Working directly for the studios

Working directly for the studios

Joe Harkin, Dave Rand and David Stripinis have all expressed a potential solution to some of the problems in today’s vfx industry by having vfx artists working directly for the studios on projects.  David Stripinis excellent article goes into more details.

I covered some of this in my VFX Business Models post.

The idealized version goes like this:
If vfx workers were employed directly by the studios that would eliminate some of the potential problems and disconnect going through a vfx company. The vfx workers currently can only interact with the vfx company for working issues but much of the power (including scheduling and changes) is out of the vfx company’s control. If vfx workers were directly employed by the studio then there would be a direct connection in terms of costs and schedules, especially for changes. There would be more incentive to make less changes and to stick to schedules.

Because the workers would be part of production the director would interact with them more and would be able to provide feedback sooner, eliminating waste. These would be creative and schedule wins for the workers. Since most post-production (besides vfx) is still here in California then that would mean that most vfx would remain here as well.  This eliminates the need for U.S. vfx workers to travel to other countries to keep working and earning a living.

If only it were all true.

Yes, there can be some real advantages to having vfx artists work directly for the studios.  And as with everything, there are some disadvantages.  And in some cases it may be a case of “Be careful what you wish for”.

A little background
David covered some of the changes in his article. There were other projects besides Star Wars and Close Encounters (Doug Trumbull, vfx supervisor) which setup a team under production to do visual effects. 2001 and I believe Logan’s Run and many other projects done as the studios were closing up their own vfx departments. I worked on Close Encounters out of high school and was part of setting that up. All of us were paid directly by the studio. I was lucky enough to work in just about every department.

After Star Wars, George Lucas decided having a vfx team was a good thing he set in up ILM in Marin with the intent for himself and his friends to use (Spielberg, Coppola, etc) Others from the original Star Wars team (John Dykstra) setup a vfx company called Apogee at the same location and with some of the same equipment.

After Close Encounter wrapped Universal setup a vfx facility called Universal Hartland to do Buck Rogers (TV and film projects) and Battlestar Galactica (Apogee had done the original work). A number of us went to work there. The vfx for Star Trek: The Motion Picture was setup at Robert Abels, a commercial production company that did very graphical type of work (7UP, etc). Richard Yuricich, the vfx dp on Close Encounters, called myself and a number of others to come work on that project. When it became apparent a commercial production company may not be the most suited for the vfx, Paramount brought in Doug Trumbull. He re-opened the same industrial building used earlier on Close Encounters and added another building.

At the end of Star Trek, I and five others decided to setup our own company, Dream Quest. Seeing short term facilities being setup and dismantled for each project seemed like a waste. We were able to supply vfx for commercials (CBS, Dodge, Timex, etc) , television (V mini series, Space, Amazing Stories, etc) and features (Blue Thunder, Buckaroo Bonzai, etc.) Depending on the project we might bill based on a given rate for animation camera and motion control stage. This was time and material. Or we may bid on the whole project if we felt confident and there were a limited number of options.

There weren’t a lot of vfx projects at that time but we kept reasonably busy. We also did some work for other vfx companies (matte paintings in Caddy Shack for Apogee, floating balls in E.T. for ILM). You might be doing piece meal work but if you were a mid to large size company you would likely be the vfx company doing the whole movie. And there was usually just 1 full vfx supervisor on a film at that time.

In the pre-digital days if you wanted to start a vfx company you need to have some real equipment, hard work and expertise. Stage space, room to build models, motion control system, animation cameras and optical printers weren’t cheap so you had to make a real commitment. VFX companies weren’t the problem for vfx or vfx workers.

The development of digital was the opening of Pandora’s Box. That created an explosion of vfx companies and competition. It also allowed the work to be done anywhere. There had always been some Hollywood work going to the East coast or to London but those were certainly the exceptions. The need to interact and the needs to ship and view film make those options more awkward in pre-digital era. All of this ushered in at the same time as fixed bids were becoming the new normal. Previously the studios might put out the work to bid but this involved the producer and director. In the digital age each studio now has their own vfx producer which are very involved in where the work is likely to go.

