Life In The Movie Business: An Inside Look At The VFX Crisis

There is no doubt that the visual effects (VFX) crisis affecting the film industry right now is going to have an enormous impact on how movies are made in the future. We're just not sure how long it's going to take and what that solution looks like just yet. Here's an insight into the problems plaguing the film industry, what life is like as a VFX artist, and the Oscars controversy that pushed the whole thing over the edge.

How the VFX business works is perhaps best explained as a game. There are three teams: the big American film studios, the VFX vendors and the VFX artists. Each team has a unique strength and weakness. The big American film studios have money (strength) and technology (weakness), the VFX vendors have infrastructure (strength) and mismanagement (weakness), and the VFX artists have creativity (strength) and disorganisation (weakness). The objective is to use your team's unique talents to make blockbuster movies that generate tens of billions of dollars at the box office. Grab as much of that money as you can while low-balling all the other teams and exploiting their weaknesses. The team that has the most money, the most power and the most glory wins the game. The only rule is that all three teams must remain in play — or it's game over for everyone.

Of course, it's a bit more complicated in real life. The vendors serve as middlemen between the film studios (which hand out the work) and the artists (who do the work). And the day-to-day competition exists not so much between the three teams as it does within the teams themselves. The film studios compete with each other for distribution rights to the next big thing, the vendors try to outbid each other for whatever projects the film studios come up with, and the artists compete with each other for jobs created by vendors to work on those projects.

You don't need to look far to see just how tough it is to succeed in the VFX business. Here's a partial list of what we've seen in the past 12 months alone:

And then there's industry veteran Rhythm & Hues, which is considered to be one of the best in the business for its photorealistic creatures in such films as The Incredible Hulk and The Chronicles of Narnia. That wasn't enough to save it from having to file for bankruptcy protection a couple of weeks ago following a failed acquisition. According to the bankruptcy filing, Rhythm & Hues could not cover the cost of doing the work at the agreed price:

Unfortunately, with respect to current projects, the company will be unable to complete them at the bid amount and therefore needs additional funding to pay the costs, mostly labour, for the projects to be completed.

Rhythm & Hues is now facing a class-action lawsuit over unpaid wages and termination without cause.

Right: Guillaume Rocheron, Bill Westenhofer, Donald R. Elliott and Erik-Jan de Boer, winners of the Best Visual Effects award for Life of Pi. Picture: Jason Merritt/Getty Images.

"Box Office + Bankrupt = Visual Effects"

Unsurprisingly, VFX artists were outraged that yet another VFX house had bitten the dust. How is it that VFX companies are struggling so much despite the films they work on being so successful at the box office? Hundreds of VFX artists converged outside the Dolby Theatre in Los Angeles where the Oscars were being held to draw attention to poor working conditions and the unsustainable business model forcing VFX vendors to their knees one by one. A chartered plane flew overhead pulling a banner that said: "Box Office + Bankrupt = Visual Effects vfxunion.com".

And then things get really interesting. As the VFX artists protested outside, Rhythm & Hues was inside winning the Best Visual Effects Oscar for Life of Pi. Bill Westenhofer, VFX supervisor at Rhythm & Hues, accepts the award, but he runs out of time and his speech gets cut off as he tries to talk about the VFX industry's financial problems.

Westenhofer later tells reporters that he was trying to draw attention to the fact that VFX companies are struggling at a time when VFX movies are dominating at the box office. "...I wanted to point out that we aren't technicians. Visual effects is not just a commodity that's being done by people pushing buttons," Westenhofer says. "We're artists, and if we don't find a way to fix the business model, we start to lose the artistry. If anything, Life of Pi shows that we're artists and not just technicians."

Not long afterwards, Ang Lee, who accepts the Best Director Oscar for Life of Pi, seemingly acknowledges everyone except Rhythm & Hues in his acceptance speech. He also reportedly made a comment a couple of weeks ago about how he would like visual effects to be cheaper. That drove at least one VFX artist to Facebook to vent in a scathing post:

Neither Ang nor his winning cinematographer, Claudio Miranda felt they needed to thank or even mention the VFX artists who made the sky, the ocean, the ship, the island, the meerkats and oh yeah... the tiger. Ang thanked the crew, the actors, his agent, his lawyer and the entire country of Taiwan right down to the team that built the wave-pool on the soundstage where Pi was shot. But failed to mention 100's of artists who made, not only the main character of the tiger, but replaced that pool, making it look like a real ocean for 80% of his movie...

If you've seen Life of Pi, there is no doubt that the film's success largely comes down to the visual effects — it did just win an Oscar saying they were the best after all. Indeed, Hollywood's record-breaking $10.8 billion box office haul in 2012 would not have been possible without the visual effects that made blockbusters such as The Avengers and The Amazing Spider-Man possible in the first place.

Life in the VFX Industry

The VFX industry is notorious for its insane working hours and family-unfriendly demands that regularly draws comparisons with sweatshops in the manufacturing industry. And because it's a relatively young part of the film business, there is no official union at this stage to look out for VFX workers.

