I'm doing some basic research on 2 things:
Visual effects and animation students or graduates who feel they were misled by the school they went to regarding vfx and animation jobs, their ability, learning, etc. This is global so whether you're in US or India or other location if you think the school took advantage of you please let me know.
I'd also like to hear about vfx and animation exploitation in the work place. Once again this is global. US, Canada, UK, India, China, etc. are all welcome to be heard. If you're being mistreated or working in harsh conditions let me know.
I did the survey months awhile ago but I think there were many who didn't respond, especially in places where vfx/animation are now being developed. There was a Facebook page just for Indian Animation workers that is now down. If there are still issues let me know.
Email me at squiresstudios at gmail and spread the word. If you have something to say regarding these issues and wish it to get attention, then please let me know. Thanks.
You can leave comments below instead if you wish (even anonymously) but emailing me gives me a contact to follow up with, especially if this gets traction.
[Update 11/23/2013
I'm getting a number of depressing stories about poor vfx management around the world. Please go ahead and send me your story. All writers will be anonymous unless they wish otherwise. Like let me know which details I can make public or not.
Remember this is world wide.
I'd also suggest that anyone emailing me should consider rating these companies at http://thevfxwatchers.com anonymously. That way you can alert others to what you have found and maybe these things will help the better companies and to cause the problematic companies to improve.
VFX and animation schools - I still haven't received much about vfx or animation schools. If you feel you've been misled about the cost, quality or value of this type of education or about the job opportunities then please write in.
[Update 12/21/2013
Indian vfx and Animation students being exploited
Showing posts with label china. Show all posts
Showing posts with label china. Show all posts
Tuesday, November 12, 2013
Wednesday, July 31, 2013
The Impact of Visual Effects Subsidies
The Impact of Visual Effects Subsidies
This was a post in regard to a conversation and postings on a mailing list. I'm paraphrasing the original comments here so these are not the true quotes. I've also augmented it based on some of the discussions that followed.
Steady Employment
"While subsidies are a problem, they're not nearly as big of issue as people make them out to be. What we really need is need is enough profits to provide steady employment and not lay people off. "
While it's a nice idea, even Hollywood hasn't employed people on staff since at least the 1940's. The film factories used to have production people move from project to project but those days are long gone. Films, television and commercials are done on a project by project basis. Crews are hired, work the length of the project and then are laid off. The studios do not continue to pay the crews once the project is done.
No matter how much profit a vfx company may make, it will lay people off if they don't have work to do. Even places like ILM would routinely lay off half the people working there since they weren't on projects. Now if a vfx company has a contract for another project and think they can put workers to productive use in a relatively short time then they will be willing to hold on to them for that short duration. There is of course cost involved every time they have to hire someone, train them, get them up to speed, etc. But that cost is unlikely to be enough for them to hold onto the majority of people for months at a time with no specific projects or tasks.
That's how visual effects was done. With things like Harry Potter when there was a known amount of work coming in and where places in the UK were booked for 2 years in advance (in part thanks to subsidies), people got the idea that that would continue and that they were on staff. [Note that some people in subsidized areas take these things personally. I've been in the room with studio executives, vfx company managers and others. In many cases the studios don't even request a bid from a non-subsidized company. This is in no way reflects on the capabilities of people or companies in these areas, simply what has happened and continues to happen regarding the business aspects. That's the reality and that's what I'm reporting.] But since vfx is a service business and film are not scheduled based on the whims of the vfx companies, the work will continue as feast or famine. That's how projects work.
We don't make widgets at a set rate with a constant demand. We don't work in retail where there's a reasonably consistent amount of work all the time with thousands of customers. We're more like the workers at a summer park that have seasons where they hire people and seasons where they will let them go.
If management is on the ball and the stars align, then they can get in projects and try to adjust schedules to keep crews moving from one project to another but that's more of the exception than the rule.
The only places with some real control over their work flow are animation studios which control the creation of the work, the amount of work and the scheduling. And even that isn't a given if there are market issues (a film does poorly) or if an internal project gets canned, people are laid off.
The places that don't lay off people are even more likely to go under. The burn rate for hundreds of people is staggering and unless that's being compensated in some major way, it will bring a company to it's knees.
Subsidies Imapct
So while the subsidies weren't necessarily the main reason for DD and R&H problems they certainly played a role.
DD went under because the CEO saw how little margins they were making in vfx and his idea was to expand out into other related areas. Get local governments to fund much of it. Take a % of a feature film, invest in making your own animation content, start up a school, get into medical & military related media. In the end there wasn't enough real funding to cover all of that and it takes time.
R&H suffered from studios pulling work, among other things.
So why do vfx companies have terrible margins and weak contracts? Why do they have so little leverage?
vfx companies spend up to a million dollars setting up facilities in places like Vancouver, Montreal, etc. Why do they do that, especially if money is tight? It would make sense if they were a retail chain and could get new customers. It would make sense to a mining or lumber companying wishing to access new resources. vfx have no new customers in subsidized areas. They have no more resources in subsidized areas. The only reason they setup shops there is because they are subsidized and the few clients they have demand it.
The subsidizes don't create more work, they merely spread the work around based on politics, not on efficiency. The subsidies encourage more training and local employment in the subsidized areas so you end up with more workers than the global vfx industry can support. And those workers will be fine until the subsidies in that area are reduced or another place offers greater subsidies. And that will happen just as Michigan saw with Louisiana and just as BC and UK are seeing with Toronto and Montreal. So now you see the erosion of worker wages. And those companies that expanded to the subsidized areas then have even more workers on their payroll, meaning trying to maintain staffing while low on projects becomes even more impossible.
How do California based companies such as DD and R&H compete for work? How do they lower their costs by the 60%* it may take just to match another governments subsidies? They lower their prices to the bone and then some. Add this type of competition along with the cost of opening branches all of the world and you can start to see why vfx companies are becoming weaker and weaker.
