The survival of our VFX industry is a very serious subject for me. Most of my friends are somehow associated with it, and they are, for the most part, talented, dedicated and hard-working folks. So I'm continuing my investigation into what makes VFX companies thrive in difficult times. I've been talking with a few studios, and not just American ones, but a few in countries with subsidies. It turns out VFX companies fail there too. But the savvy companies that thrive all seem to have some things in common.

The first thing I did was take a look to see who was hiring, then I checked with my VFX artist daughter Danielle to get her thoughts, and finally I just contacted studios that were clearly doing well. Let's take a look at one I found right in Hollywood's backyard in Santa Monica: Luma Pictures. I remember when Luma was founded a decade ago, and it still appears to be doing very well. That's their classy yet far from extravagant conference room, at top, and I've included more pictures, below. Over the years I'd heard that Luma was a good place to work but I didn't hear much more; they've kept a very low profile ever since.

Luma Pictures was started by Payam Shohadai (left) and Jonathan Betuel. Jonathan wrote one of my favorite films, The Last Starfighter, which was also one of the first major motion pictures to feature serious digital FX. Payam is still the CEO and was kind enough to answer my somewhat invasive questions to help with my quest. In my conversation with him it became very clear that he cares about his people as much as his company. That seemed like a very good beginning. "In recent months," he told me, "we have been reflecting on our longevity, and how that in spite of industry turmoils, we've remained healthy and have even been thriving despite our low profile. We've decided that this is significant, and that Luma should no longer be so introverted, and that perhaps some people in our troubled industry would be interested in what Luma does, and how we go about business." Exactly what I was starting to think, which is why I was so glad he decided to open up.

How will Luma spread the word? "We've recently decided to break out of our shell and become a more active part of our community," he continued, "something we've really shied away from in the past.” He told me that Luma is going to take a more serious position, and join in the mission to try and improve the VFX industry here in the U.S. “We realize much effort has gone towards this, and have no misconceptions of the challenges ahead — but with the help of other active participants, we will try our hardest to make a difference.” He also told me that Luma will be expanding both here and abroad. “We are in a global market — it's not the U.S. industry vs. other markets. As long as the playing fields are level, there's enough work to be shared by the best players in the international community. And we want to be a more prominent part of that larger community, so we've also decided it's finally time to expand Luma's presence – cautiously – domestically and internationally."

Growing realistically in a healthy way is a HUGE challenge for any VFX company, and far too many have already suffered the consequences when this goes badly. Payam thinks it's time to test the waters. "We're no longer going to limit our footprint," he told me. "Going forward, we will carefully grow Luma — in our home country, and/or other countries — with each sensible/responsible opportunity.” In our conversation it was clear that Luma has been looking very carefully at potential opportunities in VFX friendly jurisdictions.

With plenty of space and ergonomically designed work areas, Luma artists enjoy pleasant conditions.

I asked Payam what makes Luma Pictures a stand-out company from his perspective. It isn't just the company's fine work, he said. He is extremely proud of the principles on which the company operates. They are clearly stated by the top management and everyone working there lives by them; it's been like that at Luma from the beginning. Here is how Payam spelled it out.

The Luma Principles

1. Treat everyone as well as you'd expect to be treated if you were in their place. Payam explains: “This affects our management style on everything ranging from employee overtime to client overages. For example, our managers try their hardest to avoid overtime for our artists (and do a great job), because I very firmly have ingrained the outlook that overtime is a failure of sorts for our management. Our mindset is to be conscious of the likelihood that an OT request is probably ruining someone's evening plans, or adding pressure to a relationship/family, or causing other strain for that person. While the many wildly unexpected fluctuations make it hard to avoid OT completely in our industry (and we have had our share of mild-by-industry-standards crunch periods), I believe Luma would be at the top of any list for good behavior in the VFX service industry: Never a Sunday work request; Very rare Saturday work requests.” I admit, I was both amazed and somewhat shocked by this statement. Many of the houses I'm familiar with work their people to the bone. VFX people tend to be passionate about their work and are thus easy to exploit. Payam tells me they are aware of this and work extra hard to avoid exploiting their people. I believe him…and reality verifies it.

2. Know that anything Luma does can always be done better. “We constantly and aggressively think about Luma's 'machine,' and how to improve its efficiency and our quality of work, while also pushing ourselves to continually up the fun and cultural 'freshness' our employee experience," he explains. "We also always vigorously push for our employees' feedback on where they think we can make their processes easier, or their lives better – always.” (Interesting…I've heard complaints over the years from people who have come up with clever ways to improve the flow or efficiency of production who were constantly ignored by management. Not so at Luma. Also in order to do things better then others, they maintain a substantial in-house pipeline development team.)

3. Question everything. “Just because things have been done a certain way by others in the past does not mean that is the correct way," he says. "As a matter of fact, there's a chance that the longer something has been done a certain way, the more likely it's due for an improvement in processes. Or as another example, even when a person we trust highly recommends we hire someone, he/she is still put through the heavy vetting of Luma's hiring process.” (The motion picture and television industries are evolving so rapidly that entire workflows can change between production cycles. Rapid innovation is a big key. The studios want more and better and quicker for less money. And they want all that reliably. So it would appear that keeping on top of your internal processes and procedures and constantly upgrading them is a critical part of success. Studios that get stuck in a rut doing the same things the same way over and over tend to disappear.)

4. Luma is run as a true meritocracy. “Seniority and authority are entirely based on one's abilities, no matter how long the person has been with the company, or how much experience they may have," Payam says. "Our very best are leading and inspiring others to be their very best.” Read that again. This is where so many studios screw up, big time. This is a tough business and seniority only really counts when it brings that combination of cleverness, talent, experience and effectiveness that it should. Having expensive senior people resting on laurels is a quick way down the tubes.

