Friday, June 17, 2011

Using the nail

Using the nail

The last post I covered  some of problems facing visual effects workers. Today I’ll cover some of the potential outside groups that may be able to help the VFX industry.  (* I’m not a lawyer so legal comments are based on my understanding and as always could be wrong)

As an individual you have to make decisions about your employment and situation. You have to be able to control what you can. If you’re being treated improperly then try to resolve it.  If you're not being paid then quit and change companies if at all possible.

However there are many things outside an individual’s control. Sure, you can talk to your manager but how good that does is very dependent on how important that manager feels you are to completing their current project at that moment. You can also quit but beyond these actions the individual has little control. You may quit a company only to find all the other companies doing the same thing simply because they can.

A company tends to have all the control because they have the money.  They are organized and made up of a number of people (manager’s, owners, etc) whose sole purpose is to make as much profit as possible.  Laws prevent them from exploiting workers too much (laws in place thanks to the unions) but beyond that it can be David versus Goliath if you have an issue with the company you work for that isn't handled by your manager.

There are many issues bigger than individuals. Bigger than single companies. Outsourcing, health care, overtime, and other problems are systemic issues and can’t be solved by a single artist.

In the past when situations like this happened the individuals would group and work together with like-minded individuals.  Suddenly it’s not one lone voice in the woods but thousands. Some of these vfx issues will have to be dealt with by some type of organization of many individuals if the hope is to make improvements to the situation.

UNIONS
Unions are organizations of individuals in the same situation. Their point to exist is to allow some voice from the worker’s perspective. They try to provide a balance to the companies. In the extremes a company will try to push to make as much profit as possible and to incur as little expenses as possible (paying workers less, etc).  A union will push to get as much as they can for their members  (benefits, working conditions, etc). Now neither side is nearly this extreme but it doesn’t take much to make it out of balance.  Large companies like GE are pushed by shareholders to keep making large profits.  The CEOs and executives simply view their workers as faceless drones that cost money.  Anything they can do to reduce these costs earns them a bonus.  Many vfx companies were started or are being run by people who were involved in vfx hands on at one point.  Most of them try to do a reasonable job of dealing with their workers but situations and changes may throw even that relationship out of whack.

The trick here is to find balances so the companies and the workers can both succeed.  It doesn’t help anyone if the company or the workers fail.

Since most vfx workers today work for vfx companies those are the places that would have to unionize if workers wanted them to.  The studios sometimes place the vfx companies in difficult situations so it's not necessarily an easy step to make for the vfx companies.

As I’ve stated before most people say of unions and vfx is ‘it will be the nail in the coffin for the vfx industry’.  This implies ‘keep quite and hope that wages and benefits don’t drop too quickly’. Like the man who swept up after the circus elephants, we don’t want to give up showbiz. The other favorite phrase is ‘look at the auto industry and what the unions did’. Really?? You’re trying to correlate the vfx industry of today with a totally unrelated industry from over 60 years ago?  Really? The Hindenburg caught fire in 1937 so we shouldn’t fly today.  In 1950’s there were only a few computers and those filled entire rooms so any vfx company should only have one computer.  “640K ought to be enough for anybody.”  PLEASE do some research on the actual facts of the auto industry and it’s ills before blaming them on the union.  Instead let's focus on the motion picture unions of today rather than a different industry over 60 years ago.

IATSE (International Alliance of Theatrical Stage Employees) covers the Camera Guild, Art Directors Guild, Editors Guild, Costume Designers Guild, Sound Technicians, Stagehands, Makeup Artists and Hair Stylists, Studio Grips, Publicists Guild, etc.  In addition to the IA related guilds are the Director’s Guild of America, Screen Actor’s Guild, the Writers Guild of America and other guilds.  IATSE was formed over 100 years ago for those who want to see how it  compares to the auto industry.

What group is involved with creating some of the top money making films and is doing more work on films every year? What group of artists and craftspeople currently involved with creation of motion pictures and television is the only one without a union?  That would be visual effects.

So exactly why are we undeserving of having basic bargaining rights and basic health care that a union provides? I think our contributions speak for themselves.  I think the amount of work and effort and skill is certainly without question.  There are those that say our wages are above the median so we don’t deserve coverage. Look at that list again. We’re not out of line with any of the groups nor are we the most expensive.  Others have said we want to be union to be cool. I still don’t get that.  Some say we shouldn’t get paid as much as other skilled high tech workers.  These same people forget that a large portion of the vfx workers are project to project. Much different situation for both workers and employers than having a standard job.

