Outsourcing & Overseas Production & The Biz & VFX & VFX Labor Issues

The State of the VFX Industry

The State of the VFX Industry and where do we go from here

I finally got a moment to watch this talk and I think it’s great that someone has finally explained the complexity of the issues that lie before all artists working in CG, Animation and VFX.  Especially, someone without a thick Spanish accent, that no one can understand, and two individuals with street cred working in the business for years.
I would love to hear a talk from these same two guys, that goes beyond the explanation of what is wrong with the industry.  I would love to hear more about their specific solutions, which they seem very determined to make the trade organization and union work, and further explain specifically how these two groups/orgs could even have a chance of working… when it feels to most artists working –  the “ship has sailed (pun intended).”
I would love to have questions like these answered specifically:
1 – How can a union for VFX be effective when studios are located all over the world and have their own rules regarding creating or developing unions? Specifically, I would like to know how a union here in the US could compete with studios overseas who may or may not have unions who hire non-union workers for their shows.
2 – How can a trade organization enforce any regulations when an American movie studio can simply incorporate overseas to avoid any American laws or taxes against runaway production?  Even better, studios could just buy cruise ships and sail to wherever the money is… and incorporate there.
3 – Even if a union were to succeed somehow (see Q #1) what exactly would this union do about the 1,000’s of workers who are no longer employed and cannot join the ranks because they are not working as a formal employee at a facility.  How do you create a solidarity of work force when no one is working or worse, those working are forced to take jobs as mis-classified contract freelance workers for smaller studios because those are the only studios hiring domestically?  BTW, if you are not a legal employee, you cannot join a union.  I would say 75-80% of my colleagues are freelance contractors and although employed, are not a w-2 employee of any facility.  Where is the workforce?
4 – How would a trade organization go about lobbying to get subsidies to end? Specifically, how would they do this?  My father worked in the apparel industry and I listened to his woes at the dinner table as I grew up.  His choice was to create a sourcing company to find companies overseas that could produce garments cheaper than US workers.  Everyone in the apparel industry hated him at first when he started this company, and then later they all wanted to work with him because NAFTA basically did nothing to help the situation.  Sure assets are taxed when they come back into the country, but there are ways to get around that.  Do you tax every asset built for a movie set?  What if there are more revisions?  Do you tax it again?  You cannot find a American company now a days that can sew garments at the same level as India and China, it’s a lost art.  How would a trade organization fix the fact that the world is now flat and we are competing globally?
5 – If it has taken 25 years for Scott Ross to organize the VFX facilities – why do you think a trade organization can happen in 6 months?  Why do you think you can now turn this thing around with the complexity of the entire industry moving… not only out of California, but out of the US?  This is a time sensitive issue.  People are losing their houses, their cars, and are faced with leaving the industry entirely to keep their kids in school and food on the table.
6 – What is the schedule to make all of these “solutions” you propose happen?  Is that schedule going to jive with the fact that it may be a day-late-and-a-dollar-short to make any change?  I would like to see a schedule.  If it doesn’t happen in six months to a year… things look dire to most artists working now.
I ask these questions not to be arbitrary or argumentative.  I ask because these are the questions that are debated at bars and dinner tables by those working in the CG/Animation/VFX industry for years, and we haven’t heard any specific answers.
I applaud the ability to finally explain such a complex issue in a clear and concise way, but…
By the time anything gets organized, will there be any creative left wanting/financially able to stay in the industry?

P.S. It might be good to change your graphic representing the people working on these movies from a guy at a workstation to a paint brush, pencil or some other artistic icon.  The biggest problem is neither the audience or the movie studios see VFX workers as artisans or creatives.  Only we can change that.I also would like to coin the term VFX/CG/Animation Creatives (rather than workers) so we can change the reputation of what we do for film making. And, we should band collectively. There is no VFX only labor issues or any “sister” Animation industry. We are all in this together. Meaning anyone working on something that is not shot in camera. Period.

P.S.S. My animation students have great concerns regarding all of this since they are about to embark on the same journey into Animation and VFX and all worry they are making a bad decision.  My advice to them goes like this… There is a lot of money to be made.  That is apparent at the box office.  It’s going to take a good year for everyone to decide how the pie will be split.  And, once the dust settles… I am hopeful about the outcome, but also realistic.

