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Getting Our Piece of the Pi…for Real

I've been fairly silent on the VFX situation amid all the hubbub lately and I think I'm going to catch a lot of heat for this post. But I have to say it like I see it.

I'm not happy with any of this. All the talk of unionization is not productive. It's a lot of posturing without much power. You only have power with the studios when you have something they want or need. We tend to keep thinking we're in the reality of a decade ago when Los Angeles owned the VFX business and L.A. facilities could demand often-outrageous sums for it. In the beginning it cost a bloody fortune to lease those $2 million Cray supercomputers that wouldn't even hold a candle to a $2,000 desktop system today. To say things have changed is an understatement. Hollywood studios don't really need a lot of what local VFX houses are offering. They can get it cheaper elsewhere. So what good is a union going to do? None. The most likely outcome will be the unions forcing even more VFX houses to go under.

Follow my thinking. (And, yes, I've been a union member in the past.) OK — union recruiters picket the VFX houses, trying to garner members. The houses are upset by this. Let's say the picketers get enough people to join. They gain power over that one VFX house. Now what do they do? What unions always do — they start making demands on behalf of their members. Note: those demands usually have a lot to do with higher pay. Pay is already pretty damn high for skilled VFX workers. Now remember that most of the L.A. houses are barely surviving, with inadequate overhead and profits between 0 and 5% for those making a profit. Many are not. The houses can't meet the demands — they just can't, because they don't know how to deal effectively with the studios. They can't charge what they need to be charging because they're in a life-and-death battle with their competition in L.A. and abroad. They don't have bargaining power. 

The union strikes to get their attention. The house goes under, because they were just barely making payroll as it was. OK, now the union has 80 new VFX workers on the street. They put them to work recruiting more people into the union. More shaky houses go down in flames.

The surviving houses are now under enormous pressure from the union to provide both reasonable and unreasonable things to its members. They have to go to the studios and make demands. They don't have a trade association, so those demands fall on deaf ears. The studios simply look for alternative resources. Now the surviving VFX houses are in severe decline, except for a very few special places.

The studios will hate this scenario. I have it on good authority that the majors like having reliable VFX houses close by. It only makes sense. It can be hell on client-side VFX supes trying to stay on top of shows in six countries across two days and all hours. Communication isn't the best. It's a crazy way to work.

You have heard it before — this is a risky, collaborative business. The director may take the credit for a movie, but we all know that thousands of people are involved in a major production. Everybody wants a piece of that Pi. People have suggested profit participation. That's kind of a joke in Hollywood. Studios are run by bean counters who may not know entertainment, but they know how to hide the profits on the biggest money makers. Profit participants rarely see a dime. (As I recall even Titanic still has yet to make a profit—on paper.) But IMHO the studios are not out to victimize VFX workers. They are out for themselves. We need to find a way to exploit that. We need to be smart. We need to make studio support of local VFX houses in their own best interest and make them know it.

Who will survive? Exactly — the smart VFX houses I've been talking about all along. The ones that are thriving today. The ones who have what the studios need and can't find in China or India or Malaysia or Mexico. They have cutting-edge, proprietary technology and the very best talent. They provide more than just reasonable pay. They provide their people with a lifestyle. The studios can settle for less and go elsewhere, or they can pay a fair price to get the good stuff. And they do. I've only talked about two local outstanding VFX houses in LA. But there are others. Sony Pictures Imageworks is still alive and kicking too.

Flexing brute-force muscles is not the answer. The answer is: It's a new world. Foreign VFX houses are really good and more competitive and they've become very reliable. Strangely, they're supporting us here in L.A. — many have gone green on Facebook! There was a sympathy rally in Vancouver. On the surface, that makes no sense because it means they support work staying in LA. But I think they are sincere. We are all brothers and sisters here. It's about flexing our skills and technical might, not trying to create an artificial market that doesn't exist. You can't create it. Work will stay in L.A. on the merits of the workers and the houses. The ordinary work will go away, and we can't depend on it for long, because our friends abroad are getting really, really smart and skilled.

So what is our piece of the Pi? Well, I'm sad that Rhythm & Hues is in trouble. I have been a fan of R&H for many years and its head, John Hughes, is an old friend of mine. It kills me that those people did such amazing, Academy Award-winning work and still are without jobs as I type. John did a lot of things right, but his people clearly made mistakes. I don't know what they were, but they caught up to R&H. Perhaps it got too big, I don't know. I'm just extremely depressed to see it go. Our piece of the Pi is going to be fair wages, good working conditions, job security and reasonable benefits. It's going to be a collaborative effort among the VFX houses and the people and, yes, even the studios.  I don't know the how yet, but it has to happen. We can't keep going on like this.

Well, that's my two cents. If you haven't already, read my previous posts on this subject…Scott Ross, Jenny Fulle and my look at two very successful VFX Houses — Luma Pictures and ScanlineVFX — in these difficult times.

I'm absolutely sure many of you disagree with me, and this is only my completely biased view. Let's hear what you have to say. Leave a comment below.

