by the producer and supervisor if they feel they have an accurate idea.

The animation supervisor may review the shot and determine it will take 8 days for an animator. The CG supervisor may think it will take 5 days for a technical director (TD) to light the scene and work out the look. Estimates are made for composting, rotoscoping, paint work, specialized modeling, matte painting, simulations, dirt removal, etc. Each of these goes into an Excel spreadsheet the vfx producer has. Modeling (CG or practical) is budgeted (and required texture maps or paint work) along with R&D. When you’re doing hundreds of shots this process can take days.

All of these estimates are based on actual experience and gut feelings. The complexity and difficulty of the shot is taken into account. A company that’s been operating for some time should have averages from other shows to refer to (although they seldom do refer to them). Of course all of these estimates have to take into account some changes and doing multiple takes. Some companies bid the lowest possible number (as if everything were perfect and there would be no changes) to get the show and then force production to have change orders for every change, big or small. This just creates a very awkward and painful process for all involved. It’s always best to consider some time for reasonable adjustments or changes. If the VFX team has worked with a director or given studio before they make some adjustments to the estimates based on number of changes on the last production.

The biggest danger in creating the estimates is being too optimistic. Your first impulse is to say that it can’t possibly take that long to do that shot. It’s just a simple blue screen, etc. This is especially true since the person making the estimates is likely an expert and can do the shot quickly. The reality is there are no simple shots, the original plates won’t be as good as you’d hope, there will be changes, etc. You also have to take into account the average person working in that position at that company. The range of quality and speed between employees can be vast. One person might be able to do something in a day and another will take a week.

In some cases the vfx producer and supervisor may modify or pad the budgeted shot. This can be tricky and is best to be discussed at the time of the group budgeting. If the producer feels a certain task is under bid then that should be brought up. The danger is if the estimates are modified after the fact then the person who provided the initial bid may be held responsible for it, even though it was changed for more or less afterwards. If you’re bidding a show I suggest always keeping your own notes if there a discrepancy months down the road. The other issue is if the producer pads the bid and the people originally providing the estimate are padding their estimates you end up with a double padded bid. This may mean you lose the project.

When planning a show the producer and supervisor try to cast the show much as a director casts actors. Who are the best people available for the different tasks and different leads? Is there an animator that would be perfect for a specific character or a modeler that is great at the organic modeling required? Unfortunately schedules and any other shows may prevent the flexibility of having a choice in all of this. It’s not unusually for modelers to be tied up on another company project. This delay in getting the models started ripples through the entire production causing more overtime. All of this needs to be taken into account internally at the company.

The vfx producer calculates the cost of the shot based on the time estimates and the average cost for that type of person at that company. That rate will likely include not only the employee’s salary but also their related expenses such as health insurance and pension. Note that most vfx artist work more than 8 hour days so the overtime has to be taken into account for the estimated. Some companies include in these time estimates the entire overhead and profit margin. In some cases they may fold in the R&D costs or the model costs. If a 10 shot sequence has a $100,000 model budget then they will add $10,000 to each shot in the sequence.

The cleanest and best process though is to keep these costs separate. If you include a lot of extra costs in the time budget then things get very wacky as changes are made. In the example above if the 10 shot sequence is cut down to 1 shot then you only have 1/10 the model costs. If the sequence is dropped before it’s started but after the model is built then you have to find out how you can cover the price of the model somewhere else. If a 100 shots are added that doesn’t necessarily mean all your overhead goes up dramatically. Likewise if production requires a lot of overtime work at the end of the production then those calculations will be out of line.

Overhead includes all the labor and materials not directly related to a shot or that can specially broken down into shots. The basic staff of production assistants, coordinators, vfx producer, vfx supervisor, etc. are all part of the overhead. The cost of the computers, software, sales people, human resources etc. need to be included as well. The time the vfx artist spend in meetings or general prepping (getting the pipeline worked out) also fall under this category. The amount of down time when the company keeps people on payroll without a project has to be incorporated as well.