[* People ask where the 60% comes from and assume I'm making it up. It comes from the cumulative incentives offered in some of the Canadian provinces if you study their own government documents. Note this is for visual effects work done and includes things like DAVE in BC.
Disney covered some of this at the VES Production summit:
They focused on Canada where different region have different incentives. And many of the types of incentives add up. (i.e. they may have a labor incentive, a production incentive, etc so these can be cumulative to a large amount)
"Using the example of a $1 million dollar project – in BC a production could get back $379,000. In Ontario credits can be combined to return $437,000 and in Quebec the return rises over 50% to $572,000." (from fxguide article and my notes)
So that's 57% from Disney estimates. It's also covered in the VES White paper on the state of the industry. While you can argue about the precise percentage and the requirements, in any case it's a substantial amount, much more than simply a sales tax rebate. And still a major percentage to try to compete against.]
Subsidies encourage even more competition than would have resulted from technology and normal evolution. Free money being offered by governments has a way of distorting markets to no advantage except the final recipients. Companies in some area have grown much larger than they would have if left to their own. More people jump into the fray when they see free money. So now you have so many vfx companies that they will all underbid their actual costs in an attempt to stay in the game. And they are covering their crew costs, or at least attempting to do so, while being paid less than it actually costs them. How in the world are companies supposed to provide stable, continuous work to all their employees between projects when they can't even make profits while working on projects? And the sad part is most vfx companies are operating in the red, even those in subsidized areas.
There is a limited, finite amount of work so it's impossible to employ all the people currently in vfx all the time. The subsidies have encouraged more companies and workers than the industry can really support.
Is there little wonder why then vfx companies have so small of margins? Or that they have weak contracts and no leverage? The studios have plenty of other subsidies and companies to threaten any one vfx company with.
So no, subsidies didn't cause DD and R&H to go out of business but when you're in a weakened state of running in the red and trying to compete, the smallest bump may be your last. And this applies to vfx companies around the world. How long can any company operate in the red? Some in the UK have been doing it for at least the last couple of years. How stable do you think it is in subsidized areas where 75% work is there only be because of subsidies? Subsidies are no guarantee of stable work. The subsidies are controlled by the whim of politicians in all areas and as we know that can change quickly. And how stable do you think it is working for companies operating in the red year after year? At some point their owners or creditors will say enough is enough and close the company without warning or notice. The next DD or R&H can happen anytime, anywhere. The subsidies have created a very fragile industry and for those who think if only the companies made a little more profit and kept all their workers employed during the slow times I suggest you start looking at the actual situations, including cause and effect.
Film Production
So why have most Hollywood film crews (Directors, writers, camera, grip, sound, etc) been able to make being employed project to project work in the past? Even without the stability of permanent work at one studio? Because there was a concentration of studios in one area and each had a variety of projects in different phases at any one time. With a number of sources of employment it was likely a new opportunity would start up in a reasonable amount of time. Work on a feature and wrap that (be laid off). A couple of weeks later you may get 2 days of a commercial shoot. Then maybe off a couple of months and then get work on a television project that may last 6 months. If you're lucky and the tv show gets picked up then you may be off for a few months and know that a project is waiting for you at the end of that time.
Some people have stated that I'm advocating for project based hires. I'm simply documenting that the work in reality is project based. We do service work for studios who do not maintain a consistent level of output of films, let alone visual effects shots. That's simply the nature of the business for better or worse. It's possible on television vfx to have a little sense of the amount of work required per week and maintain the staff accordingly. But once the show wraps for the season and has no work coming in until it ramps up again I suspect most are given unpaid 'time off', if not laid off. When there is too little work at a company they can either go into debt quickly or they can lay people off.
It was also mentioned that vfx is special, because we do R&D and pipelines and other things that we should be employed continuously and not be hired like interchangeable grips. Why vfx professionals choose to view all the crew as grips is beyond me. Maybe why they see us all as technicians. You'll notice the directors, writers, cinematographers, production designers and many others are guns for hire as it were. I don't consider any of them interchangeable. Right how most vfx companies do hold on to key people in management, R&D and even some in production if they decide they can't risk losing them. But just because you may want to work on the pipeline does not mean you're able to continue to pay everyone from roto to animation to TDs.
And the other thing to note about R&D is it was originally all R&D. Figuring out skeletons, facial animation, skinning, texturing, painting, etc all required work. Most places had to write code to do just about everything from animating to rendering to compositing. By now you can purchase or rent software that handles the majority of those tasks to a large extent. There's even project management, databases and render queue software to handle at least a percentage of the work used to done by the pipeline people. Water, fire, hair, fur and other speciality software are all available to some extent for purchase and the number of projects requiring speciality and custom software is shrinking. For a typical show is a large shop with 30 people in R&D (full time) going to be as inexpensive or as necessary as a team which simply buys their software with minimal R&D support?
Unions
The freelance project to project work process is one of the reasons why there are film unions. So you can go from project to project and know that there will be some minimum standard all the employers have to meet. You know they all have to follow labor laws and union regulations. You also get continuous health care, pension and other benefits even though you could be working for a different employer every week. And that's also why most people involved in film crews are paid above average working rates, because they are not guaranteed full time employment. They are taking on some of the risk themselves. Yet those in the vfx industry accept their rates as the norm and expect full time permanent employment.
Locations
The concentration of both studios and film crews in a few specific areas made all of this type of freelancing possible. It was good for the studios since they didn't have to employ entire crews permanently. When they needed a crew they simply put out the word. It was good for film workers since they could reasonably find more work at other places. There are reasons why this types of clustering happens in certain industries. There is a reason why there are places like NY Broadway or the London West End. You have a concentration of theaters, actors, directors, musicians, etc. There are other examples of other industries clustered in specific areas. These are eco systems that have developed overtime and are somewhat self correcting as the work ebb and flows. Throw into that balance subsidies where the work is literally forced to go elsewhere and you'll soon destroy it.
