Why There Were 400 Visual Effects Artists Protesting at the Oscars

You have to hand it to the Academy—there’s hardly a higher profile way to draw attention to the plight of the Visual Effects industry in Hollywood than playing the theme from Jaws before cutting off an Oscar-winning VFX veteran explaining how fucked VFX is. If the famously-overbudget movie was remade today—or, rather, WHEN it is remade—Jaws would have a CGI shark that will be largely animated overseas, by a huge company that underbids on its budgets, doesn’t pay artists on time, and is perched on the edge of repeated bankruptcy. That’s the way the industry is built now, and the question should really be: How bad does it have to get before we figure out how to fix it?

While I’m not a VFX artist, I know many of them working in Hollywood, including some who were at the 400-person protest outside the Oscars. They’re protesting because even as more and more tentpole movies rely on big budget effects to top the box office, the studios remain well and utterly insolvent. Two of the biggest effects studios declared bankruptcy in the past year—Digital Domain, who by my back-of-the-envelope math are responsible for 85% of all explosion special effects in Hollywood, and Rhythm & Hues, who just won an award for Best Visual Effects on Sunday.

As Rhythm & Hues’ Westenhofer tried to say, before being unceremoniously chewed up and spit out, the VFX industry is in the middle of a race to the bottom. While budgets for effects look huge, they … well, aren’t, really. The time and manpower involved in a VFX tour de force like Life of Pi is absolutely insane. Months of preproduction, months more of production, and a VFX team of over 600 artists are involved. (For those without calculators, paying 600 people $50,000/year for six months of work costs, um, 15 million dollars. Oof.) While a lot of artists point to outsourcing as the problem, it’s hard to figure how that leads to VFX studios blowing budgets so badly.

The answer lies in how VFX work is billed. It’s closer to a defense contract than anything else. Multiple studios compete against each other, bidding on work on a limited number of massive films, each trying to undercut the other without strangling themselves on shoestring budgets. Once those budgets are in, it’s hard to change them—which means that it’s hard to come back later and say “that CGI tiger you wanted is gonna be harder than we thought, and also we have to pay overtime.” So studios push back on one of the easiest places to push: Their artists.

Artists will regularly not get paid overtime, even when working 15-hour days and weekends. Studios will renege on contracts, just to see if they can. Companies will hold back payroll for as long as possible. In the wake of Rhythm & Hues’ bankruptcy, there are rumors swirling that they’re refusing to pay for healthcare benefits for employees. I’d call these horror stories, except they’re so commonplace that both “horror” and “stories” seem like inappropriate words to use.

In an interview after winning Best Director, Ang Lee said he wished that VFX weren’t so expensive. Well, sure. No doubt he also wishes post-production, pre-production, film stock and actors were cheaper, too. But while he suggests that the costs are for research and hardware, the number one place to put pressure on budgets is the people doing the work. This isn’t anyone’s “fault,” it’s the inevitable result of an industry that is more interested in getting big, exciting work than in paying on time. There are too many people, in both management and in the lower level positions, who are willing to break their backs bending over for film studios.

A concept artist friend gchatted me while I was writing this, saying he was reconsidering the VFX industry entirely. But there will never be a shortage of new art school graduates willing to put up with anything to work on movies. Full Sail University, a for-profit school that cranks out animation-ready artists, graduates thousands a year. Animation Mentor, an online-only school, does the same thing for character animators. The pool of people willing to do anything to keep their jobs just gets bigger and bigger. In fact, last year Digital Domain announced an initiative to effectively charge students to work with them. What would in the past have been an unpaid internship was transformed into a negative-pay internship.

VFX blog VFXSoldier managed to get ahold of audio of Digital Domain’s CEO explaining this new business model:

Now this was the controversial element of this and the first discussions with the Department of Education, [‘cause] it sounds like you’re taking advantage of the students. But we were able to persuade even the academic community, if we don’t do something to dramatically reduce costs in our industry, not only ours but many other industries in this country, then we’re going to lose these industries

In other words, we have to force students to subsidize the industry, or it will go away. Unsurprisingly, Digital Domain declared bankruptcy within a year.

So what do we do? How do you keep an industry from collapsing when there’s so much pressure from the upper management to slash costs, and from the artists themselves to keep from rocking the boat lest they get thrown over for fresh meat?

A union would do it, if it could get up and running. Every other film trade has a dedicated union that defines how overtime can work, how high wages should be, whether work can get sent abroad. VFX artists don’t, leading to awful hours and late pay. But getting one in place might be hard when the industry is already suffering. The other angle would be for management to actually stand up against the clients—which maybe makes me sound like a snide asshole, but I’m not! There are only a half dozen major film studios paying for big effects. Pissing one off would be enough to end a struggling studio.