They are also not as well-liked by the broader film business and are typically seen as a necessary and expensive evil. This disdain is reflected in any movie you watch: If you pay attention to the credits at the end of a movie beyond the top-billed cast and crew, you'll notice that the names of the VFX crew are always listed closer to the end — underneath the name of the receptionist, the caterers and the company that provided the security guards — even when the film is almost entirely created with visual effects, as was the case in Life of Pi.

We spoke to two active VFX workers, but they asked not to be named because speaking to the media without permission breaches the non-disclosure clauses in their employment contracts. We'll call them Bert and Ernie.

Most VFX artists develop and maintain a specific set of skills that allow them to specialise in such areas as animation, effects or lighting. They work up the ladder from junior positions to mid-level and senior roles that eventually offer leadership and management opportunities. Some choose to specialise in animated features, live-action movies or TV commercials. Artists also have IMDB profiles with a reverse chronological list of films they've worked on along with their job titles.

Bert says artists are usually required to work in the dark — much like photographers and dark rooms.

"It's purely for technical reasons," Bert says. "We can't have glare or outside light sources getting in the way, and we need to see the image in the same lighting conditions people will be seeing it in the cinema."

Most artists consider themselves to be independent contractors and rely on overtime rates to make their budgets stretch between jobs — they are hired by VFX vendors as required on a project by project basis with no expectations of continuing work. Many artists are compelled to chase short-term contracts overseas and spend months at a time away from their families. Coworkers are more often than not the only friends you have, and romantic relationships can be more trouble than they're worth when you know you'll only be in town for a little while.

From the VFX protest outside the Oscars on February 24, 2013. Picture: neonmarg/Flickr

Moving around becomes especially difficult when kids enter the equation. Some switch industries entirely while others transition sideways into video games.

"You can spend two years working on one video game as opposed to one movie every four or five months," Ernie says. "And you get royalties if a game does well, especially if you're in a higher up position."

It's not unusual for post-production staff to be required at work 12-15 hours a day, seven days a week in order to deliver a film in time for Boxing Day or the Easter long weekend. These deadlines are mandated by the motion picture studios — the same studios crying poor over online piracy even though it continues to rake in billions of dollars in revenue each year.

From the VFX protest outside the Oscars on February 24, 2013. Picture: neonmarg/Flickr

What Now?

Efforts to unionise are currently underway, but it requires the cooperation of the entire VFX industry. Financially strained VFX houses are understandably reluctant to take on the costs of negotiating a collective bargaining agreement, and artists who rely on short-term contracts are reluctant to put their jobs on the line.

Where the work goes is largely determined by where the biggest tax incentives are located. For instance, the Canadian province of British Columbia has paid out $437 million in tax credits to the big film studios in 2012/2013, which Canadians now have to make up for by paying more for healthcare and increased taxes. VFX vendors have no choice but to take jobs away from places like Los Angeles in favour of Vancouver in order to compete on a level playing field.

And it's not over yet for Rhythm & Hues. The film studios have agreed to give the vendor "emergency loans" so that it can finish the films it has yet to complete. Of course, the film studios have everything to gain by ensuring those projects are completed. Those box office takings are not shared with the vendors nor with the artists who bring the projects to life.

Murmurs of strike actions have gained momentum — and such a move would paralyse not just the film studios and the vendors but the entire entertainment business. Films would halt production, release dates would be missed, merchandising agreements would be broken, the cinemas would have nothing to show, and we would have nothing to watch. If we don't start addressing these problems soon, there might not be any other way around it.

Pictures: Rhythm & Hues, Getty


Comments

    Geez, just pick a different job then. This is like singers complaining that there aren't enough top-50 contracts to go around. Competition is like this. If you're not good enough, or not competitive, or just plain unlucky, then you're out. Who says that skills=stardom? Skill markets are always ebbing and flowing.

      When one of, if not the best VFX companies is filling for bankruptcy (along with many other VFX houses) there is a problem in the industry. Yes the cheaper markets of China, Korea and Thailand may be a quick fix cheaper alternative, but looking at what they have to offer, they are at least 5-10yrs behind the ball in VFX.

        I agree! I work in Production, and experience the issues of greed first hand. It's time the studios recognise they need these VFX artists and pay them accordingly. VFX is the future. Without them VFX there woudln't have been Avatar, Star Trek, Life of Pi, Oz... most films out this year. Things need to change in the industry as a whole.

      Sure , let all us VFX guys go into something else maybe ill just become an astronaut.
      Hope you enjoy years of romantic dramas (coming from a guy whos' name is Tron an almost 90 % VFX heavy film)
      I can deal with the ridiculous work hours and the lack of appreciation from generally everyone.
      But its not about not being good at what we do, its about three things
      1. Movie business models
      2. Cheaper offshore workers
      3. The expectations of the studios for paying less for more.
      Oh and People like Ang lee saying he wished VFX was cheaper....