If you were a dentist or retail clerk, you could probably work just about anywhere. But if your career is in a specialized field, such as vfx, then chances are you will have to go to a few specific areas. It's hard to be a professional snow skier and live in Florida. You may love to have the state fund a ski resort and fund man made snow for it so you can live in a place you like and still work in your profession but most other industries don't have the luxury of governments throwing money at things that no corporation or business person would support.
So what happens when that same amount of work is now spread worldwide due to subsidies? Now each area is setup with less than enough work and film and vfx crews can no longer easily move from project to project. Instead of having a few concentrated areas of healthy business you now have many more which are all operating in a less than healthy and stable situation. More people have been trained and employed in a specialized business than the business can truly support.
Outsourcing
"If subsidies went away then we may be stuck with Fresno, Waco, or places in China doing the work to keep the labor costs low and we wouldn't be able to do anything about it."
More FUD. Studios do the work where they can get the quality and type of work they need, with little risk, with cost as a factor. Otherwise they'd be in China and India 100% now. And as the new owners of DD have said, most of the vfx work coming out of China now is very poor. We in vfx seem to be more than happy to make up boogeymen even when they don't exist. True, places like China and India will be getting better, especially since companies are more than happy to setup there and train their own replacements.
Subsidies also don't guarantee that they will be nice areas. Another myth is that the current places that are king of the subsidy hill at the moment will always be the king of the hill. They will not be. Economics and politics at some point will move and shift that work and you will have absolutely no control over it. If a place that was the armpit of the world offered better subsidies and the studios thought they could make it work, then your job in Vancouver could be gone in a weeks time.
In terms of companies and people moving to Fresno or Waco - Seriously? Any business can look at some of these lower cost areas and know what it will truly cost to setup there in terms of time and money and it would take a very long time to offset any costs, if at all. And unless there are a number of companies in the area then you don't have an eco system. In those cases you have to cover full employment even during times with few projects. Even ILM had difficulty getting people to come up to the bay area because they were the only game in town for awhile. Even better if vfx companies operated as businesses and refused to setup shops in locations that make no economic sense. And if workers took the same business stance and said no to these types of proposals.
Workers continue to undermine just how much power they have in these situations. The work is 100% dependent on the workers and yet we act like we have no leverage or say in anything. If the majority of workers simply said no, just like if the majority companies had enough guts to say no, then the industry could get back on track. But as long as there are companies and individuals more than willing to undervalue themselves and the rest of the industry, things won't change.
And you're right, there are other problems for the industry and removing subsidies won't solve everything. But subsidies are the largest problem the vfx industry faces. Anybody can come up with a very long list of problems in the vfx industry but many items on that list will be directly or indirectly caused by or linked to subsidies.
And yes, vfx companies could work more with studios and directors to do the work more efficiently. To reduce wasted time and money but again take a look at that situation.
Can a vfx company guarantee to be 60% more efficient so they can do the work less than a subsidized area? When that exact proposal has been made to studio heads, they say fine, make it more efficient in the subsidized area. And the subsidized areas offer something else - money in the bank which is much more alluring than talk about trimming costs and doing things more efficiently. A studio can call their bankers and say we have $100 million movie but Canada (or whatever country/state) has agreed to pay 60% of the costs. You (the bank) can fund a $100 million movie for just $40 million. The bank will say "Where do I sign?"
Take a look from your own perspective. You wish to have a house built. It can be built in a town a little closer and more convenient to work. And the contractor there has said he will work closely with you and can keep the costs down provided decisions are made. You don't know exactly how much savings you can make and you'll have to assume you'll need to get a loan from the bank for the full amount and pay it off.
Or the other option is to build the house in the next town. It's little more of hassle and a little further away but the town has offered to pay up to 60% of the cost of the house if you use contractors there! No strings attached. You can go to the bank and tell them you're buying a $500,000 house for just $200,000. The appraisal shows it as a $500,000 house. Yet you only have to pay off $200,000 The bank will sign you up instantly. You could turn around tomorrow and sell it for the full amount and keep all the profit since the town has offered the money not as an investment but as a totally free gift to you. Free money is fun.
Summary
While there are a lot of problems in the vfx industry, the subsidies are top of the list. And that's the one thing we can't address as companies or as workers. We can work on business models, efficiencies and other issues but we have no control over subsidies. And yet that tends to trump all. vfxsoldier is the only one to have come up with a proposal to try to nullify subsidies so that the industry can become healthier and so companies can make a difference in their own future.
In regard to the business model solution, which could be a big win, which company will be proposing a new model (cost-plus?) to their clients? Because right now vfx companies have refused to join or create a trade association which could potentially have the clout to change the approach. Will a company attempt it on their own and will they have enough leverage to make it happen?
If anyone has other solutions for any of vfx issues please post them. We already have plenty of lists of problems.
Related posts
Visual Effects Tax Incentives / Subsidies
Risk and subsidies
Oh, the mess we’re in!
The Miracle of Visual Effects, will it continue?
Friday, November 30, 2012
DD cutting wages, VFX Union update
Hmm, maybe part of this should be done as a title crawl against a star field.
Digital Domain, one of the largest visual effects companies in the U.S. has been going through some rough times. They were purchased by an investor a few years ago and went public a year ago with the mentality of creating an animation group to make their own movies (the IP that everyone says will save a visual effects company) along with setting up a school for visual effects students in FLorida with students paying tuition to actually work for free on some of the projects Digital Domain Media Group was planning to make there. They chose Florida because they (John Textor, head of DDMG) was able to talk the state and local governments to pay for much of this. And of course that all fell apart and the company went bankrupt... but not before they were able to sell the core of Digital Domain, it's visual effects company, to Galloping Horse (a media company from China) and Reliance (a huge company in India).
And of course this last week the employees there were given ultimatums to work at reduced salaries or consider themselves resigned. They have to decide by Monday. Evidently this applies to even those with contracts and at all ranges of jobs there. This occurred while they are working on large Hollywood projects.