But that’s what’s going to happen anyway. We’re careening towards the VFX industry’s Great Recession, with companies failing left and right and all of us forced to confront a world where effects are considered a product, something you pay a flat fee for and complain if it doesn’t work, instead of a service, something collaborative between artists and directors, where the pay is based on value added instead of who can bid lowest. If management can shift their attitude, then maybe there’s hope for turning around before the entire field crashes and burns and has to be rebuilt from the ground up.

 

Christian Brown doesn’t do Visual Effects work because he doesn’t have the patience. // photograph by neonmarg

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17 Comments / Post A Comment

I remember touring Full Sail with an artist/filmmaker/musician friend (who later went to Cooper Union, for free) who was considering their program. They kept going on and on about how one of their graduates had recently made the texture on Yoda’s cloak in the (then) new Star Wars movie or something. Only $60k a year for a shot at that kind of glory! Thanks but no thanks.

Also, has the VFX industry considered hiring scarier-looking dudes to work for them? It seems to work well for the Teamsters.

deepomega (#22)

@stuffisthings Man, some of those VFX guys look like lumberjacks. You have no idea.

SmirkyPrez (#3,344)

So remember this the next time you hear Hollywood complaining about illegally copying movies and putting their union employees out of work: Anyone not protected and backed by a union can be treated as a nobody and ignored. You don’t matter. You aren’t a part of the club, and I might “feel bad, but I’d do it again” when it comes to taking advantage of people in vulnerable positions. Hey it’s a free market, right? So if I can get your skills or product so cheap you go out of business then too bad. This shows the bad aspect of unions and the powerlessness of the non-union person who is shut out of the club.

emberglance (#3,350)

@SmirkyPrez How can this story “show the bad aspect of unions” when one of its main points is that the industry is suffering due to the lack of any unions existing? Talk about projecting…

emberglance (#3,350)

@SmirkyPrez p.s. interested to hear about your continuing illegal copying of copyright material, good luck with that.

deepomega (#22)

@emberglance Well, I think what Smirky is driving at is that unions are only interested in protecting themselves. So, like, SAG would happily take every dollar from VFX artists if they could give it to their own dues-paying members. This is true! But, also, is pretty much how every institution behaves.

andrewss (#5,778)

@emberglance My niece is working for the Rhythm & Hues Company and she likes her job a lot, creating special effects requires a lot of skills and imagination. The last week-end we were watching one of the twins of evil movies and she told me their management team came with a couple of ideas that seem promising, hopefully they will manage to save the company from bankruptcy.

I had no idea about ANY of this until I came across this blog post on Twitter today: http://thebigsocialpicture.blogspot.co.nz/2013/02/the-oscar-protest-that-you-didnt-know.html How dire.

I personally find the outlook for all of the creative industries in general pretty bleak.

saritasara (#2,710)

It’s a pretty serious problem, actually. A lot of people have been mentioning unionizing, but given the international nature of the industry that wouldn’t really be a practical solution to the larger issue.
Especially when you have countries like Malaysia, where labor costs are already low, and on top of that the government grants huge subsidies that allow their studios to outbid those in the US.

In terms of artists dealings with their employers – not getting paid, or not getting overtime– then I think a union is definitely a solution. But in order to help the industry as a whole, it does need to start being treated like a service.
No matter how good a movie does in the box-office, the VFX studios only see whatever flat-rate fee was agreed upon to begin with. Yet actors, producers, etc. get money from the gross profits of a film. Which is especially egregious when you consider that in so many films these days (like Life of Pi) the VFX, for better or worse, is as much a major “actor” as any of the human stars of the film.

deepomega (#22)

@saritasara Hi there, I’m the author here! I agree that internationalization means that unions would be tough to implement – although, presumably, once unions existed they’d just say “studios can’t go overseas for work.” That said, I have only ever heard horror stories about outsourced VFX, and I’d really like to see someone break down the money on them. My hunch is rush rates to fix the mistakes made overseas probably end up costing more than just doing it locally would have.

