Wednesday, June 22, 2011

VFX Guild?

I wanted to get back to what Alex F., Steve Wright, Steve Kaplan (TAG), Scott Ross and others are saying about the state of the post-production visual effects industry.

Let's be clear: post-production visual effects is not Feature Animation. Post-production is not an IP (intellectual property) derived trade. It's workflows and pipelines may be protected by trademark, copyright and NDA (non-disclosure) agreements, but those systems are simply designed to make the IP-owner more competitive within the post-production marketplace.

(Digital) feature animation and those companies that service (digital) feature animation production are not part of this discussion. As long as America's ability to design story, music and games remain our top intellectual property export, this area will remain largely domestic due to its ability to bear the cost difference between domestic development and overseas development. The specific production workflows involved in a story-based project require significant daily modification, from beats to layout, to such a point that the necessary choreography between story teams in multiple timezones would harm the process.

So we're talking about a bid-based service center that provides a contractual delivery of a set of shots. Much like a general contractor, a VFX company will provide a bid, project management, milestone delivery and often, change orders along the way. Toss in up to two years of free bid-related proof-of-concept tests, wink-and-nod overage forgiveness, horse trading, and studio pressure linked to potential future business, and the general contractor paradigm is obliterated. No GC in the world would still be in business today if they ran their construction business like a visual effects house.

And yet this is the model. No wonder why we're seeing drastic cost saving strategies in the New VFX Era. I'm curious to see how the IPO (initial public offering) goes for a major visual effects house in 2012. Sure, Pixar made it work. They own their product. I just can't see a publicly-held visual effects house trading in Pixar numbers given the market today.

The Tail Wagging the Dog

So in order to be competitive in the marketplace, in order to be low-bidder, you need to find a way to cut costs. In the Renaissance of VFX, back in the late 90s, ILM could call the shots, adding a sizable percentage to the bid to offset potential workflow overruns. Sony Pictures Imageworks, underwritten by parent, Sony USA, had underbid their competition to take the loss, knowing they had the deep pockets of their parent to keep them in payroll.

In the New Era, to survive, companies must find a way to keep the bid and deliver the product without 911 bail out. 911 work is sometimes shared by the client and the initial contracting studio, sometimes not. In all cases, 911 work is expensive.

Here's the thing about contract work: it's like getting to the check out counter with only fifty bucks in your wallet and sixty dollars worth of groceries on the conveyor belt. You simply toss items back to the store until you're under budget. Same deal with VFX. Can't do a 3D fluid sim? Make it a 2D solve with some canned smoke elements. No one will notice. Done.

I mean, we notice, right? We can tell if show effects are crap. Sure. But to the studio, it all about the bottom line. What if first and second unit production costs were greater than expected? What budget gets cut? Do you want simulated digital creatures or 50/50 animatronic puppeteering? Maybe we rewrite to get rid of the creatures entirely.

The tail doesn't wag the dog. That's just an illusion.

VFX Guild

The only (and this is a long shot) way this industry can command the attention of Hollywood is to form a guild, much like the Screenwriters Guild or the DGA (Directors Guild of America). The only way.

Why is that so difficult? Nobody wants to be the only guy in the guild. I have seen talk about IATSE 16 at ILM. Yeah, so George was the only kid in that sandbox. I'll talk about that in a future post. Basically same issue there, though. ILM was operating with a CBA through the Local and felt that it was unfair in that the CBA added financial obligations to their compensation packages that other companies did not have to adhere to, like paid overtime, guaranteed yearly raises and other benefits.

If one company does not join the VFX Guild, and therefore, is not bound to the statutory obligations set forth in that guild, the whole deal blows up due to market forces. I can't think of a company that would risk that, and certainly not in the name of the poor VFX artist who typically makes more than 100K annually.

For a guild to work, everyone needs to be in.

This general topic is currently being discussed among the active membership of the VES (Visual Effects Society). How do you fix the VFX industry? Where are we headed?

I'll keep you updated. Stay tuned.

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