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:
- George Miller's Dr D Studios (Happy Feet Two) shuts down its production facility in Sydney and dumps 600 workers
- Sydney-based Fuel VFX (Prometheus, Iron Man 2) goes into voluntary administration and lays off all 80 of its employees before being snatched up by Animal Logic (Legend of the Guardians, Australia)
- Matte World Digital (Independence Day, Titanic) closes its California offices
- Digital Domain files for bankruptcy protection and is subsequently purchased by Chinese company Galloping Horse
- DreamWorks Animation announces that it's laying off 350 employees
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
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