An estimate is also calculated for plate photography which will have a vfx supervisor and possibly a small team of matchmovers or coordinators.

A percentage will be added to the project to cover profits. Contrary to studio belief the markup for visual effects is not astronomical. (i.e. not as much as most retail)

If you’re a freelancer or a new, small shop, try to do the work on a time and materials basis if possible. You’ll have to provide a basic estimate but if the director or the vfx company that’s contracting you changes anything you won’t be forced to cover the change costs yourself. First time freelancers make the mistake of charging what they were being paid working for another company. The problem is none of their overhead is included such as health insurance, computer and software expenses. You’re also assuming you’ll be working full time which won’t be the case for most freelancers.

The vfx producer has to lay out the linear time required to do the work. If you have 15 TD’s and it will take 20 weeks of work but production only has 12 weeks of post then there has to be some adjustment. Either more people need to be brought on, more overtime is added in or the number of shots the company can do must be limited. As mentioned if there are other productions at the company the resource allocation (for both people and computers) can be a real problem if a production adds or drops a 100 or 200 shots on a project (not that unusual unfortunately).

Visual Effects are usually feast or famine. Either there are too many projects and a company will have to turn down work or there’s not enough work and the company has to do what they can to get the project. In some cases the company may choose to bid the project at their cost (no profit) or even as a loss. The smarter companies know that if they have to lay people off it will cost them a lot to rehire people and bring them up to speed with their internal systems.

In the end the vfx company provides a cost for each shot (not broken into each task) along with an overhead budget, model budget and R&D budget. Any assumptions the bidding team made should be spelled out clearly for each sequence and each shot. (The car will be a stunt car, the fire will be provided by the onset special effects crew, etc) In commercials there are standardized bidding forms but there’s no standard in visual effects for features. The studio will likely add up all the costs and divide by the number of shots to get an average shot cost. They can use this as a rough comparison with other bids as well as to help ballpark additions or deletions of shots. Of course the studio is likely to ask the vfx company to sharpen their pencils and provide ‘better’ numbers and they may ask the director to cut shots or elimatinate a sequence based on budget considerations.

Do not be surprised if you’re asked to do this process a dozen times by the studio. Storyboards and concepts change which require a re-bid. Bidding occupies a large amount of the pre-production time.

Multiple vfx companies bid on the work. The vfx producer for the show may choose specific companies to bid on specific sequences. If a company has a specialty (such as matte painting) they may only bid on those shots. The studio may have a list of companies they’re willing to work with that the vfx producer has to use.

After the bidding has settled down the studio will award the show to a company or companies. In some cases the studio makes the decision based purely on cost and in other cases the cost only plays a small role in the selection. The quality of work, past experiences of the studio and the ability to accommodate many more shots are all taken into account.

At this point the studio and the companies work out their contracts. In some cases the contracts may not be official until the end of production but of course the best approach is to get it locked into before production. Note that the contract may lock in a specific bid even though additional changes and storyboards arrive after that time. It’s critical to have an experienced entertainment lawyer review the contract since the studios have teams of lawyers who specialize in this. You need to make sure everyone is on the same page with regard to the assumptions and delivery schedules. You also need to be clear about the payment schedule. Some are done by weekly allotment and others are done when hitting milestones (per shot or by major sequences)

During production the supervisor and producer flag the studio when changes or additions are made that might affect the budget. Note that the movie release date will not change so the only way to handle additions is to add more people, more overtime or additional companies.

Once the film is shot and there is a rough edit that can be turned over, the vfx company will likely review the bid and compare it to what they actually have in hand. Quite a few things can change from the plan to the final result and this is a final reality check before the work begins.