57 Comments

Categories: Article, Blog, VFX/Animation
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  • http://www.facebook.com/rick.dupea Rick V Dupea

    Dead right. Innovation, creativity, superior product are the ONLY ways to survive this economy. Making greater demands without providing a greater service is financial suicide. We should be focusing on providing more value, more reliability and drawing more international high end work and piece work for the upcoming indy market. I don’t hate unions, just stupid business decisions that produce bad results. I’d rather have a job and no union than a union and no job.

    • Peter Plantec

      I’m with you Rick. Well said. America built its reputation on quality and innovation…we taught much of the world how to do it. Now we’re teaching the world how to do VFX. But we can still be the quality and innovation leaders. Lets compete on our strong merits.

  • Anonymous

    Flexing union muscle in order to extract more money is the way Unions increase their dues collection, which they put to various purposes, many political and some (I assert) nefarious. That’s their game. This drives up the cost of US-based work, which is counter-productive in a global market. This is a key reason union-ridden industries simply are not competitive and some have even received billions of dollars of taxpayer money to keep their doors open – without the taxpayers receiving a product in exchange for their “purchase”. As you say, unionization will do more damage to US-based VFX houses.

    There is a reason Thomas Jefferson, upon election as President, eliminated all internal taxation and instead collected tariffs on imports. It was to minimize the cost of doing business inside the US, making productive Americans wildly profitable and prosperous, thus giving them the money to purchase luxury items from abroad that were taxable. This strategy created a flood of Federal income far beyond what the Federal government needed. The short version: Reduced internal cost of doing business combined with tariffs on foreign goods and services makes American producers prosperous and is a great benefit to the American economy.

    American companies face the tough challenge of artificially increased costs of doing business, making foreign companies far more competitive and desirable for the same kind of work. Unionization would be another strategy to drive up costs for American-based companies, not to make them more competitive.

    While Jefferson’s strategy may not be suitable to feed today’s bloated government budgets – it does demonstrate a direction to make American producers more competitive, which I presume is our desired goal.
    Be careful. Do not take steps that will drive up your cost of doing business. That’s the wrong direction to go.

    • Peter Plantec

      Well said S2T! I tend to agree that making it hard on the houses drives up costs and makes local houses less competitive…forcing vfx contracts elsewhere.

  • My Opinion

    Agree agree agree. Unions will destroy us all. Too many people spend way too long bitching about the state of things, rather than looking at a real solution to the problem. Sure, it is somewhat out of the hands of the individual VFX houses to a degree, but one of the major problems is that we don’t rally together… we undercut and fight for the meager spoils. Let’s stop that and create a real ‘want’ for the studios. Also, houses still put a lot of credit in super expensive gear, when the reality is that a lot can still be done on those $2000 machines. There is often no need for the $25k – $250k suites apart from showing off to the client. That mind set needs to change if we want to make profit.
    This kind of article and talk needs to permeate this industry wide problem. Let’s turn this around… And stop undercutting each other!!!

    • Peter Plantec

      Thanks MO…I agree. The studios have a big advantage in this game setting the houses against each other.

  • anon

    Peter, your anti-union screed is unhelpful and uninformed. How much longer do US workers continue to subsidize the Hollywood studios by forfeiting retirement benefits and access to healthcare? Somehow, despite your nonsense conspiracy theories, everyone else in the credits has done just fine in a union. For small houses, it may not make sense at this time. But if you are a large facility that is owned by a studio, like ILM and Imageworks, then there is **0** reason you shouldn’t be in one. ILM was for many years, and Sony Pictures Animation already is and has been since their formation.

    • Peter Plantec

      Hi Anon. I appreciate your input. There is one problem. Vfx is not the same as actors or Directors or Producers. It is portable and they are not. Guilds work when you have a bargaining position. Sony and ILM are studio owned facilities. Different animal. Portable means its not essential that the work go to locals….the guilds control things that have to be done in LA. That works. Unionizing vfx houses dosen’t work at all. It makes the work go away. There is no bargaining chip. Oh and I take umbrage at calling my blog screed….I think it’s pretty lively.

  • sageface

    So suppose R&H would have been a union shop… would that have changed anything?Sure the guys that got laid off would have healthcare, but they would still be out of work and there would probably been more of them.

    VFX is a different monkey than the traditional freelance based film industry that the current Union paradigm supports. They can apply direct pressure on behalf of their members to the Employer, the studios. Apply that to VFX and you are hitting the VFX shops, who, as Peter says, are already running near empty as it is.

    • Anthony

      One thing I don’t understand is how is all this breakdown in the VFX industry is going to help the studios? Surely they can’t be thinking, ” Oh well isn’t it a shame their all falling apart out there, just as well it doesn’t effect us”.

      What, do they just aim to get the lowest price without realizing they are helping this mess happen? Isn’t it in their interest to have a solid VFX industry? How long do they think they can continue a system of expecting the lowest price before it ultimately effects them?

      • sageface

        In my experience, there is often a disconnect between the process of raising the capital and the creative needs of post production. The financing of a film usually occurs so far in advance of the post process making it difficult to forecast the real numbers for VFX production. The shoot happens, things change creatively as a result of hundreds of decisions that are being made during production… SHOOTS GO OVER BUDGET….. all of this impacts the available budget dollars for VFX at the end.