(Visited 15 times, 1 visits today)

14 Comments

  1. Scott Squires

    1. The studios by and large are here in the US. More specifically Los Angeles. I refer to vfx companies as companies or facilities since they do not fund and produce the content on their own (i.e. no a studio).
    Realize the entire rest of the film crew is union. The finical impact on a company to unionize could be minimal. i.e. not changing the equation in terms of pure dollar amounts. Realize the studios are not looking for the cheapest possible place to do it. Look at ILM doing work on Star Trek. If all the studios want to focus on and all we as vfx artists want to focus on is the cheapest possible costs, then we’re going about it wrong. The directors, writers, production designers, actors, etc are not chosen because they’re the cheapest. Keep in mind many of the companies elsewhere are simply branches of a main company somewhere else.

    2. Trade association is for the vfx companies. What if all the top vfx companies companies agreed on a given business model? Such as cost plus? Then the companies no longer have to underbid and go out of business. With a majority of the companies on board where are the studios going to go for their tentpole movies? They can’t simply farm it all out to 10 man crews around the world. And that’s a different solution/issue than subsidies.

    3. Unemployed people. All the more reason for people to sign their rep cards now instead of waiting until they’re unemployed. There are some people who know they will be laid off but still seem to be unable to come to grips to sign a rep card.

    Freelance contractors- Film crews are made up of freelance people. However that doesn’t mean they can’t unionize. They’re all in the union. Companies request people be independent contractors because it’s cheaper for them (no taxes, no labor laws, etc). It’s also illegal to do so. Most in vfx do not qualify under the iRS as true independent contractors. As soon as vfx people smarten up and stop being taken advantage of, the sooner we can turn this around. Keep in mind many in the film business have loan out companies (i.e. payment goes through their own companies) but these are still structured to cover the union position payments.

    Also note it doesn’t make sense for non-employed people to be in a union. Who is the union bargaining with? How are the contributions and benefits being paid for? I also believe there are laws in place that you have to be employed. Not every thing a union does or can do is of their own choosing. There are very specific federal laws about what they can and can not do.

    4 -Trader org would be global and as such no likely to deal with subsidies. (i.e. some companies will win/lose as subsidies change). Unfortunately the subsidies are a huge problem. vfxsoldier is in the process of trying to get WTO coverage to support their own regulations. Other avenue is to let tax payers know about the cost to them, their loss of money and how politicians are giving their money away to film studios when it could be put for public use. Not sure why ukuncut and orgs have yet to figure this out.

    5- I don’t think anyone said 6 months. The point is the at least some companies are starting to realize what’s happening. Same as with vfx artists, it seems to take the longest time just to break through with the basic concepts and have people open to considering it. Organizing is a faster process than getting mind share.

    6- Timeline. If artists signed rep cards today the union could file to unionize a company tomorrow. Workers control the speed of this. If they truly wish things to change quickly they could do so. But everyones simply dragging their feet and wringing their hands. The trade assoc is up to how anxious the companies are.

    Lot of information at http://effectscorner.blogspot.com and vfxsoldier.com among other places.

  2. Stix and Jones

    1. 1. I apologize. When I said studios are located overseas, I meant the CG/Anim/VFX facilities. I will try to use the “facility” term from now on when I am speaking towards facilities like The Mill, Dneg, MPC, Weta, Cinesite, and all of the other VFX/Anim/CG companies that are located overseas and in Canada.

    If what you say is true, and there are actually more facilities located in the US today??? Then these facilities are not hiring anyone to actually work in the US.

    http://www.creativeplanetnetwork.com/forums/forumdisplay.php?180-Jobs

    Look at the job boards and that is obvious.

    I understand the rest of the film crew on a movie is union. We should have unionized years ago.

    I have students who have lost their jobs in Singapore who were working for ILM there… overseas. So, to say that there are more facilities over here doesn’t mean there are more jobs in the US.

    My question was not asking to clarify if studios have branches overseas, we as working artists certainly know the US studios have created branches overseas. We are the ones who start work for Sony, Zoic, etc. and are told we must sign documents stating we willing to move overseas to work for said facilities.

    My question was: How can a union for VFX be effective when studios are located all over the world and have their own rules regarding creating or developing unions?

    I am speaking to both the facilities who started companies in other countries other than the US AND facilities opening studios outside of the US with money from subsidies.

    How is this possible? Let’s take your statements into account and forget about the local US studios developing overseas.