Now the majority of those other groups are hired directly by production whereas most vfx workers are employed by vfx companies.  But there are labs, DI and other companies (sound mixing, etc) that are union.

Unions aren’t perfect.  Anytime you have more than 1 person in a group you’re likely to have differences of opinion and politics. But the union does provide a voice for workers.  It does provide the potential of continuous health care and better protection from companies that go out of business or companies that force people into independent contractor employment.

Both the IBEW (International Brotherhood of Electrical Workers) and the IA have stepped forward in the last year simply because they were contacted by a couple of vfx workers.  The IA tends to cover the majority of the creative arts guilds in motion picture and television and would seem to be a better fit with other craftspeople in the motion picture industry.

Unfortunately the IA has done a terrible job of getting the information out. They have something of value that vfx workers should at least review but they have been having difficulty providing a clear message.  The details and the plan have yet to be provided. Some of this may be changing.  Latest personal meeting notes from the union and from Joe Harkin.

Just to respond to a couple of items in Joe's posting:
"The AMPTP thinks facilities are screwing the studios with over-inflated bids, and that they are making out like bandits.  I told Jimmy, it’s true, most of the VFX CEO’s are loaded with over-inflated salaries, and that he can quote me on it."

Producers have always thought vfx were over-inflated bids even in the optical days. "Sharpen your pencils" was a favorite catch phrase.  If it wasn't something they knew or were involved with they couldn't understand the amount of time, work and skill was required to do the work. At Dream Quest we had provided a production a basic shot estimate since they didn't know how many shots they were going to need. The project was shelved for a time and  had a new producer and team come on board months later. The new producer had a note from the previous team regarding the price and had misinterpreted that to mean do all the work (now 12 shots).  He went into full rant mode when we told him that was for one shot.  According to him all vfx people were just raking productions over the coals. You couldn't even assemble a minimal camera crew for a few hours for the price he was talking about.

They see the work and amount of time on the set when the DP lights a shot or when the production designer has a set built.  The vfx people are always hidden away somewhere else.

Most producers, executives and directors are not interested in really spending a full day seeing all the work involved in vfx.  And of course some of it's our fault for wanting to keep it short and dazzle them by cycling through the rendered takes or by making a few adjustments in real time.  What they walk away with is that it's simply a matter of knowing which button to push. Giving them a shot to roto might do a world of good.

Now to correct a few things Joe says.  VFX bids are not over inflated. With the current competition it wouldn't be possible even if you wanted to. Multiple companies bid on just about everything.  If any of them are drastically different that will affect their ability to get the work. In the bidding phase there's only so much accuracy you can put into a bid, especially if it's in script or storyboard form.  Not knowing the director means you're only going to be so close. Nervous vfx producers may bump up some shots slightly to increase the odds of being covered but these same producers will reduce prices on other shots (likely below what it will really cost) to try to hone it down.  When the project is all done the amount of profit is very small, compared to other businesses and especially when you have to cover the dry spell.

Joe also mentions most vfx CEO have huge salaries. Frankly I don't see how anyone could know what most vfx CEOs are paid since that's not public information. I think Joe's making the same type of judgements as producers. Once again there's not a huge profit for most vfx companies these days.  I think it also depends on what you think an over-inflated salary is.

Here's an interesting tidbit: "A typical chief executive at a U.S. company earned 262 times the pay of a typical worker in 2005, according to a recent report. With 260 workdays in a year, that means that an average CEO earned more in one workday than a worker earned in 52 weeks."  From what I've read that's already eclipsed in 2010.  I can guarantee vfx CEO's do not make 262 times their employees.
Whether a vfx CEO is over paid depends on how valuable they are to the company. The CEO may be a part owner as well. But I think you'd be hard pressed to find most vfx CEO's being paid way above everyone else. Not to say it doesn't happen but that would be the exception.

UNION TO DO ITEMS
Some of the recommendations for the IA if they are serious:

1. List key union benefits for vfx workers.

2. What would be the benefits to the vfx companies? (potentially lower health care insurance, etc)

3. What would be the benefits to the studios? (certification ,etc)

4. Post a FAQ - Do you have to always work for a union shop? What happens if you work for a game company for 3 months? What are the dues? What is the initiation fee? How will this prevent outsourcing?  Won't this simply cause vfx companies to go out of the country? Is this only for LA? Only for California? etc.