        Some productions are large enough, like the Hobbit or Avatar to have gotten more thoughtful consideration earlier on in the budget process, but most push VFX to the tail end, leaving it with the remainder of a budget, already reduced by other overages and creative changes.

        The accountants that put the deal together have already moved on other projects and are extremely unlikely to revisit the process, after all, they assured all the vested interests that his could be done for $X.

        Well what about paying VFX vendors with backend points when the budgets are tight? Almost impossible… all the points have been accounted for prior to day one of production and even if you could get your hands on a few, they would never be based on gross. There will always be various things that chip away at the “Net” profit, making the backend negligible, not to mention how long it actually takes to even get it the payments…

        Nobody WANTS to make their choices solely on price as that usually doesnt = quality, unfortunately its not always avoidable, in the current paradigm.

        • Peter Plantec

          Thank you for your words of wisdom Sageface. Whoever you are I sincerely appreciate your input.

    • Peter Plantec

      Thanks Sageface. One of the factors that did in R&H was their generosity to their artists. Their overhead was enormous keeping people on when there was no work, giving overly generous cumulative time off, sabbaticals, insanely broad and generous medical coverage, etc. Their COB got so high it became unsustainable. People got spoiled there IMHO. R&H did a lot of things right for their people, perhaps too much.

  • http://www.facebook.com/ergin.kuke Ergin Kuke

    Not like! Union or not..something needs to be done. The time to discuss what that is, is later. Not now. For once there is a boiling movement, a something forming. Now is not the time to undermine it with rhetoric. There are many points in this writing that are self contradictory

    • Peter Plantec

      Hi Ergin…explain the self contradictory points….seriously. Also, we have the pot boiling, but for what? Now is the time typo discuss these issues and look for answers. Something is forming, but it is disorganized and without focus. We need focus, determination and courage to do what must be done to survive….a boiling movement won’t accomplish any of that IMHO.

  • Anonymous

    But unions work fine in other movie production segments… so why not Visual Effects?

    • People are confused

      Freelance production crew members are employed directly by producers while VFX artists rarely are (apart from VFX sups and producers). Instead, they are employed by companies who provide fixed-bid services for the producers. “We’ll provide 100 shots based on your specifications for X.” The concept is that if the VFX company finds a hidden efficiency or ‘builds a better mousetrap’ they benefit, while the producer pays the market rate for the service. It’s not the only way to do business but “Cost-Plus” (you pay Cost + negotiated profit %) has fallen out of favor for several reasons – VFX shops don’t appreciate the client digging into their books and producers need to mitigate their risk.

      While a union might be able to improve the situation for the individual artist by providing a mechanism for portable health coverage, retirement accounts and so on, it would most certainly increase the cost of running a VFX company. One could assume that the producers would simply pay more for this service to compensate for this increased cost or you can imagine that they find have a responsibility to explore lower cost alternatives.

      Perhaps the union could compel (at least) the major studios to only use “union signatory shops.” This is certainly not unprecedented and if that were the case, I suppose the studios would have no choice to pay more to cover the workers.

      However, I submit that even if that were to happen, it would not resolve the kinds of issues that pushed DD or R&H into bankruptcy. Those artists who lost their jobs would have lost them just the same both because the fundamental business model for VFX companies is flawed and because the management of each of those companies made fatal strategic errors.

      Everyone is mixing up the issues. California-based VFX workers certainly have things to complain about in a time of globalization. They’re being forced to compete with workers around the world, often with the disadvantage of being on the wrong end of a government subsidy. But both R&H and DD were taking advantage of low-cost foreign labor markets and government subsidies and they still ran into trouble. A VFX worker’s union wouldn’t have helped one bit.

      • Peter Plantec

        Thank you “People RC”. I don’t know who you are but you spout wisdom. Clearly you know this business well. Bravo!

      • Heikki Anttila

        I agree mostly. But as the original article it does not address how do the companies get a better piece of the pie. The other aspects of film production have a better deal as they represent parts of the business that got established way before the fierce global competition etc.

        How do we improve the negotiation point of VFX houses globally is the question. Yes we should keep healthy competition and market aspects in there but current system is faulty too where there is money to be shared but it gets split in an unreasonable manner. And for sure unions have been part of why the other sub industries don’t get ripped of in a similar manner.

        DD was a bit of a special case with their conquer the world mission (smelled like pump and dump but I don’t know the facts). But houses like ILM, Weta R&H etc. should justly turn a decent profit as they are pillars of the whole business – yet they all have razor thin margins.

    • Peter Plantec

      If VFX could only be done in LA, then a union would work. Bit it can and is being done everywhere. A union would have no bargaining power at all. Read my article above and you shouldn’t have that question.

  • Scott Ross

    I respectfully disagree w much of your underlying premise. First of all, I hope that the rally yesterday was not about keeping jobs in LA. The cry for VFX workers needs to be a universal cry. From the out of work in LA and London, to the soon to be put of work in Vancouver, to the VFX facilities all over the planet, to the Indian VFX worker that has been treated like a slave… the entire VFX industry needs to come together and solve the issue that the Motion Picture Studio does not compensate VFX facilities appropriately.