And given the size of the projects the shows are frequently broken up and sent to multiple companies. It’s not unusual to have 12-13 companies. The break up is due to having a short time for post, trying to send to the least expensive company for a given task, sending to the best company for a specific task, and/or to not put all of the studios eggs in one basket. Now each company might have their own vfx supervisor, vfx producer, CG supervisor, animation supervisor, coordinators, etc. So this creates a certain amount of redundant overhead and waste. This has led to an explosion in the number of people in these positions since there are now multiple people holding these same positions on each project. The disadvantage is this dilutes the position of visual effects supervisor and some of the other positions. On a feature film there is only one 1st unit cinematographer and possibly a 2nd unit cinematographer who follows the lead of the 1st. When you have multiple vfx supes and others on a film then the studios start to look at all of these people as being interchangeable.

So now we may have come full circle to look at working directly for the production again, either in whole or part.

Previs
Notice the development of Previs follows a similar path. Some previs is done by the vfx companies themselves but there were also a number of freelance previs artists who were hired directly by the production.  In the last few years there have been a number of previs companies setup so the production hires a previs company which in turn hires previs artists. The difference with previs is they normally bill for time and material since it’s clear the number of artists working directly for production.  Will they end up going to more of a fixed bid route like vfx companies or can vfx companies work their way back to become more time and materials companies?

Working for the Studios
Below are some of the advantages and disadvantages for the different groups affected if more vfx work was done directly for the studios. I list a number of items as potential which means it’s possible.  How likely these things happen depend on the studio, director, producer and situation.

Advantages
Studios/Director/Producer
·      Less expensive
  No paying for vfx company profit
  Potentially less overhead (no need to pay for down time or for people/equipment not in use on project)
·      More direct connection to vfx workers
·      Can prioritize and schedule work directly
·      Can setup near studio or other desired location
·      All work focused specifically on their film. No people or equipment being pulled to help on another project.
·      VFX supervisor doesn’t have to ‘sell’ work to director based on pressure from vfx company

Workers
·      Part of production, not just person in a black box (vfx company)
·      Potential to interact with director more
·      Potential for working more efficiently (quicker feedback, less changes)
·      Potential for union coverage (Studios are already union signatories so covering vfx not as big of jump as vfx companies)
·      Employer is both paying the bills and making the profits so it’s a more balanced system. The people you work for have the most to gain from you.
·      Potential for profit participation directly or indirectly (health care funding, etc)
·      More individual branding. Vfx companies tend to push their brand, not their vfx supervisors or other key people.

vfx companies
·      A vfx company could lease out a facility for $x per day/week with profit built in.  Less risk. Studio would cover the most expensive and variable cost, labor.  Direct connection makes the studios responsible for changes, not the vfx company.
·      If the vfx company is simply a lease company then they have potentially less overhead costs during slow times.

Disadvantages
Studios/Director/Producer
·      Time required to setup a facility. Pre-production already tight on most productions.
·      Preplanning required
·      Final vfx cost more of an unknown
·      Would have to hire a vfx production manager or facility manager to actually setup and run the vfx facility. Most vfx supervisors and producers these days don’t have the experience of setting up and running a full facility.  With the short schedule they’re unlikely to have the time even if they had the ability.
·      No historical data on how well a particular team will work (time, money, quality) unless they use same team over multiple projects
·      No long term R&D since this would only be for duration of the project. Longer R&D projects and related benefits would not come to fruition except as 3rd party developers.
·      Who owns the R&D that is developed on a single project? How is that able to be used on other productions?
·      Can’t point finger at vfx company for costs or schedule issues
·      Can’t ignore issues of required overtime