      Last edited 28/02/13 1:33 pm

        as a designer n pre-vfx artist, we shouldnt let them to pay us low, they get billions of dollar, n what we get?
        maybe less than 3% of their profit, fuck those douche in hollywood to pay us low for givin them the best

        Yep, maybe if Tron is really saavy about the history of VFX he is using that moniker as a dig at the Artists because among other firsts that movie was responsible for, like first CGI character in a movie (bit). It was the first Disney movie that I know of to effectively break the Animators union shipping work of to Singapore or some such far away locale where people are so oppressed by in a large part Imperialism, that they are willing to work for food. Over here they only pay VFX workers overtime in food. Go Amrrrrica!

      Yes, because it's so easy to just pack up and change a career you're passionate about and have placed hundreds of hours of work into. Especially in countries with deflated economies and rising un-employment.

        Alvin Tofler said that illiteracy in the 21st century won't be about not being able to read and write but about not being willing to unlearn and relearn.

        If there's no demand for your product, then you have two options.

        1. Stubbornly keep making a something no one wants.
        2. Do something else.

        I don't think this is difficult. You guys shouldn't need an economics lecture to see how this works. Passion is irrelevant. Hard work too. If you make something that no one is willing to pay for, and you stubbornly persist...who is to blame?

          True, however, clearly by box office sales most of the highest grossing films are VFX heavy, so saying there is no market is stupid when clearly there is a massive one.
          We are saying the money being used to achieve these Oscar winning/ box office smashing films is
          1. not being distributed properly or planned for
          2. producers screwing vfx companies to bid over being the cheapest house to produce the work therefore, they need to cut staff, make people work over time and pay them less.

          Last edited 28/02/13 2:20 pm

            But how is this different from working in a Chinese restaurant? You see a nice, big, successful Chinese restaurant. The boss drives 5 BMWs, all from this year. And the international students who staff the floor are on $10 per hour. Is this unfair distribution of wealth? Or should those who have complaints take their labour services elsewhere?
            Complaints about unfair distribution are moot, because no one is forcing these people to do 3 year TAFE certificates in motion graphics. No one is forcing them to compete with other motion graphics freelancers for work. Above all, no one is forcing them to accept a life in which they can't get by on their wage.
            No one likes my singing, but do I complain about it? No, I work a full time job in the day and I run a business at night. Unfair distribution of wealth is the catch-cry of lazy socialists (all of Australia).

              tron, you have no clue, VFX artists are not lazy, you need to stop talking.

                Dear Tron, 85+ hour weeks for 8 months straight the moment I got off the plane....New Zealand is a beautiful country and I didn't get to see any of it, but then again I am lazy like that....I hope you enjoyed Avatar

                +1 why do trolls post, I don't get it at all?

              do you like working a reasonable day under decent conditions? people didn't until they banded together and fought the power of the industrialists. go learn some history before you start broad brushing anyone after a fair go as a "lazy socialist".

              dickhead.

              It's different because those waiters working at the Chinese restaurant didn't need a 3 year TAFE certificate to work there. The boss gets paid more because he put the hours in and runs the damn business. The people working in the VFX industry have those certificates, put the hours in and still get next to nothing for their work. True, no one forced them to join that industry, but the lack of a union and greedy corporate arseholes does force them to take a stand. This isn't about distribution of wealth, it's about getting paid what you deserve. That's WHY we live in a first world, democratic nation.

              Last edited 28/02/13 4:33 pm

              when you say "If there's no demand for your product..." and "how is this different from working in a Chinese restaurant?" makes me think all I can say to you is re-read the article so you don't sound like an idiot...
              obviously there's a demand for VFX in the industry, and it only takes 5 minutes on youtube to realize that...
              the owner of the chinese restaurant drives 5 BMWs, not filing for bankrupcy...

              so make yourself a favor and read the whole thing again...

              "But how is this different from working in a Chinese restaurant? "

              Subsidies.

              if you only experience how people felt from the beginning of production till the end, and expecting the day that you knew that this is only for the meantime then contract is gone and then you need to chase those paths again in same hand like ANG LEE and after all the heavy works which you mean is "LAZY" which is sacrificing a family , friends, health until.

              i almost wanted to cry.

              If you understood what was actually happening you would have an argument. But you don't, it comes down to one simple thing Daniel Radcliffe gets paid 40.5 million dollars per movie and most movies have multiple actors at high budget costs only to get replaced with a digital double for 40% of the movie and Hollywood while readily paying that insane type of salary to actors, in the same breath says that VFX are too expensive when they are constantly bargaining them down and pay between 15 and 20 million for most VFX budgets. And in the case of modern films more than 50% of the movie contains VFX work. So in that case the VFX actually have more screen time than the actors you are paying four or five times the cost of the VFX to. And the point of effects is to make the actors look good or replace the background so no one ever knew it was digital. Basically VFX are used to make a movie what it is, and there is no recognition for that and no job security. Jumping careers is not as simple as you want to believe it is and a lot of people in this industry actually enjoy what they do. The simple fact that we enjoy our work allows us to be taken advantage of because in many situations people get lost in their work. In your case you are comparing apples and oranges VFX workers are not on par with low wage wait staff. But you can keep trolling with your ignorant comments because you are obviously just trying to piss people off. Just know that if enough VFX workers get truly pissed off and strike media stops not just movies. All of tv, movies. Commercials and some broadcast mediums rely on visual effects.