    Frankly, I don’t blame the Studios. I am not trying to vilify them at all. After all, they are business people just trying to make the best product for the least amount of money. If anyone is to be blamed, it is us, the VFX industry for allowing our goods and services to be sold at unbelievably discounted rates. Where the VFX facility takes most of the risk. Where we eat each other alive by dropping our prices so low that we cannot sustain the lean times. It is not the big bad Movie Studio that doesn’t respect us (and they don’t) that has caused our undoing, it is us that doesn’t respect us that has.

    As for a Union…. As you know I believe a Union will only exacerbate the situation. A Union will cause the prices to go up at Union shops thereby forcing the Studios to the lowest price vendor, the non union shop. A Union can only work if the Union were an international effort where by all the VFX workers from around the planet were represented by the same Union w the same P&W structure and fees. I don’t see that happening.

    I do agree w Peter that the shops with world class artists and world class technology will continue to do work, however if they continue to get paid/bid in the manner that they have been, they too will surely face VFX extinction. And the shops that do the rote work will continue to lose their projects to the lowest cost provider and that will always be the shop that has the lowest cost labor force.

    But….. I have a dream (it worked before!) that all of the owners/managers/CEO’s of VFX shops form an International Trade Association that could deal with the studios, that would allow the shops to regain their pride, that would ensure that our industry continues to survive. I for one have been doggedly pursuing this effort for a very long time. I ask for all of you to demand that your bosses form a coalition and start to organize such a Trade Association.

    As someone once said: “We seem to be made to suffer. It’s our lot in life.”

    I don’t agree.

    I’d rather consider and paraphrase….A Trade Association, it’s our only hope.

    • Peter Plantec

      I appreciate your input Scott. I actually agree with much of what you say. I feel a union could only work if the houses had some clout and that would be a trade association. But ultimately all of that sets up artificial price supports that can cause problems in the long run. I kind of like your idea of a worldwide vfx group that would set standards and provide balance and bargaining power. Also I have to say my experience with Indian houses is the opposite of what you suggest. R&H has raised the standard of living for hundreds of its workers significantly, indian owned houses like Anibrain are run a little like families with a lot of love and good will and descent pay and working conditions. I’m just honored that you chimed in because your insight can help us all….even if I don’t totally agree with you.

    • Lisa McNamara

      It’s a dream, alrighty. I have trouble imagining that the heads of VFX studios worldwide would ever come to an agreement that would prevent underbidding and undercutting. In all the years i’ve been at post houses and VFX studios, it seems there’s always been a shop that springs up, filled with young, rebellious sorts who, by the sheer power of their chutzpah, woo the work away from the bigger, more established houses. How can that be prevented from happening again and again by the formation of a trade association?

      Perhaps i’m too idealistic, but why couldn’t a union model, in which a push towards job stability and worker protection (i.e. doing the opposite of pushing for higher wages) be implemented? Knowing that the industry is fragile and volatile, could there not be a worker-oriented organization that is tailored to the specific needs of this population?

      Or, perhaps, it’s a combination of the two.

    • Net Perin

      I think that the global interest and support for the
      VFX community that’s being seen is due to the fact that he global world
      favors the Cali artists with such respect… they set the bar… and
      perhaps more than they realize.

      I live in Georgia. I’m a small time freelancer… I do some
      character animation, and some general 3d stuff… the modeling,
      lighting, etc. I believe Georgia is a right to work state. We really
      don’t have unions here, and I don’t think that one would be able to get
      off the ground either… the biggest reason is because there are way
      more freelancers than staffers. That being said, What happens in Cali
      is very important to me… as the bar for salaries translates to this
      side of the country, and elsewhere, I’m sure. (and also, please note…
      from a humanitarian stand point, I support the VFX artists all the way!
      not just from a business/salary view)

      I think that it would be a brilliant idea to have a group, a body,
      a society, an association… whatever you want to call it… that would
      be able to lobby/influence Congress and the President on behalf of our
      industry as a whole… and I also think having a voice led the way may
      help other industries that are facing similar situations.

      Scott, Peter… Thanks for caring, for taking a stand… and for being leaders when we need it. Please holler if you need any help from down south.

  • Marc

    Why should effects artists be the poor cousins when all the other trades including craft services are unionized?

    • Peter Plantec

      Because what you have to offer is portable and what they have is not.

    • Peter Plantec

      Because as critical as vfx are to the success of tent pole productions, you can get good vfx work almost anywhere. Great vfx…that’s a different story. I’ve seen fine vfx work coming out of Sri Lanka for gosh sakes. The world is changing…unionizing won’t change the fact that you are in the only part of the movie business that has virtually no brute bargaining power.

  • not really

    This essentially reads like a press release for your daughter’s company. Not much credibility to be found here. Not to mention you completely missed the point if you thought all this outcry was Los Angeles specific.