Workers
·      The director may not actually be any more involved. The director is usually busy with editing, sound mixing and other tasks at the same time as vfx are being done. This is the case even more so with tight post-production schedules. Most edit suites are setup at a studio or nice digs in a nice neighborhood. Typically trying to find large square footage to house vfx workers at a low rate means an industrial building elsewhere in town. This can mean 1 ½ hr drive across town in LA traffic. (Note that in London the main vfx companies and much of the editing is done in Soho so this is already convenient.  Property costs must be very high and cause a related rise in overhead costs at such companies.)
·      If you work for a company that is able to keep busy then you may not have to worry about looking for the next project and have little down time. Working for the studio directly would mean you were project to project and be forced to be a full freelancer looking for work after each project ends. And the studio isn’t looking to do another vfx project, they’re looking to do their next film project, which may or may not include vfx.
·      Even though the studios are already union they are much larger companies than vfx companies and could push even harder back to avoid a vfx union. A number of vfx supervisors are in the camera union but the studios don’t recognize this because there is not an official title of VFX Supervisor in the union contract.
·      Even though the studios are now more financially linked to the costs of making changes, the executives and director may feel freer to make changes since there’s no company between them and the people working on the vfx. The vfx company sometimes acts a buffer to some studio demands.
·      Saving money on one aspect is not always the highest priority at a studio.
·      Not all directors want to spend more time working on the details of the vfx and directors vary on the ability to review in progress takes.
·      Nothing prevents the studio from setting up the vfx team anywhere in the world so doesn’t necessarily gain more work balance in LA.  (unless an LA director wanted to truly spend more time working with the vfx team)
·      Vfx are still very labor intensive. Incentives and lower costs elsewhere are still likely to cause the studio to choose to setup a team elsewhere, even if it might not be the most efficient. If the studio spent as much money on editing and sound mixing as they do vfx, those tasks would probably go to less expensive locations as well.
·      If the studio is doing all of the vfx then there will be many vfx company personel that will be out of work including the company vfx supervisors, producers, cg supervisors, etc. since there aren’t enough films to keep all of those people busy.
·      Any type of profit participation is extremely unlikely for vfx workers, except as a form of payment into health care insurance.

vfx companies
·      Any form of additional competition makes it more difficult, especially competing against a team that works at cost.
·      Studios may not be interested in leasing your company
·      Switching to a lease type of setup may not be easy and there’s still the issue of making enough profit to cover the overhead during the time between projects.

Reality
In it’s current form the vfx business model works great for the studios.  They can send a package of storyboards/previs out to multiple companies throughout the world and get back bids.  Since the studios view the vfx as a commodity they can simply pick and choose from a menu.  All the companies they’re bidding have been around for a while and most likely already worked for the studio at one point or another so the studios know what they’re getting.  The studio can simply select based on the balance of quality, speed, size, dependability and costs among other factors. They’re selecting a known quantity in most cases and are able to validate it to anyone else in the studio.

It may cost a bit more to have it done by a third party but it’s also much less risk. That’s why studios prefer sequels and remakes. It’s also much easier to simply turn over footage to a vfx company and let them deal with the details of artists, hardware, software, and other issues, including the complexity of setting up a facility and pipeline originally. Just like when you need to change the oil in your car.  You could do it yourself but you're usually happy to pay someone else to deal with the details and mess rather than hassling with it.

Studios could also setup a longer-term vfx facility to avoid potential waste of starting up another team/facility for each project.  The problem then becomes the overhead and the need for long-term commitment. This has been the same for most studio facilities which usually closed after a small number of projects.

Unless there is a very large compelling reason for studios to do the vfx work employing vfx artists directly, it’s unlikely to change except for specific cases.

More things to think about.

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Just a note regarding David's mention of the VES.  There are a range of different people on the VES board, including hands on people who don't manage others. I know most of us are keenly aware of the plight of the average worker since we're usually side by side with them.

Part of the problem is that:
1. People need to volunteer and sign up to be on the board.
2. Enough people have to be aware of the person to be voted on.
These two things make it difficult for random roto and TD's to get on the board. Hopefully members will vote to balance that out.

Note the same issue will likely happen if a vfx union were to form. Best if there were a requirement for a representative from each main category of workers.

The other thing is the VES is not looking at any group (studios/vfx companies) as the enemy.  Each group is trying to do what it thinks is best. All the pieces have to be working together and the VES is trying to find solutions that help balance this out.