              The other thing I would point out, just quietly Tron, is that the Boss in that Chinese restaurant is a criminal. No other word for it. If he is paying his employees (many of whom are not young enough to qualify for trainee wages) $10 per hour then he is paying them less than the minimum wage. That wage for an 18 year old trainee (in a proper traineeship) is $11.18. For a worker in a restaurant who after a few weeks could not be called a trainee the minimum wage for a casual employee is $20.30 per hour....http://www.fairwork.gov.au/pay/national-minimum-wage/Pages/default.aspx In fact may of the employees in Chinese restaurants (and some other businesses and nationalities) are being paid less even than that. Many of the new immigrants at my wife's language school are paid as little as $6 to $8 an hour by Asian and middle eastern employers both in the hospitality industry and in factory employment. These employers also don't pay their workers PAYE tax contributions, don't pay the mandatory work cover insurance and often don't have any records for their employees. Their workers often work 6 or7 day weeks, for 10 to 12 hours a day with no protection from injury, no sick leave, no holiday pay, no superannuation contribution. If they get hurt at work there is no Work Cover for them. No... their boss will deny all knowledge, "they never worked for me". "Prove they worked for me. They have no pay slips or tax details". No protection. All because their employers are able to exploit them because they lack the knowledge or language to protect themselves. Criminals. Quite a few of my wife's friends came here on student visas arranged for by companies which charged tens of thousands of dollars, expecting to enter courses at university or private colleges, only to be told when they got here that they had to go to work to pay much much more money before they would be allowed to do the course. 5 years later and after getting permanent residency they still have not had one day of the course. Are these people lazy socialists? Are they being treated fairly? Given their way the majority of private industry would do this to all employees. Don't try to deny it. They are always trying different ways to do it even now. In this country with the cheerful support and conniving of the Coalition. Remember Work Choices? Seen companies shifting people onto contract? Shifting their employees into Employment companies with no assets? All to screw the workers while CEOs and managers get bigger and bigger salaries, and gigantic golden parachutes. Unfair distribution of wealth????
              These artists are working in the industry they trained in. An industry in which there is high demand for the quality of their work. And big money being made from it. Unfortunately for them it is a new industry (relatively) and they have not yet had the forethought or sense to unionise. While employees have no power they will always be exploited. The vendors are forced to compete to be the cheapest so that movie houses can maximise their profit, but being forced to compete against subsidisation in other countries isn't realistic. And who ultimately gets screwed? The artists/workers. Or the poor bloody restaurant worker. There is nothing wrong with a business making a reasonable profit. There is something wrong with a business making a huge profit while breaking laws, or behaving unethically. Unfortunately ethical business these days is too often an oxymoron.

              Last edited 03/03/14 6:15 pm

          Where your argument fails utterly is in the fact that there is plenty of demand. Very few films are relased in cinemas these days that do not rely on VFX in some way. The problem is that film makers are used to the fact that their unionised limo drivers are earning $1000 a day and, like so many other industries, they see sub-contractors as a way to cut costs to pay the absurd wages being doled out elsewhere.

          >> "If there's no demand for your product"

          Hmm... The VFX heavy "Life of Pi" made.... lessee... half a billion dollars so far. In fact, almost all the highest grossing films of all time were heavily VFX films. About 90% of all movies being made have FX in them. I'd say the demand, quite obviously, IS there.

          >> "I don't think this is difficult. "

          Seems to be for you.

          >> " If you make something that no one is willing to pay for"

          Ironic, since you, yourself, have obviously paid for it, "Tron".

          Dude read the article you're coming across as a tool.

      Congratulations on completely missing the point of the article and managing to be a jerk about it. Let me see if I can explain it to you. It's not the fact that working in the VFX industry is hard and competitive (that's obviously true) it's the fact that even the best and most competitive VFX companies are going out of business. And it's not because "there's no demand" - have you watched a movie/tv show in the last decade?! It's because something is going wrong on the financial side of things, whether that's the VFX companies fault (probably not) or the people who aren't paying them enough for the work they do.

      Try a little reading and comprehension next time.

      What an overly simplistic view. It's not about "there aren't enough top-50 contracts to go around", it's about publicly run studios and its executives who marginalize at the expense of their employees and vendors to meet record profits in the next fiscal quarter, while making record bonuses at a lower tax rate.

      Sure, a lot of industries are run this way, so your best solution is to "pick a different job" in an economy with 7.9% unemployment? Your solution would eventually lead to the end of a global economic workforce, and your analogy isn't even on the same page.