    • Peter Plantec

      Not Really. Jenny Fulle and Marc Weigert are client side as well as others on house side agree with me that one secret to survival is to do something (s) better than anybody else. Thus you severely limit your competition.

      The focus of this outcry is Los Angeles, to keep,work here at reasonable contract rates, put our people back to work.. But all of us have been pushing to expand it to an industry wide rally. You sound like you have an axe to grind….curious. This is not about Scanline. They don’t need me to tout them.

  • be real

    I see we’re deleting comments we don’t agree with.

    • Anonymous

      Be Real, nothing has been deleted from this thread. We *do* edit comments for personal attacks and insults, and we have a filter that sometimes thinks comments are spammy when they’re really not. But whatever you posted must have glitched out. Feel free to repost..

  • Anthony

    Maybe the studios should re think there outsourcing strategeys.

    One thing I don’t understand is how is all this breakdown in the VFX
    industry is going to help the studios? Surely they can’t be thinking, ”
    Oh well isn’t it a shame their all falling apart out there, just as well
    it doesn’t effect us”.

    What, do they just aim to get the lowest price without realizing they
    are helping this mess happen? Isn’t it in their interest to have a
    solid VFX industry? How long do they think they can continue a system of
    expecting the lowest price before it ultimately effects them?

    • Peter Plantec

      Themstudiosmare worried about it. They actually want to work with well run, efficient houses and they are willing to pay for it.

  • vfx guy

    I have to respectfully disagree. We are dying in la. Doing nothing is a loosing battle. Smarter vfx? Explain please. Everyone knows this current buissness modle is a race to the bottom. And honestly vfx houses make the movies these days, theydont even need the studios but for cash. Once that wall falls, its a new world.

    • Peter Plantec

      See my comments above vfxg. I feel your pain. The most frustrating part is that there isn’t much you can do directly other than finding a job at a well run house. Good luck with that these days. What you need is to find good business people who understand the business to organize a new house and run it efficiently. They need to have the balls to stand up and deal with the studios.

      The successful houses have strong, smart executive producers who don’t fold in negotiations, and they don’t take crap because they know they can work their people to death..

      Studios are very practical. They will pay to get certain things. Some of them are: convenience, reliability, superior product, specialized capability, workable attitude, and superior artistry. If you can offer those things you don’t need to work for peanuts. The good houses charge what it costs plus overhead and profit. If you Think R&H worked cheap you would be very wrong and they’ve stayed in business for more than three decades. IMHO, the LA facility folded from the inside due to excess generosity. But what do I know.

  • Pretend journalist

    If you really think the first thing the Iatse guys would do is ask for pay rises than your usual superficial journalistic mind is in danger.
    Aside the fact that they would ask US what they wanted to negotiate the pay is the least of our worries. Healthcare, overtime, working conditions!

    While some artist could use a raise its not the main issue. Leverage to change things, how the studios see us is the main point. Respect VFX. The ants are unionizing!

    • Peter Plantec

      Pretend, I suspect you would have very little to,say about what the union does…that would be typical. I totally agree with you that solid benefits and healthcare are critical, especially if you want to raise a family. You want and deserve respect. A union is not going to get that for you because you don’t have much of a bargaining position. You don’t have anything the Studios want or need. The horrible truth is they can get it elsewhere. Your union won’t be dealing with the studios anyway. They will be dealing in many cases with badly run vfx houses barely standing. What will you do picket and make demands for health care? They can’t afford to give you health care because they don’t charge the studios enough to cover it. Why? Because there are ten other houses willing to do the work cheaper. It’s a mess. We need to clean out the sweat houses or teach them how to compete effectively. How many houses do yo know that are run by smart business people? Right… That is a chunk of the problem here, and you ants uniting is not going to change that. Well you will topple some bad houses which could be good in the long run. But respect? If you want that become well known for your outstanding talent and body of work, use it to wedge your way into a solid, well run house. You will love it. I’ve interviewed workers at these places,

  • SeniorVFXArtist

    I don’t really consider LA wages fair. I will do 80-100 hour weeks for a couple of months on end and I can barely afford to take any significant time off to recuperate. I don’t blame it on the small VFX houses, but I do blame it on what they charge from the studios. A smart union will not just pressure the VFX houses, but also the people signing the checks. Survival instinct. If VFX workers demand better work circumstances and higher pay, it would force VFX studios to increase their bids and Hollywood will have to abide if they want high quality work from studios they can communicate with without having to resort to video conferencing. VFX artists are some of the least paid in the industry and no matter how much our work contributes to a movie, we are always last in the credits. While I don’t know R&H’s exact situation, what I do know is that outside of the big three top studios, VFX houses are not making a profit which is in my opinion ridiculous. These are also the houses the employ the majority of the VFX artists out there. Many medium size VFX houses also try to balance their expenses by having a few very talented, high paid, artist and filling out the rest of the work force with juniors that are eager to get into the industry and will work for very little. This often has the effect that the seniors end up doing and re-doing a lot of the work that the juniors produced. The way it is now is not sustainable.