Hand in hand with the budget is the schedule. A preliminary schedule is made when the budgets are done. There is usually a schedule for turnovers. This is where production (director and editor) gives an edited sequence to the vfx company. If the turnovers happen later than planned (a frequent occurrence) then the entire schedule and budget may be affected. Time is money as they say. Also the finals date (when all shots are supposed to be done) may vary a bit but it’s very unusual for a release date for a movie to change. If it does change, it may be for the worse (i.e. earlier)

In scheduling the work each step of the process is taken into account. The vfx editor will have to provide negative numbers, the film needs to be scanned, then the matchmoving (or layout) will need to be done. Next the animator starts, then the TD and then the compositor. These last three overlap a lot or a little depending on the shot and pipeline. Most people are working on 2 or 3 shots at a time. Even though a shot may be budgeted as 2 weeks it may take 3 or 4 weeks to complete since there will down time while waiting for feedback from the director or while other changes are made. In some cases a shot may have to be put on hold for a month or more while a change is made or until additional elements are shot.

Ideally each task for each shot is tracked either by timecards or by a database. If they’re not tracked it becomes difficult to determine how much progress is being made relative to the schedule and budget since linear time and budgeted time are different. If the work isn’t monitored you may not realize how over budget or over schedule you are until the last phase of the show when it’s too late.

The poorest process is for the vfx producer to say we’re $5000 over budget on a specific shot or to dump an inch thick document of raw figures on the desk of the supervisor. At that point the shot is already in the red and you’ll have to spend time figuring out what that amount means (which task is causing the problem, is the dollar amount with markup, etc). The best process is to monitor the shots and flag them as they reach critical stages (50% done on a task, shot to be completed that week, etc). As an example: If the composite time is already 75% used up and there’s a lot more work to be done then the supervisor may want to review the shot with the compositor and determine if there’s anything that could be done to simplify or complete the work in the budgeted time. There may be another 200 similar shots yet to do so if there’s a major flaw in the approach then it should be modified or discussed with production.

Dailies are held everyday to review the work in progress. The team creates weekly targets for which shots should be completed. These are reviewed and frequently adjustments have to be made. A shot that was scheduled to finish that week has to be pushed to the following week because the director kicked it back or because there were larger problems than planned. As production nears the finals date the weekly reviews become daily reviews. Don’t wait until the last minute to alert the film production company if there are scheduling issues.

If there is a crunch time at the end of production then the costs will start to skyrocket with overtime and other rush charges.

Related posts
Getting the most out of your VFX Budget
VFX Wages
Why do Visual Effects cost so much?

Related books (In the VES Handbook I cover budgeting similar to this site)


6 comments:

  1. Brilliant timing for this post. We're budgeting work for the first feature we've been awarded. Thank you Scott!

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  2. Thank you from France !!!
    Your Blog is so great !

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  3. Hi, Scott:

    It seems that this post is cut off at the end. May we be missing something or it's just a missprint?

    Anyway, great post. Budgeting is such a mistery sometimes...

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  4. Very very brilliant...
    nice posting...
    it really helped me a lot to give a budget for my client...

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  5. very very brilliant posting...
    For the first time i'm budgeting a feature film's vfx... and u really helped me a lot....

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  6. Hi Scott,

    This is one the best articles I have ever read about budgeting for VFX. Thanks for putting in the time to add all of the details. I do agree with the other poster about the abrupt ending, it seems to be missing a conclusion. Is there a link or another page that contains the end of this article? With all of the studio closings and downsizing going on in this industry, this is an extremely relevant and timely article. I work for a boutique style VFX studio in Montreal that specializes in the advertising industry called Boogie Studio. We have been feeling the pinch here in Canada as well, many studios have not been able to keep up and have been put out of business, for either not having a strong pipeline or having far too many change orders attached to their projects that were not billed for.

    I especially love the line in your article that says “The quality of work, past experiences of the studio and the ability to accommodate many more shots are all taken into account” I hope this becomes a more prevalent way of finding a studio or studios to do the work.

    Thanks….Keep up the great work

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