At SIGGRAPH John Textor announced he was giving Scott Ross $100,000 to help start a visual effects trade association.
This is probably a good thing.
What is a trade association?
It's a group of companies in a specific industry that organize together to achieve common goals. The MPAA is a trade association of motion picture studios that negotiates as a group with the guilds and unions of hollywood. They standardize and provide film ratings. They are also involved in anti-piracy protection.
There's trade associations in quite a few industries. International Dairy Foods Association covers the nation and Dairy Institute of California is made up of dairy farmers in California. Because they cover a specific area they then lobby the state or federal government for or against specific bills that would affect them. Some trade organizations do group advertising as well or set standards for their industry.
TechAmerica is made up of high tech companies.
Wiki coverage of trade associations
As you can see these groups are able to leverage their strength in numbers to their advantage. In many ways a trade associate is like a union or guild for companies. The companies pay dues and they are working as an organized group.
Scott Ross originally estimated the association would require $3 million a year to operate. He's since cut that figure in half so the $100,000 he is receiving is seed money. And the company dues will be significant compared to a few hundred dollars most guilds charge their workers. Dues in the trade association could dwarf the cost of a company unionizing.
What could the trade association do?
They could agree on standards and practices such as visual effects bidding forms or even things like model interchange formats. The Association of Independent Commercial producers (AICP) has standardized bidding forms and bidding processes among other things. Although my understanding now is that this may not have truly benefited the producers in the long run.
They could agree to working conditions for their workers. They could use their strength in numbers to make deals with software or hardware vendors. They could review basic business models and work as an organization with the studios to negotiate common issues.
If there were a visual effects union the trade association could be the ones to negotiate with the union compared to each each company having to do it individually.
What they have to be very careful of
Collusion. This is where companies get together to decide on financial or hiring practices that are illegal. ILM and Pixar colluded to not hire each others animators. That was illegal as per the justice department. They won't be able to set rates or agree to match pricing. Because it's planned as an international association it will have to abide by laws that affect all nations.
What it can't do
The association is currently planned as an international group. You'll notice most trade associations are region based where they can lobby for specific things. With an international group they won't be able to lobby any specific government because that would be detrimental to other members of the association. So that means things like visual effects tax incentives will likely not be addressed or dealt with.
There will also be a question as to how many companies and what size of companies signup. So far visual effects companies have been reluctant to start a trade association on their own. Will they be willing to join one if someone else starts it? Will it provide a balance for very small companies and the largest visual effects companies? In some ways it can help provide the smaller companies with more leverage but only if that's the leverage the smaller company wants. Will companies who aren't members benefit from the improvements the association makes? Will studios seek out associate member companies or avoid them? Will the the studios take umbrage with companies looking to join the association as some companies do to workers who are looking to join a guild? That all depends on the associations agreed upon agenda. It's also very dependent on which companies and how many are in the association. If all the largest companies are members then there may not be much option for the clients.
It will be interesting to see how long it takes to build a trade association and come to agreement on key issues. This is likely to be a very time consuming process (at least a year or more).
As mentioned a trade association in some ways is like a union or guild for the companies. By organizing together they provide a strength in numbers and solidarity that independent companies don't have. Same thing applies to unions and guilds. They provide a strength in numbers and solidarity to individual workers that they don't have by themselves.
The distinction is a trade organization has different goals than a guild. The trade organization's goal would be actions that are beneficial to the companies. A guild's goal is actions beneficial to the workers. More profitable and balanced companies would be good for the visual effects industry as a whole but doesn't necessarily result in benefits for the workers. The trickle down effect does not work. A more profitable company will tend to pass the additional profits on to investors, executive management and possible long term investments. None of this may address hiring and layoff practices and it's unlikely to provide things like continuous health care or limited overtime.
In fact a trade association could make decisions on practices that are detrimental to visual effects artists. (Amount of overtime, overtime pay, employment agreements, etc) Only time will tell how this plays out. If that's the case then individuals who quit specific companies because of certain practices may find that most other companies are now doing the same thing. Individuals have very little power when dealing with a single company and will have much less with an organized group of companies. A trade association may be even more of a reason to look at a guild as a way to keep some balance.
A visual effects trade association could be a good thing for the visual effects industry if it actually materializes and takes the necessary steps. It won't deal with tax incentives and some of the other ills of the industry. It doesn't and shouldn't preclude a guild for visual effects artists.
[Update: DD closed operations in Florida and the company has been sold. The $100,000 being offered to help start the Trade Association didn't happen. Scott Ross had obtained a number of yeses and at least a couple of Nos. Not sure how likely it will proceed at this point.]