    • Peter Plantec

      Senior, clearly you didn’t work at R&H where you could take weekends off, a paid sabbatical after working with other senior Vfx people. Your story makes me mad. It’s pure exploitation. But you have to take some responsibility for choosing to work at these places. I think of them as sweat shops. I’ve seen it first had…months with no time off, very long days and very little appreciation. As these badly run sweat houses die off, I’m hoping that better run houses…actual businesses take their places. It’s one reason I started this series. I’ve been discussing some of the survival strategies of the good houses and why they work and how they treat their people. I’m hoping more and more vfx houses start using smart management both in contracting and in they way they treat their people. No more exploitation!

  • http://www.facebook.com/lightwolf Michael Wolf

    “The surviving houses are now under enormous pressure from the union to provide both reasonable and unreasonable things to its members. They have to go to the studios and make demands. They don’t have a trade association, so those demands fall on deaf ears.”

    Maybe the last line here is exactly part of the problem as well as part of the solution. Especially considering that the (big) houses have, what, 5-6 clients?

    • Peter Plantec

      Michael…please elaborate for us.

  • Heikki Anttila

    Union or not there is a problem in a business model where movie like Avatar doesn’t share any of the back end with the effects house. The balance of the compensation is skewed for sure, Weather the answer is unions is not so clear but it is tricky situation when so many (most?) other aspects of movie production is unionized. Some sort of common muscle is needed to change the way the contracts are made and what the profit margin is.

    Unions seem to work without much drama for crews in animated features and there seems to be enough profit still for the studios themselves. I think likes of Dreamworks, Pixar etc. should be looked at when thinking about the model.

    • Peter Plantec

      Interesting you picked Dreamworks. They just reported an 83 million dollar loss for the last quarter and are laying off about 350 animator and vfx people. Hoards of talented people will be walking the streets of LA looking for a job…a dime a dozen. Add them to the hundreds of talented R&H people, many with families to support, and you have a lot of people willing to work cheap. This is a recipe for exploitation. I’m worried about them, very worried.

      As for unions. Many of you seem to be missing a point. VFX is a different animal. It and film composing are currently about the only portable parts of a movie…VFX can be done anywhere. Where is your bargaining power? You have none unless you have something a major studio wants and can’t get elsewhere. That’s what the Director’s guild has. SAG has that too, and all the other guilds that protect LA film workers. You don’t have that unless you work at a specialty vfx house with clout.

  • Mark Kochinski

    I see three factions at play here. The studios, the FX facilities, and the artists. All three have a vested interest, and all three need to be able to represent those interests. There is definitely an anti-union sentiment here, and I’m not sure if that’s ideological in nature or a pre-assumption of what a union is.

    A union is just a group of people bargaining with one unified voice. There have been unions that abused their power, and unions that haven’t. They do not and cannot strike at the drop of a hat. In fact, it’s a hugely painful process to get a union to strike.

    And one major fact is being ignored here – EVERY single discipline in the movie industry – EXCEPT visual effects – is represented by a union. Every director, producer, cinematographer, writer, actor, gaffer, and driver telling us that a union would be bad for VFX is represented by a union, and yet the industry manages to survive. I’m not certain they would so casually dismiss the usefulness of unions if it were their own, and I’m not sure why a union for VFX people would by necessity be a “bad” thing.

    EXCEPT that a VFX union would be bargaining with facilities, not the studios.

    And, I think, that’s the rub. The facilities would bear the brunt.

    So they need a unified voice as well. Hence a trade association.

    I think each of the three factions needs to understand that NONE of them alone can bear the cost of VFX, that this needs to be a shared expense with shared benefits, negotiated honestly and openly.

    And can we PLEASE address the subsidies, which distort the market and the playing field? NO VFX facility can compete when the tax revenue of an entire state or country is writing blank checks to the studios.

    I’m not blaming the states, and I’m not blaming the studios. That’s business. But I think that’s where government steps in – when another government is using the power of THEIR state to distort the market.

    • Peter Plantec

      Well stated and well thought out, Mark. I agree with a lot of what you say.

  • Karl K

    I believe whole heartedly that a Trade Association is the answer, but we already know that the fx houses wont do that on their own. Why not create a union with the main purpose of forcing them to do that rather than just fight wages and the like? I marched on Sunday because I want to be able to work in this industry my whole life. Right now everyone I know who comes into this industry immediately starts planning on their exit strategy for when they cant take it anymore, or when the work is gone. It doesn’t have to be that way. And healthy FX houses is the means to that end.

    • Peter Plantec

      Interesting idea Karl. It could work. I’m not crazy about the idea of unions for many reasons. Power corrupts, and unions tend to make matters worse when they have a weak bargaining position as a vfx union would have. I wish I had a better answer.

  • Chris Simmons

    So your solution is no solution? You can’t win so don’t try. Get used to less pay longer hours and no benefits, you have no choice. Move to where the work is, and then follow it from place to place to place like a migrant farm worker. This is the life for you, your spouse and your children.

    Don’t fight the bully kicking sand in your face, learn to enjoy the flavor and texture of sand, it’s really not that bad.

    Genius!!