      Don't be so naive and quick to judge an entire group of people just because you can't see the bigger picture. This is also a much larger picture, and the solution can't be to just drop the bottom line anymore while the top tier are making record profits.

      Spose you'll say that to all the Qantas workers too hey Tron? You're probably a bloody public servant who clocks on at 8:57 and leaves at 4:43 each day - with a 20 minute smoko every hour and flex time. Maybe you should go educate yourself on other jobs that you obviously know bugger all about while you're battling against paper cuts and having to go to morning teas each day.

      No, it would be more like some of the top recording artist going bankrupt because they weren't getting paid by the publishers or producers...

      haha you didn't get the article at all, I might start a rant about theoretical physics in honour of you.

      What the fuck you freaking bitch .. its not your head that is on the line .. what do you do in life ? Let me guess working at the mall ? Without those hard working folks you aint gonna have movies to watch .... wake up.. So many artist out work in the dark .. and see how u just give to shit about why the fuck read in the first place.. take a walk.. and fuck off.

    I'm sorry buy your article try's to displace blame when the only people to blame are the VFX company's themselves that are signing onto contracts that they cannot hold to for prices they cannot actually work with. They deserve to go bankrupt and shut down when they run their business like it runs on will power.

      The subsidies thing doesn't strike you as a bit non-free-market? Canadian taxpayers (who BTW don't get any share of the movie's profits) basically being forced by their gov't to pay US studios to make their movies in Canada doesn't seem.... a tad off?

      When a company only has 7 or 8 major clients, and they are all doing the same thing, it's very very difficult to tell them to piss off. Do you want to be black listed from work and go out of business immediately, or slow and try and get even a small bit of money?

    Surely SFX companies are being paid 10s of millions if not more for each blockbuster movie they work on. Then where is the money going? I bet some clever investors have worked out how to bleed the cash out of the companies they've invested in.

    Shit like this used to happen to "naive" IT companies late last century.

    Here's the thing.. you have a job to do and need some contractors to do it. In this particular case it is VFX work. The various contractors come along and all bid for the chance to do the work for you. You choose the best fit, which is usually the one that can offer the lowest price.. you pay them to do their job. As the contractor company, you need to set a price that is competitive, you put your bid in.. you get accepted.. you do the work. Is it, in this case, Hollywood's fault that the contractors charged too little for the job and went out of business or had to drastically decrease its workforce as a result? No of course not. It's the whole contracting method of bidding and so forth. They undercut themselves and went bankrupt.. this is tragic but credit/blame where credit/blame is due.

      Yes it IS Hollywood's fault. They foster an atmosphere in which the cheapest bid always gets the job. They know that VFX companies will work on a principle that half a loaf of bread is better than no bread. The winning bidder then has to screw its own people - who are probably young as they are usually the ones willing to work for free for no real return (for the love of the art/industry/skill/movie).

      Its a good lurk. A Hollywood producer gets A grade work at bargain prices and uses it to earn millions. The VFX company then goes under (no worries there are plenty where they came from) when they expected their award winning work would garner them new contracts.

      Its one of the reasons countries like Australia have regulations, unions (when they are screwing their members), standards authorities...

        How is this any different to every other industry in the world? Explain to me this..? It's the same in government, it's the same in construction, it's the same in manufacturing.. it's the same in EVERY SINGLE INDUSTRY IN THE ENTIRE WORLD. Contractors bid for contracts.. it's not Hollywood's fault the world's freelance/contract economy has devolved to this point. It's a fact of the industry and has been for many, many years.

        It's just easier to point the finger and blame the person who is paying for the services that they are not paying enough. What would be better is for all the industry to get together and set minimum contract amounts so no one has to undercut themselves. Blaming the consumer (Hollywood) is just a cop out.

        Retail does it.. why can't the contractors do it?

          Where it differs is that it is not always clear what exactly needs doing up-front. You might see a shot list and some story boards, a bit of pre-viz if you are lucky, and you have to go away and work out how much it is likely to cost to do the work. But there are so many things you cannot predict. e.g. How well the studio crew/VFX Supervisor will do their jobs. If a green-screen isn't lit properly, it can take 10 times longer to key out the subject and composite it over the CG background. Sometimes a shoot will be approaching the time when overtime kicks in and in their rush to finish on time they will not do their job properly, leaving it to the VFX artists to "fix it in post". And these are vaguaries you cannot build into a contract and you know that if you pad your bid to take account of them you will lose the contract to someone else.

          "How is this any different to every other industry in the world?"

          SUBSIDIES.

          Not "every other industry in the entire world" has Canada's government using it's taxpayer's money to get a US company to make stuff there.

            i don't buy into the subsidies being the difference, there are 100s of other industries that subsidies play a part in, in fact it sounds like Canada's government is doing a good job right now.