@deepomega Could they unionize under one of the existing trades (like… lighting or something?) Then the union could be like, “Oh you’re using a Malaysian VFX house, well sorry then we can’t light your scene. And also some scary Teamsters want to have a word.”

saritasara (#2,710)

@deepomega Not sure about VFX so much — my experience is in the computer animation industry rather than VFX for live-action. But a lot of the issues, especially re: outsourcing, are the same.
From what I understand the quality at a lot of the “cheap” studios is definitely lower, overall. So what a lot of the big studios are doing is creating their own sub-studios in Singapore, Thailand, etc. or also partnering with studios in those locations and subcontracting part of the work out to them, which allows the studio to lower their bid.
But to make that work well, it requires really tight management/direction on the part of the studio to make sure that quality is upheld.

riotnrrd (#40)

I’ve been working in the VFX industry for close to ten years now, and from the smallest boutique shop to the biggest effects houses in the world, the economics are terrible. As Deepo wrote, the vast, vast majority of effects money pays for labor: it takes an enormous amount of human creativity and effort to make all the things you see on screen come alive. R&D departments work hard to make it easier, but the bar for visual quality keeps going up (compare Ang Lee’s 2003 Hulk with the Avenger’s Hulk — same company, 9 years later), so you have to run as fast as you can just to stay in place. In addition, hardware has to be upgraded constantly, software licenses have to bought, etc.

Now none of this would be a problem if the studios were dealing with the VFX studios in a mutually beneficial manner. However, they do not and the contracts VFX studios get are terrible. Specifically, one of the standard practices for studios is to force VFX studios to take “flat rate” contracts — which means a certain number of shots of a certain complexity for a flat fee. If the director or external visual effects supervisor changes his or her mind, the VFX studio eats the cost of the changes. For “Avatar,” whose director is infamous for being picky and fickle about his effects work, this resulted in Weta losing in the neighborhood of $50 million. Effectively, Peter Jackson (and eventually the NZ taxpayers) funded the biggest-box office movie ever, and saw none of the profits.

Why do Weta (and other studios) sign these type of contracts? Largely because they have no choice. There are effectively only six movie studios (obviously there are more, but only the big six American studios make effects-heavy films), which means that tacitly or no, there is a colluding oligopoly where the studios all offer identical terms, with none of them breaking ranks to be more generous. On the other side of the economic equation, there is an abundance of VFX talent in the world, so the studios can have the VFX shops bid against each other and take the cheapest. The movie studios always win, and everyone else loses. It regularly happens that a VFX studio will take a contract that loses them money because the alternative is having no work at all, and losing even more money (and all your employees). So if you’re trying to make a profit, you have to bid against VFX houses like DD who are not even bidding to break even. Good luck!

Even worse, this terrible situation is exacerbated by governments around the world offering huge tax incentives for film and effects work to be done in their countries. Most infamously, New Zealand rewrote its damn labor laws in order to help fund Weta (and thus fund American movie studios). It is becoming impossible for American studios to compete in such an unfair market, and the macroeconomic effect of these subsidies is to increase the amount of effects talent in the world, which is the exact opposite of what the market “wants” to happen.

Mark Martino (#3,352)

There may be another way for visual effects artists to get treated fairly. They could make and distribute their own movies. They could start with short, small movies and sell them online. If a movie gets traction, it may get further distribution or get remade as a full feature. It’s not glamorous. It may not even be Hollywood, but it could be a business model that makes money and provides the autonomy artists need. There are so many movies that depend heavily on special effects, maybe it’s time for doing this. It’s kind of like a chef starting his or her own restaurant. Sure, you have to learn about business, but it beats handing control to people who don’t care about you.

Lionel Mandrake (#3,353)

I work in a side alley of the VFX business (motion graphics and commercial production). We share much of the same skills and personnel and we’ve been going through various financial contortions for the last 10 years or so, just like VFX. I managed to dig my business out of the shitter by adopting some pretty radical (for the industry) business practices.

1) I never, ever flat bid. This shuts me out of certain jobs, but there you go. I bill a per diem rate, or an hourly rate. Or, if it is a project rate, I always include an overages clause in my contract.

2) I stopped chasing the sexier, high profile projects – the margins are almost always crap. I focussed on the less glamorous work that I knew had good margins and a more appreciative client base.

3) I keep my operation as small as humanly possible, I only expand when I’m absolutely sure I have the billables in place to cover it.

4) I bill for everything, and if I’m not getting paid I shut the job down or walk. There’s short term damage from creating conflict, but the long term damage from not cutting a bad client off is far worse.

5) I stopped letting my business get treated like a doormat. The strange thing is, once I demanded respect from my clients, I started receiving respect from my clients.

I think there’s been a certain amount of naivete on the part of the VFX houses, in that they’ve been expecting somehow to get a fair shake from the studios. Which, really?

deepomega (#22)

@Lionel Mandrake Yes, all of this. I actually think a union is just a sort of institutionalized respect-seeking, which is why I don’t think it’s a solution – this is a CULTURAL problem, you know? More than anything else we need to stop people from being willing doormats in the industry. If we can somehow get actors to have shit like overtime – actors! – we should be able to do that for VFX artists. (And mograph, and all post.)

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