    We need to lobby to either put tariffs on film that collect the tax break money, or take those governments to the WTO. I’m less worried about competition from emerging countries, and more concerned with the work that has gone to the countries that are paying the kickbacks.

    If you go for a job interview and offer to bribe the HR person with 25% or 50% of your paycheck to give you that job, is it ethical? If HR people expected this would it be right? That is what these subsidies are, and they need to go away one way or another.

    I’m not worried about Hollywood competing with other nations on a level playing field, but it’s not level because of the kickbacks.

    Your solution is no solution Peter.

    Cheers,

    Chris Simmons

    • Peter Plantec

      Chris, I think you missed the entire gist of my blog. Just the opposite. It takes balance. R&H has for decades been famous for its extreme generosity with its artists. Unfortunately that accumulated overhead hurt them in the end. Bad houses exploit their people.

      But the successful houses don’t over do it, they achieve a balance of lean, mean and reasonably generous. I guess I’m saying you need to pick where you work very carefully. Make yourself a valuable commodity so you get a choice. The good houses do not — I did point this out in the article — exploit their people. They give them weekends off. You sound like you’ve been working at the wrong places. I wish you better choices in the future. Seriously.

  • http://www.facebook.com/falk.buettner Falk Buettner

    I agree with the comment of Scott Ross. it is not only about jobe in LA, it is global issue.
    But I also agree that we need to get smarter business wise.

  • http://twitter.com/neha_rainlove Neha Vaswani

    I was with you all through out the article. Yes many of us have changed our profile pictures to show our support for artists in LA but got disappointed when you mentioned that ordinary work will go away. I don’t really understand what you mean by that. I am from India and pretty young in this industry, i have seen some outstanding work from my country. R&H has helped improved things here and people are learning and achieving a lot. There are very few like R&H here. Conditions are not any better here, artists are made to work for long hours without pay in the name of training, learning and promises for permanent jobs and to top it working environments are literally bad in most of the studios I feel we are in the same boat after all. Working on solutions globally sounds like good idea, yeah it is idealistic but this way it will ensure that artists are at least payed what they deserve and are provided with good working conditions. Support from India.

    • Peter Plantec

      I’m not sure I follow all of that, but I feel that ordinary vfx work can now be done much more cheaply overseas…yes in India, Malaysia, China. If you’ve worked at R&H in Mumbai or Hyderabad, you know they are good houses doing sophisticated work under the able guidance of Prashant and Vani. I do know that there are sweat shops in India and in fact, you have a similar problem with the bad houses exploiting their workers, but there are some great houses in India who do not exploit their people. Look at Anibrain…fabulous VFX work and animation. They treat their workers like family. Prime Focus is doing sophisticated work in india as well.

      You do face a similar problem to LA and I do see this as a global situation, I promise. My series of articles has been focused on LA, but I am not ignoring the rest of the world. I spend a lot of time abroad organizing entertainment industry conferences where I get first hand knowledge.

  • Peter Plantec

    I completely agree with you about the art Matt. In fact, the houses with the most talented eyes seem to be the ones surviving. They also tend to be the better run houses…it all seems to flow together.

  • Peter Plantec

    I completely agree with you about the art Matt. In fact, the houses with the most talented eyes seem to be the ones surviving. They also tend to be the better run houses…it all seems to flow together.

  • Dan Supko

    I worked a for a few years building and dressing sets in Los Angeles. I was not a member of IATSE Local 44, so I was only allowed to work on Commercials and Music Videos, which had low enough budgets that fell under the unions radar.

    The people who hired me, and most I worked with were in the IATSE, and nearly all of them felt that the union was worthless and an unnecessary evil. I worked on probably 25 commercials and 15 to 20 music videos, and logged enough hours to join the union, but I found it to be somewhat difficult.

    First off, while you are working and building up your required hours to join the union, the union is deducting money from every check you get, and it’s no small amount. If I received $1000 on a check, the union deduction was probably $60.

    And when it comes time to actually join the union, they require a “fee” that at the time was somewhere around $6000.

    Now, don’t get me wrong, because of the unions it is possible for even the lowest guys on a production to make $60-$70k per year, but the unions do not find any work for you. You still have to go out and do the best job you can every time, and hope your contacts will keep you employed.

    After about 5 years in the set building scene, I found all my unionized contacts off working on studio films in Louisiana, NY, etc, and the commercial work dried up for me. I did attempt to join the union a couple times, but was refused, and rather rudely btw.

    Really, the only way to keep working, I guess, is to deal with the low pay while it’s low, and trying to find ways to minimize your expenses, and keep trying to be the very best at what you do.

    If you are the very best creature designer and have many contacts, you will probably always have opportunities. The pay may be lower than normal right now, but hopefully the external forces you cannot control will ebb towards a way to increase profits for the very best.

    But if you decide that you are already the best and need not improve, and the only thing that needs changing is your wage, then you may very well find yourself out of work.

    Anyway, just an observation of mine regarding my union experience.

    Good luck to everyone out there trying to be creative for a living.