            There is an industry which is clearly growing and several large key players are on the brink so there is likely opportunity, it doesn't require exact geographical closeness but time zone is certainly helpful. Canada subsidies its industry which will in effect let it buy market share, once everything settles it now has a decent section of a big industry which it will both tax and enjoy the spendings of through its economy.

            You can draw parallels to banking, engineering, farming, manufacturing, mining, airlines, etc... Canada's government is responsible to its people and future prosperity not the international industry.

            Ultimately this is a supply and demand thing, i know there is a lot of shouting down about this, yes demand for this is high but ultimately supply is equally high, if it wasn't the artists and in turn houses would simply have so much work they put their rates up as they could afford not to win. Some people will need to leave the industry or the industry will need to grow, i know they can't become astronauts tomorrow but they are not the first or last workers to be on the wrong side of a supply:demand scale ...

            Best of luck to all those in the industry.

          The difference with VFX and the construction/manufacturing industry is that VFX don't have as negotiating power in relations to long-term reputation. Yes, they may be know as a good studio, but the 'consumers' don't have to worry about scenes in a movie collapsing one year later and killing some people, or the reel coming off and causing a six car pile-up.

          If a VFX studio suddenly goes bankrupt after the project is finished, no one would care, since there's no need to pass the blame on to later on.

          It is true that the VFX industry does often undercut itself, but it Hollywood fosters this environment and they; being the primary source of VFX work, have much more negotiating power than a multitude of VFX studio scattered widely across the globe (Being localized, Hollywood can fold ranks far more easily and effectively).

          TLDR: it's partly the VFX industry's fault for not pulling itself together. But realistically; the attitudes in Hollywood need to change for anything significant to happen

      Your example ignored subsidies entirely.

    Did you guys even read the article?

    It isn't so much about contracts, competition or profit's, the issue is that the Studio's are not willing to increase the funding for Visual Effects studios, forcing lower margins, and cannibalising the whole Film Industry by cutting off one of the newer yet most important and relevant parts of the film-making process.

      I'm sorry companies are forced to take jobs? If the margins in the job are too small you don't take the job. If you cant get contracts at the right price then it is probably time to close down and move on or restructure etc. Are there too many VFX companies out there? Perhaps this is an adjustment and all will settle down.

      Granted its probably not this simple but I am all for letting the market work itself out.

        I definitely think there is an element of that but the studios are pretty good at playing one off against the other and there needs to be more fairness in the system. If they are not careful they will end up with Industrial Light & Magic having a monopoly and charging whatever they feel like.

        "I am all for letting the market work itself out."

        did you NOT see the SUBSIDIES part of the article? How is it a "free market" if some governments are paying subsidies (against their own taxpayer's wishes)?

          Subsidies are paid all over the US as well. Louisiana, New Mexico, Michigan, etc. This is not exclusive to foreign countries by any means.

          Yes I did read the article and saw the part about the subsidies. I think saying let the market work itself out also covers off the subsidies, get rid of them. The car industry is a good example of subsidies not working. The hand is continually being extended, money and grants given yet the manufactures fail to fix the problem and appear to just be relying on these hand outs year after year.

    VFX is a tough game by all reports. But think I spotted the core problem while reading this article - vfxunion. Here's what i see - studios making huge profits, VFX companies going bust and the people responsible for the actual product working hard and getting paid poorly and not being helped by their union. Conclusion - get rid of union!

      And see, there is one of the issues. Of almost all the people that work on movies from writers & directors, to actors, to teamsters and electricians, they are all represented by some form of union.
      However the VFX artists, as the relatively new aspect of film making that was largely figured out on the fly does not. So there is no avenue to make sure that studios are not pitted against each other unfairly, or artists who may be willing to work long hours, on endless client requested revisions to shots that are outside the original bid scope and budget, don't get not paid for all the overtime.

      There is no union, they are trying to get one up and running. Sadly, the unions are a large part of the problem, not the solution. I don't think the big studios are making nearly as much money as you think, not if a company like MGM can go under, as they did in 2009.

        >> "not if a company like MGM can go under, as they did in 2009."

        You should really tell MGM they "went under." They seem to think they've been cofinancing movies (like the new "Die Hard" and "Hansel & Gretel" movies - both in theaters now!)

        Maybe you can do some extensive research and get their contact info from, say, www.mgm.com ?

          The MGM name might live on but, like GM and Chrysler, they went through bankruptcy and are at best a shadow of their former self. They no longer have the ability to make films on their own and the only thing that saved them from being broken up completely was their back-catalogue. They couldn't even sell themselves to any of their competitors, so dire was their situation.

      >> "Conclusion - get rid of union!"

      Done! ...Since no union exists, nor has there ever been one for VFX. (As they stated several times in the article you claim to have read.)

    It's the same as every industry, everyone cries poor while at the same time trying to undercut everyone else so they get the contract.

    I don't know if there really is an answer. To get the job you have to do it cheaper, but you do it cheaper and your ruining your whole industry...

    I think this is a Hollywood accounting at its best.