Why was this done? I'm sure 'business' people in the acquiring companies looked at the numbers and wanted them to be even better. The easiest thing in the world to do for company management is to lower wages. That avoids the time and hassle about thinking about how to cut waste and how to be more efficient. Focus on the short term, ignore the long term issues. Forget the fact that the most important part of a visual effects company are the employees. Otherwise it's just a building with computers which anyone can setup.
I'm sure over a year ago most people working there thought everything was going reasonably. Not great and with need for improvement but at least they had jobs and DD was still in a reasonable place. No one would have predicted what actually happened this last year.
Those who signed on to work on the animation project and the 2D to 3D conversions and moved themselves and their families to Florida had no idea the rug would be pulled out from under them with no notice.
Those working at DD in Venice would have no idea that their company would go into bankruptcy and acquire new owners.
Those working at DD had no idea they'd be asked to reduce their wages out of the blue while working on a project.
I'm sure those working at Sony's New Mexico facility had little notice before that was closed. Or the Sony artists who were told they could work in Vancouver or quit.
And Double Negative recently laid off quite a number of people that didn't expect that to happen.
I think the key lesson here is no matter how safe you think you are, even if you're with a large company, even if you're in an area with plenty of film incentives, you may find the rug pulled from underneath you at anytime. You can't keep your head buried in the sand forever. You can't live in a magic bubble. Your incentives will not protect you forever.
Will you be willing to move to China and work in poor conditions at a fraction of your wages? Because that's where it's all headed at this point. The Chinese company that bought DD will be using it to train people to work in China.
And yet most of this seems to fall on deaf ears. According to many commentors on other forums they have no issue moving every year and dragging their families with them for no logical reason. Good luck with that.
In a short time most visual effects artists will have to make a decision if they haven't already.
Those at DD will have to make this decision by Monday.
1. Suck it up, roll with the punches and let the companies and studios disperse you randomly around the world for whatever wages and working conditions they choose.
2. Quit. Give up what you love. Go into something with more stability and less crazy hours.
3. Stand up and do something. Speak up. Group together. Stand together. Join a union. Think of better solutions.
Starting a visual effects company is not a solution.
Welcome to the new world order.
Site by and for Digitial Domain artists in regard to this issue
From VFXSoldier Digital Domain pay cuts
From this blog VFX Artists don't need to be taken advantage of
DD Info from VFXSoldier
Digital Domain purchased
DDGM files for bankruptcy
Digital Domain financial problems
From this blog:
Digital Domain plans to have paying students make up 30% of work force
Visual Effects Industry overview
Pass me the nail
Waiting
What Happened?
--------------------
Reminder for those in Southern California tomorrow:
Understanding Unions: The Good, The Bad & Unknown Of Forming A Visual Effects Collective Bargaining Organization
Be sure to RSVP at VES Event page
Saturday, December 1, 2012 from 9:30AM to 12:00PM
Los Angeles Film School Theater
6363 Sunset Blvd., Los Angeles, CA 90028
Hopefully it will be clear and informative and not be rants about the auto industry and other chestnuts.
[Update 12/3/2012 fxGuide has a write up of the meeting. Video should be available at some time in future at the VES website for members. And yes, the auto industry was mentioned.]
Related:
Visual Effects Guilds
Visual Effects Union, Take 2
Unions, the Middle Class and Visual Effects
Using the nail
Unions, VFX working hours and environments
How do these things tie together?
Digital Domain, one of the largest visual effects companies in the U.S. has been going through some rough times. They were purchased by an investor a few years ago and went public a year ago with the mentality of creating an animation group to make their own movies (the IP that everyone says will save a visual effects company) along with setting up a school for visual effects students in FLorida with students paying tuition to actually work for free on some of the projects Digital Domain Media Group was planning to make there. They chose Florida because they (John Textor, head of DDMG) was able to talk the state and local governments to pay for much of this. And of course that all fell apart and the company went bankrupt... but not before they were able to sell the core of Digital Domain, it's visual effects company, to Galloping Horse (a media company from China) and Reliance (a huge company in India).
And of course this last week the employees there were given ultimatums to work at reduced salaries or consider themselves resigned. They have to decide by Monday. Evidently this applies to even those with contracts and at all ranges of jobs there. This occurred while they are working on large Hollywood projects.
Why was this done? I'm sure 'business' people in the acquiring companies looked at the numbers and wanted them to be even better. The easiest thing in the world to do for company management is to lower wages. That avoids the time and hassle about thinking about how to cut waste and how to be more efficient. Focus on the short term, ignore the long term issues. Forget the fact that the most important part of a visual effects company are the employees. Otherwise it's just a building with computers which anyone can setup.
I'm sure over a year ago most people working there thought everything was going reasonably. Not great and with need for improvement but at least they had jobs and DD was still in a reasonable place. No one would have predicted what actually happened this last year.
Those who signed on to work on the animation project and the 2D to 3D conversions and moved themselves and their families to Florida had no idea the rug would be pulled out from under them with no notice.
Those working at DD in Venice would have no idea that their company would go into bankruptcy and acquire new owners.
Those working at DD had no idea they'd be asked to reduce their wages out of the blue while working on a project.
I'm sure those working at Sony's New Mexico facility had little notice before that was closed. Or the Sony artists who were told they could work in Vancouver or quit.
And Double Negative recently laid off quite a number of people that didn't expect that to happen.
I think the key lesson here is no matter how safe you think you are, even if you're with a large company, even if you're in an area with plenty of film incentives, you may find the rug pulled from underneath you at anytime. You can't keep your head buried in the sand forever. You can't live in a magic bubble. Your incentives will not protect you forever.
Will you be willing to move to China and work in poor conditions at a fraction of your wages? Because that's where it's all headed at this point. The Chinese company that bought DD will be using it to train people to work in China.
And yet most of this seems to fall on deaf ears. According to many commentors on other forums they have no issue moving every year and dragging their families with them for no logical reason. Good luck with that.
In a short time most visual effects artists will have to make a decision if they haven't already.
Those at DD will have to make this decision by Monday.
1. Suck it up, roll with the punches and let the companies and studios disperse you randomly around the world for whatever wages and working conditions they choose.
