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.