    Might be a good idea to spell out what "the crisis" is, right at the start. Just for those of us that didn't know we had to panic or that there was a crisis in VFX.

      >> "Might be a good idea to spell out what "the crisis" is, right at the start. Just for those of us that didn't know we had to panic or that there was a crisis in VFX."

      I think there ARE some articles spelling it out. (The one your replying to, for instance.)

    @gizmac - That's the point of the article retard. You need to READ through it. It's an article illustrating the troubles of a young industry....

      Charming. Perhaps if you knew how to write, you'd know to LEAD with the problem rather than scatter it throughout.

    Seems very similar to the gaming dev industry. The only people that make money are the big labels (movie studios) and everyone else gets screwed.

    Sure this is about too much supply and a very competative market but what ever happened to the win win business scenario.
    If you are a business that wants to always get the cheapest option and is happy to not to give a shit if their business partner can't afford to deliver you are a blight. I guess its the same with all big businesses and we shouldn't expect any better.

    Eventually the big movie studios will screw up the market and then complain they can't find anyone to do the work and the quality will suffer.

    I'm glad i heard about this. i'll think twice about paying to see any further Ang Lee movies based on these comments. I wonder if the studios screwed him over on his cut and blamed the VFX being too expensive. Either case an artist blaming other artists for wanting to make a living smacks of hypocracy. Maybe he should have asked what the studio made in relation to what they paid him and the VFX artists.

    The VFX companies should get together and start producing their own movies. People tend to see Pixar movies because they know what they are getting. Perhaps these VFX production houses should follow their lead.

    Er... I the problem is there IS no union. VFX artists don't have one, unlike every other facet of the film industry.

    I'm hoping that this means we might actually see some good movies wherein I don't have to sit through some visual effect artists self-masturbatory idea of what a good viewing experience is.

      Not a "Pi" fan, eh?

    Some people miss the big points.

    First, if the VFX industry closes shop in the USA because of competition with other countries that is sad but part of globalization. It's a price war, and we're fighting each other and companies abroad.

    Some countries displace U.S. workers because they exploit a cheaper labor market. The companies doing this include all the major U.S. VFX vendors! They have branches in low wage countries. One Hollywood company compels their workers in another country to pay a deposit to get a job - and the employee loses the deposit even if dismissed. Cheap labor is part of the economic reality. Let's just accept that if the work can be outsourced to reduce labor, it will.

    But when one side has tax incentives and subsidies to help them compete, now that's not competition. That's a government buying an industry. It's a violation of trade agreements. And that's something to talk about.

    Second, the film industry divides all workers into two groups called above the line and below the line. The above the line usually get great deals, lots of upfront cash, a percentage and residuals. This includes your actors. Below the line, some may get residuals and those with unions are well protected from abuse.

    Filmmaking is hard work, and for many reasons, including interest payments on film financing, the film's schedules are made as short as possible. Those involved in "production", which means shooting the film, are almost always union workers and get paid every day. For example, if the director or studio is not happy with today's work, and they decide to extend work a day to do it over, almost everyone on the set (some above the line people are salaried but they get a share in the profits) will get paid another day. This includes the actors and crew. Now if the director or studio are not satisfied with the visual effects, or make editorial changes, and want to spend another day to do it again, the visual effects vendors will usually not get any extra pay. Artists at the company may get an extra day's pay, but if they work a double shift they might only get their regular day rate, forget overtime. I worked on one film and the first week we were told we would be working 7 day weeks for the next 6 months for our 5 day pay. This may have saved the VFX company two million dollars. The film made over a billion dollars. (By the way, the CEO has gone on record lamenting the problem in the VFX industry.)

    Thirty years ago VFX artist made good money. But sine the mid 1990’s wages have been flat and fallen. In real buying power the VFX artist has lost 1/3 of their income. When any of the film unions or guilds strike, VFX artists lose work for weeks and months. So a great salary can become average or below average fast. Again, as many readers point out, we are free to change jobs. More than half the artists I have worked with in 30 years have left the business or supplement with other jobs.

    Part of the problem is natural foreign competition and part is a trade war. If a company in the Country A develops a great new technology, or has a great reel, or is more efficient - then that's just hard knocks and they win. But if that company has lower rates because they cheat workers or pirate software or get government aid, that's unfair. If that company benefits because their country gives tax subsidies to buyers that's not competition, that's bribery.

    The third leg in the problem is just greed. Actors and studio executives make it a game to see how much money they can get. If a film is a collaborative effort, why does one actor get $20 million plus points and residuals? Because the actor is a unique person who's last five movies made lots of money.

    The top 50 grossing movies all have some VFX and almost all are VFX or CG animation dependent. The studios/production companies have learned they can name their price. One film stopped VFX work last year for six weeks when the VFX company asked for more money to cover change orders and an expanded work order. After six weeks the VFX company was given the answer - their fees were reduced! Imagine going in to a restaurant, ordering a meal and then ordering desert, and telling the waitress you are not willing to pay for desert and want a discount on your dinner. By the way, the film earned over $500 million in domestic (US) box office.