  • DriverinLA

    You want better pays, you want less hours to work, think of forming a union?Good luck with that daydream. There is an influx of fresh young people, software getting better to improve the production pipeline. I believe eventual outcome for everyone in VFX industry is a change in profession. You cannot compete in an environment like this with ever increasing competition and ever decreasing need of manual input for production.
    I would say start making your exit strategy if you have not done already.

    Welcome to the capitalism 101 in light of global economy…

  • rustypix

    Several things become evident when considering the plight of the VFX artists from a point of view encompassing the global culture and economy:

    Titles and egos:
    We can call a construction worker who lays tile perfectly and caulks a bathtub without beading a superb craftsperson, but rarely an artist; that title falls on the Architect and interior designer. VFX artists resemble these construction workers in that they are superbly skilled in executing predefined art direction. The use of “artist” might be bruising some egos and adding some confusion to the problem at hand. Maybe “VFX craftsperson” is more than suitable to the job description and less ego confusing in the long run.

    Who doesn’t want it cheap?:
    The goal of ever industry on the planet is to become as cheap and efficient as possible. The Film studios and VFX studios demand this, and VFX craftspeople want this too. Every time faster hardware, new plug-in or app becomes available inevitably easies the workload. Every body wants it done as efficiently as possible. The more people get involved in an industry the cheaper it gets because more of the minute problems of the process get solved making it easier to grow workforce in the craft, it is an unavoidable function of division of labor. This is evident by following the timeline of any service or product that has ever been mass marketed; VFX does not escape this. When a craft becomes so easy it either becomes a script, app or junior work, this event should inspire a craftsperson to stay relevant or choose a less developed craft.

    Pay:
    It might be false to assume that any given VFX craftsperson could execute a given task in equal quality and schedule, yet that is what current pay structures imply when using hourly or daily rates. It would make budgeting more accurate and truthful if VFX craftspeople could sell their finished products to their pipeline dependents at a price determined case per case by peer consent and reflecting a proportional share of each ticket sold, regardless of how long it took them to make. Each individual’s virtues, skills and intelligence come into play, which makes paying using uniform time scales and not the finished product a bit archaic; they are not selling time but a product. Figuring out efficiency and quality is the creative part of their job. Imagine, there would be no over or under budgets!

    Subsidies I:
    Taxes subsidies are very shortsighted solutions devised by executives and politicians with very shortsighted agendas; this management dilemma currently permeates every industry in the planet. The end result forces craftspeople and VFX studios to migrate chasing these short-lived regional anomalies. Hard to solve because business and politics get tangled in an endless spiral, but maybe VFX craftspeople could organize globally to oppose this trend and/or negotiate a surcharge to the audiences in the regions that offer the subsidies creating a global balancing fund.

    Subsidies II:
    Here is a hidden subsidy; why is the price of a movie ticket uniform regardless of the movie? If a movie cost 1B to make and another cost 1MM why should the price to see them be the same? Imagine if the price of all cars were the same regardless of quality, performance, showroom, etc? The price of a movie ticket ideally should have built-in it the entire production process, place and form of showing and it is recency. This is a hidden subsidy between adjacent showrooms, where low budget movies amortize the losses of the big budget movies. Audiences should be exposed to a more transparent pricing and pay for what they expect to see. Did accountants come up with uniform pricing to ease their jobs?

    Geek out:
    VFX craftspeople would benefit in the long run by whole heartedly associating to discuss their craft and help it become more effective while keeping them well versed and relevant. Associations like the “academic” component of regional chapters of Siggraph come to mind. Associating, not for the craft, but simply for the purpose of labor rights and compensation would stifle the evolution of the craft; just look at production unions, it ends up taking 10hs to prop a ladder and 10 more to place markers. Every one ends up working for the clock not for the craft; this is counter to the division of labor and ultimately counter to the purpose of community and civilization. Associations such as Siggraph need to geek out and reach out to offer its services to the global community at large. Once the global community learns to value VFX it would engage and respect it.

    Running for cover:
    The global community might easily be on the fence regarding the contributions of the VFX industry; Life of Pi is a rare exception, but Spiderman####, Batman####, Superman#### just soak our youth with senseless violence and gender distortions (hence careful taking “artist” credit or you might end up with some blood credit: Columbine, Aurora, Sandy, etc). Is this the best that this Industry can offer to humanity? If VFX found meaningful and purposeful partners in the global community the craft would surely be respected. There seems to be little real value around so no one cares where things are made, how or why as long as they are “designed in California”.

    Ok, You can stop beating me now:
    The economic stronghold on the cultural content of any film hinders the art form from contributing meaningfully to the global community. Culture is not a for profit industry, it is meant to further the human spirit, not to make humans want things and to take on personalities counter to their own innate identities. If VFX created meaningful value to the community then the community would return with independent funding or gifts, (ie. Kickstarter). Bluntly, current blockbuster filmmaking is a direct attack to the freedom of every human in this planet, probably the main reason why no one will care if VFX suffers. The sad part is that probably society can’t afford to invest all this amazing brain power and talent in making these moments of mass psychosis; these geniuses would better serve us all by solving real life problems. Associate, debate amongst each other to make VFX relevant and then maybe VFX could find an audience that cares.