2. Quit. Give up what you love. Go into something with more stability and less crazy hours.
3. Stand up and do something. Speak up. Group together. Stand together. Join a union. Think of better solutions.
Starting a visual effects company is not a solution.
Welcome to the new world order.
Site by and for Digitial Domain artists in regard to this issue
From VFXSoldier Digital Domain pay cuts
From this blog VFX Artists don't need to be taken advantage of
DD Info from VFXSoldier
Digital Domain purchased
DDGM files for bankruptcy
Digital Domain financial problems
From this blog:
Digital Domain plans to have paying students make up 30% of work force
Visual Effects Industry overview
Pass me the nail
Waiting
What Happened?
--------------------
Reminder for those in Southern California tomorrow:
Understanding Unions: The Good, The Bad & Unknown Of Forming A Visual Effects Collective Bargaining Organization
Be sure to RSVP at VES Event page
Saturday, December 1, 2012 from 9:30AM to 12:00PM
Los Angeles Film School Theater
6363 Sunset Blvd., Los Angeles, CA 90028
Hopefully it will be clear and informative and not be rants about the auto industry and other chestnuts.
[Update 12/3/2012 fxGuide has a write up of the meeting. Video should be available at some time in future at the VES website for members. And yes, the auto industry was mentioned.]
Maybe they'll have pins tomorrow
Related:
Visual Effects Guilds
Visual Effects Union, Take 2
Unions, the Middle Class and Visual Effects
Using the nail
Unions, VFX working hours and environments
How do these things tie together?
Saturday, July 10, 2010
Globalization and VFX
Globalization and VFX
One of the issues facing VFX companies and artists is the issue of globalization. Given the tax incentives and cost of living variance around the world most film studios are looking beyond the borders to find a better price for doing film work, including visual effects.
This blog is read around the world. This article will have a California slant but I’m trying to as always document the current state of affairs in visual effects.
In the golden age of movie making most Hollywood films were shot in Los Angeles with some being done in New York. The studios were setup as film factories to be as efficient as possible. If you finished a film on Friday, you'd start another film on Monday. The stages, sets, back lots and rear projection allowed them to shoot a wide range of film settings within the confines of the studio lot. If you want New York in the 1890's you go to one block of the back lot. If you wanted a1940's Midwest town you'd make a left into that back lot street. Many 'locations' were within easy driving distance of the studios, which also had ranches and other outdoor areas where they could construct western towns or other special settings.
With films like Easy Rider studios started to reconsider what they needed. Many back lots were sold for short-term gains and more true location shooting was done. In some cases if a film could be shot at a lower price in a different location that made sense. In other cases it made sense to go to another location if that truly was the location in film.
When films like Star Wars and Close Encounters were filmed the majority of visual effects were done in Los Angeles. When ILM moved to northern California that spread the work a bit but still the majority of the big, Hollywood vfx work was done within California. VFX companies were on a relatively level playing field. The jobs were awarded based on ability, quality and costs.
As the digital age of visual effects got underway some countries and states started offering tax incentives that included vfx. The digital age enabled the use of computers and software to be setup anywhere. VFX artists can be brought in from anywhere else and setup with little effort. VFX artists can be trained in the basics locally. The internet allows images to be sent anywhere quickly for work to be done and reviewed anywhere else. The studios, always eager to save money on things that weren’t under their umbrella, were more than happy to start sending out work. In their view, vfx are a commodity that can be done anywhere.
At this point a number of countries offer tax incentives, rebates or even pre-investments in films in exchange for a certain amount of work to be done in that country. Various states also have tax incentives as well to try to get millions of dollars of production costs to come to their state. The details vary greatly and can be a smart or bad investment depending on the details.
From the various governments viewpoint (state and country) an incentive means that they can draw film production to their location. A film production can bring in millions of dollars to a given locale fairly quickly. A factory doesn’t have to be built over time before people can be employed and there usually aren’t a lot of ecology studies required. All the products, services and rentals that can be had are paid for by production (hotels, catering, car rentals, hardware stores, etc). The crew spends a fair bit of their money locally on things like restaurants, bars and leisure time activates. If a location is portrayed well it may mean extra tourists in the future. When long-term incentives are in place then an entire film studio infrastructure can be built in that location and crewmembers of all types can be developed, including visual effects artists. Many third party companies develop to service the motion picture industry at these locations.
Companies in Vancouver, London and similar locations are doing well since they don’t have to compete on a level playing field. With a 20% or more savings via the government it’s difficult for vfx companies in the U.S. to compete directly.
From the studio perspective their main aim is to do a film as cheaply as possible and still make it work. If the film is a major VFX tent pole movie with a lot of difficult or new vfx then they will pay top dollar to make it and to ensure it will be done on time and to the quality required. But this only applies to those shots and sequences they feel need to be done at expensive vfx companies. One step down from those types of shots (certainly simpler compositing and roto shots) or lower level vfx film and price becomes one of the highest priorities.
A Hollywood studios first choice is usually Vancouver simply because it’s in the same time zone, is just a 3 hour flight away and they all speak English there. Second choice would probably be London since it’s the next closest location, they speak English and studios executives and key personal enjoy the London life. Next would be Australia. (New Zealand with Weta is primarily on the big projects and not so much a cost saving measure). India, China and other locations are further down on the list if the studio executives and key personnel think they will have to go there. If they don’t have to personally travel there, then the studio is all for sending the work anywhere in the world.
Obviously some studios now have infrastructures setup in various locations and their choice will be dictated by their established suppliers. You’ll notice most editing and sound mixing still happens in the U.S. since the filmmakers and studios spend a fair bit of time involved directly in these activities. They’re also not at the same level of expense as vfx.
Some people think that the studios won’t go anywhere just based on price but it’s very dependent on the nature of the work. There was an article a few months ago where most of the studios were now sending out their subtitling work (as done on the DVD’s). The cost savings to the studio? $600. A $100 million dollar movie and they send out the subtitling to a different country to save $600. I’m not a studio accountant but I suspect there might be a few other budget items that would yield larger savings but since subtitling (and vfx) are done by third parties it’s an easy win for any studio person to make that decision.