Everyone working at Luma can enjoy the cool sea breezes and sunshine of Santa Monica on the studio's comfortable patio.

I never expected to uncover so much interesting stuff, let alone in just four concise but brilliantly honest principles, about how to run a VFX company. I also never expected it to jibe with my own personal business philosophy. I ran a multinational company for several years with a similar people-oriented approach and it was very successful. Along those lines, Payam then pointed out something even more telling. “Luma is a mostly staff-based company," he told me. "We maintain a vast majority of our employees as long-term staff, in contrast to this largely nomadic industry. We still have multiple employees dating back to our inception ten years ago, and even a few from the previous incarnations of the company from prior years. We place significant focus on finding the very best artists who are the right fit, and then work hard to give them a good, long-term home. We've lost very few good people over the years." He said that even Luma's short-term hiring is done "with an eye towards finding those very best people who are the right fit, possibly for a longer-term position.”

I couldn't agree more for all of this. It is exactly the kind of thinking this industry needs more of. It looks towards stability and clearly this kind of thinking pays off big time in many ways.

Not really knowing Luma, as few people outside the company really do, I asked Payam what Luma Pictures does best. He surprised me with his answer. I expected something like, "We do the best Fluids or environments or creatures," all of which they are known for. No, without thinking, he immediately said, “If I had to choose one thing, I'd say it's our hiring practices. We've always had a knack for this, but with each passing year we've sharpened our skills in finding great employees, in all positions, and also in quickly determining when a new employee isn't a good fit or who may simply need some positive guidance. Every employee at Luma is carrying his/her weight — there are so many super sharp and talented people here, that you can't help but feel a sense of pride.”

So here is my takeaway: Without taking the opportunity to sell his company through my interview, Payam helped us all better understand what's working well for him and what this industry needs to thrive.

OK, I can hear you all chiming in loudly at this point, "This is great, Peter, really inspiring stuff. But did you ask him the hard questions? You know, including the big one, like how Luma competes with foreign subsidized VFX studios the world over?" Yes I did, and his response was complicated yet very helpful. “This has definitely been the biggest challenge for Luma and the US industry as a whole," he began. "I've seen the collapse of nearly every brandname U.S. VFX company that has existed since I started doing this.” He admits that it has been so discouraging at times that it seemed like it was a losing battle.

Luma's battle plan, however, has largely been to focus on improving the studio's total machine, which improves margins, which in turn allows them to put resources back into improvements. It also goes a very long way toward maintaining their corporate quality of life. “Beyond that," Payam added, "we work hard to really provide the best service, convenience and quality to our clients, so they see the value beyond just the bottom line of the bid. And fortunately, we have repeat clients who have come to appreciate that aspect of working with us.”

Still, he admitted to me that it may not be enough. The writing is on the wall and a major effort is needed to overcome the imbalance in bid pricing due to foreign subsidies and rebates. Payam and his people have some ideas on where they can best contribute to this endeavor. And here's where you come in: they need all of you to consider helping in one way or another. “We've very recently decided to start taking a serious part in the community effort to correct the international imbalance," he explains, "and in trying to re-level the playing field for the U.S. market. I'm willing to spend serious money, task existing employees, and even hire new employees for this cause, wherever my team feels it's wise and will have an impact.”

Payam also feels that although there are existing campaigns approaching the government for assistance, they're likely short of resources and could use much more help. It's a political situation that has to be handled through intelligent persuasion. The average American is not going to want tax dollars to go to support the millionaires in Hollywood. They don't see or think about the struggling production people who are suffering. There are many good arguments already out there, like “The American film industry is one of our nation's largest and most renowned exports, but foreign subsidies have led that industry to create these films mostly with labor in other countries."

Payam and Luma Pictures would really like to make a difference. "I genuinely support a global industry — and do have plans for Luma to expand on a more global level — but the bottom line is that success should come to teams and facilities based on their performance, not their location," he said. "At the end of the day, if there's to be any hope for fixing the competitive disparities between countries, much more effort needs to go into educating the public and government officials about the dramatic losses so far and about what still remains at stake. There's so much information out there that it's making people's heads spin. Luma is going to take major steps to create better clarity and presentation of all that information, and we'll put a lot of focus toward educating those individuals who're in positions to help create equality, so that U.S.-based facilities also have a fair shot at winning the work." While it's still the early days for Luma in this regard, he said, "I urge anyone who's an active participant in this cause to reach out, share knowledge, and cross-pollinate with some of our efforts.”

Another thing? He's prudent. He admitted that investing resources is one thing but he also told me, point blank, "I don't waste money. We're willing to donate significant resources towards this endeavor, but we'll be judicious with our efforts in order to ensure quality progress.”

I came away with admiration for Payam and his team. I think it's true that Hollywood's production community needs more lobbying effort both in Washington and definitely in Sacramento. It's one of California's most important industries and it can't be neglected by the government any longer, especially when it competes with VFX work subsidized by other governments around the world. And an even healthier movie industry means more jobs and tax dollars; it's a no brainer. I recommend any of you who have something to contribute, whether it is talent, wisdom or effort, and really wants to help in the cause to stabilize this industry here in the States, write an email to "" and tell them what skills/effort you can contribute and what your availability will be. If you're unemployed, don't be shy about it. We're all working to get you back in the saddle.

Next time, I'll take an up close but not too personal look at Scanline VFX LA and Vancouver, whose spectacular success over its relatively short life may give others inspiration and insight into their own potential.