    One solution of course would be for the non VFX above the line and studios to look at sharing more of the up-front wealth. They could operate on a cost plus basis just like production does. Others have suggested points and residuals.

    Probably the only way to fight foreign subsidies is by taxing distribution. An income tax surcharge will just give the companies a reason to move to another state. But a tax on the ticket - say 33%- will hit them hard. A 33% tax on a box office gross of $10 billion would pay for a lot of subsidies to cancel the foreign subsidies. And only give California subsidies to companies that don't take any other subsidies. (0f course the box office in California was only a small part of the $10billion. )

    No one wants to see ticket prices go up. But ticket prices are down because studios are taking tax subsidies from other countries and other states. Ticket prices are down because the VFX companies and artists are not paid fairly.

    There's no reason to tax tickets if the studios would budget and pay artists fairly. There's certainly enough in $10 billion to pay everyone fairly.

    I won't hold my breath. Excuse me for wasting your time. Please turn off your cell phones and enjoy your green screen.

    I'm studying to be an animator, so this is.... disheartening to say the least.

      So wake up and smell the coffee.

      Games industry?

        In Australia the games industry is even more of a basket case than the VFX industry.

      yeah, shit like this made me stop being an animator.

    I wouldn't mind less vfx in movies anyway. Every movie looks like a game these days.

      It is not only those films that use VFX. Gangs of New York, Sherlock Holmes and even Underbelly Razor were only possible because of teh VFX used to build old time New York, London and Sydney.

      the biggest compliments a VFX artist can get is "the cinematography was gorgeous", "the stunts were awesome. I can't believe how many cars they crashed", "the sets were so pretty", "special effects did an awesome job with those explosions". Why? Because that tells us you didn't even know we were there. VFX is being used in 90% of the movies you see nowadays and I'm not just talking about the obvious ones like "Avatar" or "Avengers". I'm talking about your romantic comedies like "the Proposal" or dramas like "Flight" and of course period movies like "the Pianist" or "Schindler's List". Sometimes we do something as simple as adding a tear or marrying the performance of actor A in take 1 with actor B in take 2 or making sure your favorite film stars' skin is absolutely flawless. And what about your TV Shows like all the CSI's, 24, ER or even Ugly Betty just to name a few. I encourage you to go on google or different VFX houses websites'. Take a look at some of those VFX breakdowns...you'll be surprised by what's real and what isn't.

    From the absolute ignorance of some of the comments, it just confirms that people need to be educated and made aware that VFX is not like flipping burgers at McDonalds. These people are highly educated and talented, are on the cutting edge of technology, and are responsible for 100% of the movies, TV shows, and commercials that exist today (bet you didn't know that even the simplest, cheapest commercial uses VFX). Yet they are treated like sweatshop workers.

    There's no "Make Shrek" button or "Insert Ocean Here" checkbox.

    So show some respect. A lot of the work these people do can't be applied to any other career. The attitude of "if you cant deal with it then find another career" doesn't really hold up when without VFX artists you wouldn't have the entertainment you take for granted.

    In your analogy, the contractor isn't at a fixed price for whatever work you drum up or take away after the contract is made. You have a contract for exactly what you want, and you need to renegotiate if you want more. Hollywood doesn't do that. Their contracts are for set money and nebulous demands. The director can autonomously want 15 different versions of something before he makes a decision, and the studio can cancel shots with no penalties. They can do this because they write the contracts, and the vfx houses either take it or don't work.

    Your contractor, after all, has as many possible clients as see his adds, but vfx houses only have a handful. One of the reasons Rhythm and Hues came into a cash crunch is they invested in R&D for things that the studios decided they didn't eventually want (even though they contracted for it), and refused to pay a cancellation fee.

    "For instance, the Canadian province of British Columbia has paid out $437 million in tax credits to the big film studios in 2012/2013, which Canadians now have to make up for by paying more for health care and increased taxes."
    And there has been no revenue coming into BC from Film and Television, because Canadians are stupid.
    The rest of the article is pretty salient, but that bit was inaccurate skewed troll fodder.

    Where would Alex Proyas have been without VFX in The Crow...?! It would have been one hell of a short film. VFX is really only half the story, it's ALL post production staff that are suffering, sound design is even more overlooked.
    Post production are the unsung heroes of modern film that get's the product it's final tick of approval before it is released, working to a deadline set by a studio that has no clue, and saving everyone's arse. Overworked and underpaid, definitely... but generally just undervalued.

    'No problem, we'll fix it in post'

    Wouldn't it be cool to see the stars responsible for the VFX getting billing over the actors?
    I mean who goes to a blockbuster these days expecting good acting?
    But expecting awesome VFX is a given.

    Bring in 15 bus loads of Mexican illegals and train them to do the job for $2.50 an hour.

    Last edited 01/03/13 11:05 pm

    Um. How is technology a weakness?

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