5. Cost analysis of a medium vfx company with and without vfx union.  More? Less?

6. Overall Plan - What’s the plan to organize and more importantly what is the plan for how this will be structured?

[Update: some items now covered by Union website. Start at  VFXUnion.info ]

COSTS FOR VFX VENDORS
Many people are worried that the union would impose a very high cost increase for the vfx companies and this would simply drive the work out of the country.  Obviously it doesn't do the union any good if they truly price the companies out of business nor would workers vote for the union if it meant a vfx company closing.

Here’s a valid blog post from a small vfx vendor covering this issue.  What's best for *you*? 
This expreses the concerns raised by a number of companies.

I've owned and operated a vfx company.  It's not easy to do so and make a profit and it's even more difficult today. But there are some basics of business, one that you can't continue to work for less than it actually costs you.

Let’s review a couple of the key concerns mentioned in that posting. Health Care and Overtime.   Somehow many get the idea that these issues don’t exist if there is no union.  These in fact are issues regardless if there is a union or not.

If a company is not paying for some type of health care for their employees then the employees are footing the entire bill themselves already (or going without).  Take a look at real job listings for full time work at legitimate businesses.  Among the benefits listings are typically health care and 401k plans (after 3 months).  The company down the street making widgets likely has some form of health insurance for employees.  The bank or store you shop in does as well. These are the benefits that make up your total compensation.

Overtime pay is covered under the law and there are specific criteria that need to be met to avoid paying overtime.  The choice of being an independent contractor is not a choice to be made by the company or the individual.  It is the IRS.  It holds true for whether someone is technically exempt from overtime. The company has to have legitimate reasons to not pay overtime and just because isn’t good enough.

So using the numbers in the post the estimated costs are 20% (I’m not sure how accurate this is). Well either than 20% is made up by the employer or by the worker. And if the worker isn’t covered (which seems to be the case of the post) then the worker is already accepting a 20% cost overhead without a union. If you were paid $100,000 salary this would equate to $80,000 elsewhere (with benefits) if the numbers are correct.  As a worker you would have to consider these figures and how much overtime you expected to work for the same rate without being paid.  Is the pay high enough to cover all of this?  That's why I urge newcomers to use caution when simply looking at salaries without knowing what it truly means.  You can't do a straight comparison with a regular job since the hours, benefits and other circumstances differ. It's not uncommon to hear vfx workers are paid too much (by those not doing vfx).  However compare their adjusted pay (potentially no benefits, no overtime pay for what could be a lot of overtime, the length of unemployment, etc) and that of other high tech jobs that require a lot of skill, experience and knowledge.  It’s certainly not out of line in that context.

Overtime and some form of health care should be looked at as the cost of doing business just like computers, rent, power, etc.

So if you operate a business and do not cover health care to some extent or overtime and you can’t afford to cover these business expenses, then you’re under bidding.  When you bid a project these costs need to be included in the bid if it is required to get the work done.  If there are management mistakes then it shouldn’t be the workers who have to pay for it by putting in uncompensated overtime. If the client changes the delivery schedule or causes something that requires overtime, then that should be billed to the client. The workers shouldn’t have to be the ones to pay for an insufficient contract.  Now if you and all your competitors are bidding razor thin margins or underbidding projects, then it’s simply a race to the bottom where no one survives. How many other business expenses will be ignored or skipped to bring down the costs?

In any case the union will have to work with the vfx companies to come up with a balance of pay and benefits that is affordable by everyone involved.

Now we’ll have to see if the IA can ramp up and actually make this happen.

Since there is a need for some type of organization of workers to help solve some of these problems, the other possibility is a whole new group. The potential could be open to vfx workers worldwide and to focus on a way to achieve this in some form that would be built for today’s world.  Is there an equivalent or an alternative to the union now in 2011 that could achieve all the same results and more as a union?

Joe Harkin has suggested the VFX Foundation as a non-union, union.
Setting up any type of organization is a huge undertaking of time, money and effort. If you think it’s slow going now consider how long it will take to start from scratch. Trying to cover the legal issues, tax issues and organizing it is a full time job for a good size staff.  Even a non-profit requires spending money on staff, rent and legal bills so as much as some people wish to avoid some of the issues they see in unions, it’s likely the final results will be very close to a standard union

Newer post:
Visual Effects Guilds

Other union info:
35 Ways Unions have improved your life
How Companies Turn People Against Unions
When Did “Union” Become a Bad Word?
Anti-union and Certainty without evidence
Labor Stats - Guide to Motion Picture Industry


TRADE ASSOCIATION
When this is mentioned there’s usually the cry of collusion but there can be and are real reasons to have some type of trade organization for businesses.  This is where companies organize as a group on things that make sense.  Some of the reasons include standardizing practices, standardizing on technical formats (Blu-ray, etc), research and development, advertising (Got Milk?), and lobbying government for issues that would benefit the collection of companies.