Unfortunately the location that has the most to lose (and gain) from subsidies is California. They have done too little, too late. A large revenue stream for California (especially southern California) comes from movies. There are a lot of people employed in this business and they in turn spend their money locally on services and products.
Runaway product continues to suck out revenues from California and unfortunately most of the California legislation can’t get a simple grasp of the obvious. Motion pictures are one of the U.S.’s largest exports.
People (and politicians) assume since movies bring in huge revenue that everyone who works in movies are ‘gazillionairs’ to quote another internet forum. What they forget is the vast majority of people involved in movie making are making working wages. The median income for writers in the Writers Guild is $44,000 a year. Most VFX people make more than this but if it’s averaged over all vfx artists and dry spells it may not be as much as you think.
Some US companies are opening satellite companies in other countries that are able to offer a better price break. There are multiple arrangements. In some cases they simply outsource the work they feel can be outsourced such as Roto. In other cases they have a full working relationship where the foreign company does a fair bit of real work on the actual product. Some companies operate independent shops in different countries that can be leveraged, as the work requires it.
Part of the issue is what is to be gained for everyone involved. If the focus of the studios is purely on the cost factor, having a US based VFX company doesn't necessarily gain them much. They're willing to pay top dollar today for certain projects with a lot of R&D but what happens in a few years when those techniques and software are more readily available in off the shelf products? If your California vfx company has some specialty (water, fire, etc) what happens when that’s all in the next major update of a software package? Will you continue to get work? What happens when vfx production management elsewhere is brought up to the same level? Will the studios continue to be willing pay more to a U.S. company to act as an intermediate?
Will most of the work being done in the US move out of the country and the only thing remaining be the vfx company executives and accountants?
If you live in a country that is currently doing well (healthy vfx production) because of the incentives or reduced expenses what happens when that changes? At some point your government may reduce or eliminate the incentive. Another country may offer a higher incentive. The world and local economy may increase the cost of doing business such that the incentives aren’t enough or another location may end up being even a lower expense because of changing cost of living factors. The studios will quickly move to the lowest priced area that can provide them what they need. Can you and the company you work for compete on a level playing field if it had to? Is your company truly efficient? Does it have the talented artists and R&D people required?
If you live in California (or starting here) what can you do?
1. You can work at some of the larger companies such as ILM, DD, etc. These still get large projects but they still lay off massive amounts of people and still go through cycles of feast or famine work so there’s no guarantee of long-term employment even if you’re considered on staff.
2. Consider working at a small to mid-size shop that continues to maintain a reasonable balance of work. Many of these do all television work (which is usually done here or in Vancouver) or that at least do some television work to help balance the work.
3. Consider moving out of country to where the actual work is being done. This sounds like a simple fix to anyone who doesn’t consider the implications.
a. There are already people working there. Are there enough job openings to make it worth moving there?
b. How long is the project? Is this a permanent move or will you have to shuffle off again in few months to somewhere else?
c. Can you qualify to work elsewhere? Many countries require work visas and other paperwork. Some incentives require crewmembers to be living in the country for a given length of time. Just because there is technical and creative work elsewhere doesn’t mean you can just move there and start working.
d. Can you work at reduced wages if that’s the reason the work is located in that country? If you’re at a location that is getting work based mainly on the cost of living can you work there yourself at the reduced rate and feel comfortable? Does the local taxes and other issues reduced the income even further?
e. What happens if you have loved ones, family, house or other connections here? If you’re young and single it may be fun and exciting to move to another location. For those of us with families do we sell the house and uproot all family members (taking children out of school and away from their friends) to go work in another country? Do we leave the family for long periods of time? (6 months to a year or longer) Do we try to rent out the house and hope to return someday?
It’s a sad state of affairs when experienced vfx artists, with all of their creative and technical skills, are likened to migrant farm workers moving to where the work is. At least there’s a real reason farm workers move is because of locations of the crops and growing seasons. In the case of the vfx artist a cubicle is a cubicle, no matter where in the world it’s located. The only reason for moving is purely at the whim of the counties incentives and the studios.
Unfortunately I can’t offer any real solutions. The unions can’t prevent work from moving out of the country. The politicians seem to be the few who have much control over this so they’re the ones to contact. I know that there are some organizations trying to make this better. If you’re in a location doing well then enjoy it while you can. If you’re in California it’s likely you’ll have to do what you have to do. There are now some vfx supes that spend months shooting in one country and then do the post in another country and spend most of the year away from their families.
Will there be enough of a demand and balance that all the vfx companies and artists throughout the world can keep reasonably busy and can enjoy the fruits of their labor?
(Links added 7/12/10 based on VFX Soldier comment posting. See comments for my basic response at this time. The links all make interesting reading and really get to the heart of the matter.)
VFX Soldier VFX Subsidy War Grows Into Global Trade War
Update 8-9-2010
Every week there seem to be new updates on state or country incentive programs.
Clint Eastwood makes UKFC plea - Entertainment News, Top News, Media - Variety
Here's a snippet:
Scottish-born producer Iain Smith, whose credits include "The A-Team," "Children of Men" and "Local Hero," expressed the need for the government to quickly form a plan or risk producers looking elsewhere to shoot films.
"While we have a fantastic infrastructure, we have to protect that as much as we can and in order to do that we have to compete against industries in other countries," said Smith. "There's no doubt we need to tighten purse strings but we need to be careful we don't asphyxiate the film industry in general."
But in an article written for Blighty's Observer newspaper on Sunday, culture secretary Jeremy Hunt hit back at critics.
"If we are going to face budget cuts I have a duty to ensure that taxpayers' money is spent where it gets the most bang for its buck," he said. "It is simply not acceptable in these times to fund an organization like the U.K. Film council where no fewer than eight of the top executives are paid more than £100,000 ($160,000)."
