UPDATE: 4/17. The past two articles have garnered an unexpectedly large number of important, articulate responses from industry people. There is as much — or more — useful information in these comments as in the original blog. I ask you to look through them after reading the blog itself. You will find some agreement and plenty of disagreement with my assertions. It's all food for thought, and I highly encourage you to read them.

As I keep digging deeper into the VFX crisis, it's becoming almost fractal. I try to stay neutral, and it's getting easier as I learn more. Taking sides in this issue will not lead to a solution. It seems all of us play a part. All sides are partly responsible. Getting the studios' side of the story can be difficult, but I'm making headway. They do have some points. Let's take a look at some things I've learned recently.

The Treadmill
I've discovered a bad business practice that I'm calling the VFX treadmill. If a house like Rhythm & Hues got on this treadmill, that would partially explain why, when progressive and multiple delays happened, they could not simply shut down operations and preserve capital.

Think of it like robbing Peter to pay Paul. Let's say, for whatever reason, you go over budget on a project, but you have to deliver, so you use some money from another project. You figure you're going to pay it back when new work comes in. You just assume that new work will come because it's all set up and promised. But it is delayed much more than you anticipated.

Over time, you get stretched on Project A and have to complete it with some funding from project B, which has now started. Now, you don't have quite enough money to complete project B so you have to “borrow” some from projects C and D. And you complete Project B, but now you are a little short on the other smaller projects, so you have to either skimp on them or eat into overhead or borrow from yet another project or three. You can see how over years or decades this can build into a nasty treadmill that you can't easily jump off.

If you see it happening at your house, I advise finding the off button ASAP. On a positive note, from what I've been told, the stronger houses work very hard to avoid the treadmill syndrome. They are finding strength in working lean and staying on budget and keeping their projects straight.

And one more small aside: avoid having too many layers of management. It gets very costly and slows down critical VFX decision processes and reduces flexibility. When you have great artists working for you, you can operate effectively with less hands-on management and more trust.

Stop Blaming the Studios for Everything
This leads me to something that many of you won't like. But I think it's pretty valid. The studios are not the total bad guys that many of you believe them to be. Granted they can be bastards at times, but blaming them just makes you a victim.

Remember, the studios create this business. They have their own risks and worries and, as we saw with Dreamworks, losses as well. By the way, I'm learning that they do pay for extensions and delays when it's in your contract and they cause them. So I was wrong about that.

I am convinced beyond a shadow of a doubt that the studios do not want VFX houses going under. They want strong, reliable houses nearby — especially in their own time zone. They often know when a job is being underbid and will not go with that vendor. They want the house to charge enough so they can deliver good work and stay reliably afloat. It is not in any studio's best interest to simply go with the lowest bidder, with all of the  associated risks. They are far more interested in how reliable the house is, how easy they are to work with, and how good their output is.

This whole crisis keeps coming down to unsound business practices on both sides. I'm not going to pretend that I know what all of the “good business practices” should be. That is a job for the experts, and I don't mean just leaders of this industry. I mean experts at setting up sound business practices for specific industries. They exist. I talked with one who doesn't know our industry very well but, looking at it critically, he had a lot to say about things that could be organized better.

Let's Work with the Studios
Here's a simple little clue for working well with studios so they think about your house when they have work to hand out.

I've gotten this obvious but often neglected little tip from two successful houses, and it has been reinforced by studio people. The studio side VFX sup you will be working with is almost for sure going to be a decent human. (If you get a toxic VFX sup, then run. If you don't know who they are, most everyone else does, so ask.) Client-side sups love working with house people who are pleasant, reasonable and flexible. Nothing makes their day better than knowing they can trust the house sup to stay on top of things. They love house sups that can take the ball and run with it — who get invested in the project with enthusiasm. And they like to see the work getting done, and done well. That's not much to ask, from my POV. It's a lot of work, but that's what we're here for. Amazing work is what this industry is all about. So negotiate well, contract intelligently, do the work within the your proper budget, and be fun to work with.

We All Need to Take Responsibility
Seriously, we all have to stop angling to place blame. There is plenty to go around on all sides. If we want to save this industry, everybody has to take responsibility. I think you might detect a theme here.

Underbidding has got to stop. Only bid for shots you know you can handle, and at a reasonable estimate of what it will really cost, plus overhead and profit. If the studio changes scope on the shot, or if they ask for an unreasonable amount of fine-tuning, go in for a change-of-scope contract amendment. The studios know you are not in the business to fund their movies. They may object, but you have to stick to sound business practices. Do not lose money. Do not sign contracts that will force you to lose money. That is the ultimate bad business practice. (Seriously, it's been done.)

Stop with the Boycott Talk
I keep hearing in emails and on Facebook from people trying to organize boycotts against VFX films. I call bullshit on that. It is probably the dumbest thing you guys have come up with. You are the people who make great VFX films because you love watching them. They are exciting. This work has been done by you and your friends and mine. Everybody puts their hearts and souls into it. The work deserves to be seen. Let's not boycott ourselves. Do the opposite. Show your power by getting everybody to go to VFX movies.

I think the above talk grew out of the belief that we're approaching a “tipping point,” but let's really think about which direction we want to tip. If we have different factions tipping in different directions, there will be no movement at all. If we tip in the wrong direction (as above) it will hurt all of us. Nothing is as simple as it seems. All sides need to take responsibility and the solution will involve everybody making some changes in how they do work, and learning new, better ways to do business.

A Joint Effort Toward a Workable Solution
Remember, we have good people out there walking the streets, and they don't deserve it. Most of them are very hard-working, talented and skilled people. They give their hearts and souls to create great shots. They create motion-picture elements we all want to see — the ones that make an ordinary movie into a blockbuster.

Let's find a way to all work together. That means studio people of consequence sitting down with representatives of the VFX houses and workers' representatives.

It is critically important that any such a meeting should be moderated by a person respected on all sides. He or she should be someone who can bring people together, not polarize them. Someone who is willing to fairly look at all sides in this crisis and isn't intimidated by aggressive representatives from each faction.

We also need a another neutral person with highly respected business acumen to be there to offer advice to all sides on good business practices. Together, we can hammer out sound basic practices and contracting guidelines that make sense and offer needed protections all round. This can form the basis of a more stable industry, something we all — VFX houses, studios and workers — need desperately.

I honestly wish you all the best and please, for your own sake, be smart. Get other points of view. This industry has grand potential to yield prosperity for all concerned. But only if we all pitch in and start running it right.

-P-