One example is the Association of Independent Commercial Producers (AICP)

According to their documents “In 1978 the AICP undertook the task of developing guidelines to be used to foster responsible business practices between production companies and their contracting-clients.  Since that time, these guidelines have been recognized as the industry standard. “

Sounds pretty good to me.  Those guidelines include standardized bidding forms, firm bids, cost plus bidding, payment guides among other things.  Guidelines pdf.   The VES had been looking into standardized bidding at one point. Certainly these are a list of potential items to explore.

Another group is the Motion Picture Association of America (MPAA) which represents a trade association of the studios.  The MPAA deals with movie  ratings and piracy issues among other things.

From their site:
“What are the key functions of the MPAA?
We are the voice and advocate of the American motion picture, home video and television industries, domestically and, through our subsidiaries and affiliates, internationally. We champion a healthy, thriving film and television industry by engaging in a variety of legislative, policy, education, technology and law enforcement initiatives. These efforts range from safeguarding intellectual property rights to using technology to expand consumer entertainment choices, to championing fair trade agreements and a secure future for artistic freedom of expression.”

Now the vfx companies could do something similar (trade association) and actually had some initial meetings but nothing ever came of it. As I mentioned before such a group could likely set up standard health insurance for vfx workers if it wished to. They can’t collude on price but I would expect it’s possible to have all companies agree not to bid below cost as seems to happen in the vfx industry.


VES 2.0
The Visual Effects Society (VES) was setup as an honorary society for professionals in the visual effects industry.  This was to provide some type of common organization to share information, help to educate and overall to help further the advancement of visual effects and those involved with visual effects.

Along those lines it was somewhat similar to The American Society of Cinematographers (ASC).  The ASC represents some of the top Cinematographers in the U.S.  They publish the American Cinematographer Magazine, run comparison tests, help to standardize, give educational presentations, etc.  You have probably seen members in film credits with the ASC after the name.  There are similar Cinematography honorary societies for many other countries.  The ASC is very selective and limited to Cinematographers (not camera assistants, operators, etc) They have  approx. 350 members. The VES is not as restrictive and is global with over 2400 members worldwide.

The ASC is an honorary society and exists to celebrate the best artists in cinematography. This fits with the other parts of this equation. The International Camera Guild is the camera union that covers cinematographers, operators, and assistants and helps to provide them collective bargaining, pay scales, benefits including health care and pension and proper working conditions. The Alliance of Motion Picture & Television Producers (AMPTP) is a trade organization (there’s that idea again) that represents the producers/studios in negotiating with all of the film unions.

Here’s their info:
“Since 1982, The Alliance of Motion Picture & Television Producers (AMPTP) has been the trade association responsible for negotiating virtually all the industry-wide guild and union contracts, including the American Federation of Musicians (AFM); American Federation of Television and Radio Artists (AFTRA); Directors Guild of America (DGA); International Alliance of Theatrical Stage Employees (IATSE); International Brotherhood of Electrical Workers (IBEW); Laborers Local 724; Screen Actors Guild (SAG); Teamsters Local 399, and Writers Guild of America (WGA).”

The VES as noted is an honorary society and ideally there would be other groups to balance the business aspects (the union and a trade association) as there are with the rest of the motion picture industry.  The VES could not become a union or a trade associate.  It’s mandate was to be an honorary society and even if it wished to change this would require major legal and structural changes and no society would exist at that point.

It’s been evident the vfx industry has been hurting and facing some real issues.  Members have been asking the VES for help in dealing with this situation. When it became apparent that the vfx trade association was not happening and the vfx union effort was taking time the VES announced plans to do what it can as VES 2.0.  Because it’s not a union it can not collective bargain for its members.  Nor can it represent the vfx companies as an association but as noted in the announcement (and the followup update) there is strength in numbers and the VES hopes to explore solutions that will benefit the entire vfx industry.

I’m on the VES Board of Directors and on the the committee involved with this.  I can’t discuss any specifics but will say meetings are happening and we’re making progress.  The VES will be making official announcements when it’s appropriate.

Make your voice heard. Do some research.  post possible solutions.  Join a VES committee. Feel free to post comments here or email the Leadership group at the VES.  The VES Forum sometimes works as well.  Hopefully that will be improving shortly.

1 comment:

  1. Great in depth analysis of the situation!!! Thanks, Scott!!

    ReplyDelete