Hunt added: "Stopping money being spent on a film quango is not the same as stopping money being spent on film."
"This new credit will give New York post production services a much needed competitive edge," explains Rich Friedlander, co-founder of Brainstorm Digital. "We increasingly saw visual effects post work going to Canada thanks to their their Digital Animation or Visual Effects tax credit (DAVE). This new program will allow work that was filmed in New York to stay through its entire production cycle. It's a major move that will attract and keep top talent here in state."
One of the issues facing VFX companies and artists is the issue of globalization. Given the tax incentives and cost of living variance around the world most film studios are looking beyond the borders to find a better price for doing film work, including visual effects.
This blog is read around the world. This article will have a California slant but I’m trying to as always document the current state of affairs in visual effects.
In the golden age of movie making most Hollywood films were shot in Los Angeles with some being done in New York. The studios were setup as film factories to be as efficient as possible. If you finished a film on Friday, you'd start another film on Monday. The stages, sets, back lots and rear projection allowed them to shoot a wide range of film settings within the confines of the studio lot. If you want New York in the 1890's you go to one block of the back lot. If you wanted a1940's Midwest town you'd make a left into that back lot street. Many 'locations' were within easy driving distance of the studios, which also had ranches and other outdoor areas where they could construct western towns or other special settings.
With films like Easy Rider studios started to reconsider what they needed. Many back lots were sold for short-term gains and more true location shooting was done. In some cases if a film could be shot at a lower price in a different location that made sense. In other cases it made sense to go to another location if that truly was the location in film.
When films like Star Wars and Close Encounters were filmed the majority of visual effects were done in Los Angeles. When ILM moved to northern California that spread the work a bit but still the majority of the big, Hollywood vfx work was done within California. VFX companies were on a relatively level playing field. The jobs were awarded based on ability, quality and costs.
As the digital age of visual effects got underway some countries and states started offering tax incentives that included vfx. The digital age enabled the use of computers and software to be setup anywhere. VFX artists can be brought in from anywhere else and setup with little effort. VFX artists can be trained in the basics locally. The internet allows images to be sent anywhere quickly for work to be done and reviewed anywhere else. The studios, always eager to save money on things that weren’t under their umbrella, were more than happy to start sending out work. In their view, vfx are a commodity that can be done anywhere.
At this point a number of countries offer tax incentives, rebates or even pre-investments in films in exchange for a certain amount of work to be done in that country. Various states also have tax incentives as well to try to get millions of dollars of production costs to come to their state. The details vary greatly and can be a smart or bad investment depending on the details.
From the various governments viewpoint (state and country) an incentive means that they can draw film production to their location. A film production can bring in millions of dollars to a given locale fairly quickly. A factory doesn’t have to be built over time before people can be employed and there usually aren’t a lot of ecology studies required. All the products, services and rentals that can be had are paid for by production (hotels, catering, car rentals, hardware stores, etc). The crew spends a fair bit of their money locally on things like restaurants, bars and leisure time activates. If a location is portrayed well it may mean extra tourists in the future. When long-term incentives are in place then an entire film studio infrastructure can be built in that location and crewmembers of all types can be developed, including visual effects artists. Many third party companies develop to service the motion picture industry at these locations.
Companies in Vancouver, London and similar locations are doing well since they don’t have to compete on a level playing field. With a 20% or more savings via the government it’s difficult for vfx companies in the U.S. to compete directly.
From the studio perspective their main aim is to do a film as cheaply as possible and still make it work. If the film is a major VFX tent pole movie with a lot of difficult or new vfx then they will pay top dollar to make it and to ensure it will be done on time and to the quality required. But this only applies to those shots and sequences they feel need to be done at expensive vfx companies. One step down from those types of shots (certainly simpler compositing and roto shots) or lower level vfx film and price becomes one of the highest priorities.
A Hollywood studios first choice is usually Vancouver simply because it’s in the same time zone, is just a 3 hour flight away and they all speak English there. Second choice would probably be London since it’s the next closest location, they speak English and studios executives and key personal enjoy the London life. Next would be Australia. (New Zealand with Weta is primarily on the big projects and not so much a cost saving measure). India, China and other locations are further down on the list if the studio executives and key personnel think they will have to go there. If they don’t have to personally travel there, then the studio is all for sending the work anywhere in the world.
Obviously some studios now have infrastructures setup in various locations and their choice will be dictated by their established suppliers. You’ll notice most editing and sound mixing still happens in the U.S. since the filmmakers and studios spend a fair bit of time involved directly in these activities. They’re also not at the same level of expense as vfx.
Some people think that the studios won’t go anywhere just based on price but it’s very dependent on the nature of the work. There was an article a few months ago where most of the studios were now sending out their subtitling work (as done on the DVD’s). The cost savings to the studio? $600. A $100 million dollar movie and they send out the subtitling to a different country to save $600. I’m not a studio accountant but I suspect there might be a few other budget items that would yield larger savings but since subtitling (and vfx) are done by third parties it’s an easy win for any studio person to make that decision.
Unfortunately the location that has the most to lose (and gain) from subsidies is California. They have done too little, too late. A large revenue stream for California (especially southern California) comes from movies. There are a lot of people employed in this business and they in turn spend their money locally on services and products.
Runaway product continues to suck out revenues from California and unfortunately most of the California legislation can’t get a simple grasp of the obvious. Motion pictures are one of the U.S.’s largest exports.
People (and politicians) assume since movies bring in huge revenue that everyone who works in movies are ‘gazillionairs’ to quote another internet forum. What they forget is the vast majority of people involved in movie making are making working wages. The median income for writers in the Writers Guild is $44,000 a year. Most VFX people make more than this but if it’s averaged over all vfx artists and dry spells it may not be as much as you think.
Some US companies are opening satellite companies in other countries that are able to offer a better price break. There are multiple arrangements. In some cases they simply outsource the work they feel can be outsourced such as Roto. In other cases they have a full working relationship where the foreign company does a fair bit of real work on the actual product. Some companies operate independent shops in different countries that can be leveraged, as the work requires it.
Part of the issue is what is to be gained for everyone involved. If the focus of the studios is purely on the cost factor, having a US based VFX company doesn't necessarily gain them much. They're willing to pay top dollar today for certain projects with a lot of R&D but what happens in a few years when those techniques and software are more readily available in off the shelf products? If your California vfx company has some specialty (water, fire, etc) what happens when that’s all in the next major update of a software package? Will you continue to get work? What happens when vfx production management elsewhere is brought up to the same level? Will the studios continue to be willing pay more to a U.S. company to act as an intermediate?
Will most of the work being done in the US move out of the country and the only thing remaining be the vfx company executives and accountants?
If you live in a country that is currently doing well (healthy vfx production) because of the incentives or reduced expenses what happens when that changes? At some point your government may reduce or eliminate the incentive. Another country may offer a higher incentive. The world and local economy may increase the cost of doing business such that the incentives aren’t enough or another location may end up being even a lower expense because of changing cost of living factors. The studios will quickly move to the lowest priced area that can provide them what they need. Can you and the company you work for compete on a level playing field if it had to? Is your company truly efficient? Does it have the talented artists and R&D people required?
If you live in California (or starting here) what can you do?
1. You can work at some of the larger companies such as ILM, DD, etc. These still get large projects but they still lay off massive amounts of people and still go through cycles of feast or famine work so there’s no guarantee of long-term employment even if you’re considered on staff.
2. Consider working at a small to mid-size shop that continues to maintain a reasonable balance of work. Many of these do all television work (which is usually done here or in Vancouver) or that at least do some television work to help balance the work.
3. Consider moving out of country to where the actual work is being done. This sounds like a simple fix to anyone who doesn’t consider the implications.
a. There are already people working there. Are there enough job openings to make it worth moving there?
b. How long is the project? Is this a permanent move or will you have to shuffle off again in few months to somewhere else?
c. Can you qualify to work elsewhere? Many countries require work visas and other paperwork. Some incentives require crewmembers to be living in the country for a given length of time. Just because there is technical and creative work elsewhere doesn’t mean you can just move there and start working.
d. Can you work at reduced wages if that’s the reason the work is located in that country? If you’re at a location that is getting work based mainly on the cost of living can you work there yourself at the reduced rate and feel comfortable? Does the local taxes and other issues reduced the income even further?
e. What happens if you have loved ones, family, house or other connections here? If you’re young and single it may be fun and exciting to move to another location. For those of us with families do we sell the house and uproot all family members (taking children out of school and away from their friends) to go work in another country? Do we leave the family for long periods of time? (6 months to a year or longer) Do we try to rent out the house and hope to return someday?
It’s a sad state of affairs when experienced vfx artists, with all of their creative and technical skills, are likened to migrant farm workers moving to where the work is. At least there’s a real reason farm workers move is because of locations of the crops and growing seasons. In the case of the vfx artist a cubicle is a cubicle, no matter where in the world it’s located. The only reason for moving is purely at the whim of the counties incentives and the studios.
Unfortunately I can’t offer any real solutions. The unions can’t prevent work from moving out of the country. The politicians seem to be the few who have much control over this so they’re the ones to contact. I know that there are some organizations trying to make this better. If you’re in a location doing well then enjoy it while you can. If you’re in California it’s likely you’ll have to do what you have to do. There are now some vfx supes that spend months shooting in one country and then do the post in another country and spend most of the year away from their families.
Will there be enough of a demand and balance that all the vfx companies and artists throughout the world can keep reasonably busy and can enjoy the fruits of their labor?
(Links added 7/12/10 based on VFX Soldier comment posting. See comments for my basic response at this time. The links all make interesting reading and really get to the heart of the matter.)
(If you're viewing this on a page with other posts then please click on the Comments link below to see the comments and responses)
Update 8-9-2010
Every week there seem to be new updates on state or country incentive programs.
Clint Eastwood makes UKFC plea - Entertainment News, Top News, Media - Variety
Here's a snippet:
Scottish-born producer Iain Smith, whose credits include "The A-Team," "Children of Men" and "Local Hero," expressed the need for the government to quickly form a plan or risk producers looking elsewhere to shoot films.
"While we have a fantastic infrastructure, we have to protect that as much as we can and in order to do that we have to compete against industries in other countries," said Smith. "There's no doubt we need to tighten purse strings but we need to be careful we don't asphyxiate the film industry in general."
But in an article written for Blighty's Observer newspaper on Sunday, culture secretary Jeremy Hunt hit back at critics.
"If we are going to face budget cuts I have a duty to ensure that taxpayers' money is spent where it gets the most bang for its buck," he said. "It is simply not acceptable in these times to fund an organization like the U.K. Film council where no fewer than eight of the top executives are paid more than £100,000 ($160,000)."
Hunt added: "Stopping money being spent on a film quango is not the same as stopping money being spent on film."
|
"This new credit will give New York post production services a much needed competitive edge," explains Rich Friedlander, co-founder of Brainstorm Digital. "We increasingly saw visual effects post work going to Canada thanks to their their Digital Animation or Visual Effects tax credit (DAVE). This new program will allow work that was filmed in New York to stay through its entire production cycle. It's a major move that will attract and keep top talent here in state."
Tuesday, January 12, 2010
More VFX wage issues
More bad news for Visual Effects Artists around the world. (and bad news for VFX vendors as well).
Keep in mind that most of the top money making movies of all time are heavy VFX movies. (Titanic, Avatar, Star Wars, Matrix, etc)
Consider joining the Visual Effects Society to help provide a more united front.
Via Twitter' from neonmarg
Visual Effects Industry gets weaker everyday
Working in China doing VFX
Keep in mind that most of the top money making movies of all time are heavy VFX movies. (Titanic, Avatar, Star Wars, Matrix, etc)
Consider joining the Visual Effects Society to help provide a more united front.
Via Twitter' from neonmarg
Visual Effects Industry gets weaker everyday
Working in China doing VFX
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