    How do we compete with the studios getting all of the work that are located and based overseas. How do we compete with these facilities that started in a country that doesn’t respect or have unions?

  3. Stix and Jones

    2. You guys seem confident you will get the trade organization facility members to agree on a new biz model and standards and then the trade organization can just muscle all overseas competition to comply with the same bidding process. If that is the case – Great!

    I would love to hear of an example of any industry that has already gone overseas that a trade organization has saved this way.

    I have heard grumblings of studios saying they don’t need the VFX facilities and if they create a trade organization and they will just set up shop directly over in China, Singapore and the like.

    I see a US Trade Organization for VFX as a great thing, but possibly too late in the game? The trade Organization will have to compete with cheaper production overseas and Canada.

    The same idea here exists for film production – there are SAG and nonSAG shoots. The difference is better artists are on the union shoots, of course. But, we have been training those people overseas to do the work. Are we underestimating the talent pool? Are we underestimating the movie studios?

  4. Stix and Jones

    3. We have been informed you cannot sign a rep card if you are not currently employed. Steve Kaplan Stated this on fb.

    I cannot believe that there are more VFX US artists working than unemployed and I have doubts the ones who are working and fearing losing their job are so scared to sign a card. This is NOT what I hear from the trenches.

    I believe you are greatly mistaken here.

    I would say ALL jobs in VFX/CG/Animation do not qualify as independent contractors because:
    – You report to someone,
    -You are told to sit in a chair at a certain time and leave at a certain time,
    -You are working on specific projects
    – And, you are using the facilities equipment.

    Only one of these criteria distinguishes you legally as an employee (at least, in the state of California).

    But, guess what? We need jobs, so we take the the contractor jobs even when we are mis-classified as a worker… to get a paycheck.

    How did all of those freelancers on set get into a union? They clocked in hours on set and got a card. How about that deal?

  5. Stix and Jones

    4. How would a trade organization fix the fact that the world is now flat and we are competing globally?

    You say because the trade organization would be global. I look forward to watching this happen. Very hopeful. Aerospace, Automotive, Apparel industries never got global trade organizations to work. It would be a first I believe unless my facts are wrong.

  6. Stix and Jones

    5. Scott Ross told me it would take 6 months on fb. I am sure he is ideally positive when it comes to this thing and I am a big cheerleader behind his/your efforts. I enjoyed working for him at DD and hope he can turn it all around.

    But! I cannot stress how timely the situation is.

    Read: If the facilities are closing, guess what is happening to the creatives working at the facilities? they are unemployed for years now and loosing their houses and moving to the far reaches of the earth to hold it all together.

  7. Stix and Jones

    6. I would love to sign a rep card, but cannot because I am not officially employed. I have a friend who is now a union Director of Photography and he hasn’t ever work for a facility or company. He works for himself hired for shoots.

    That is because the Local 600 asks for hours on union shoots and dues to join. How about implementing something like that to think outside the box for the current employment situation?

    I know no one dragging their feet. Only a bunch of out of work animators and VFX/CG artists who cannot sign any card to even try and make things better.

    For those who are dragging their feet? I imagine they want answers. Starting with a schedule.

  8. Scott Squires

    There is no single magical solution to the problem the vfx industry has. There’s also no guaranteed solutions.

    > How can a union for VFX be effective when studios are located all over the world and have their own rules regarding creating or developing unions?

    Yes, facilities are all over the world. The only rules governing the unions are government rules, not rules from the studios or facilities.

    Some work is done here in the US and continues to be done here in the US, regardless of unions or other issues. Some studios go to facilities like ILM because they know they can handle the work to a high quality level. Less risk. It may not be the cheapest possible solution but it makes sense for certain expensive tent pole movies.

    Work goes overseas primarily because of subsidies. Kickbacks to the studios.
    The secondary reason for going overseas is low cost of living and low wages.
    So you don’t try to compete only on price. You want to provide somethings better or provide them the advantage (i.e. direct interaction with the director or a number of other things.) Nordstroms doesn’t try to compete with the dollar store.

    A guild will not fix those problems. Those are issues controlled by governments. The guild can provide more protection for the workers so they don’t get dropped without pay and some of the other things have been happening in vfx.

    >I would love to hear of an example of any industry that has already gone overseas that a trade organization has saved this way.

    The work has not gone completely overseas. The US still has vfx companies.

  9. Scott Squires

    >I have heard grumblings of studios saying they don’t need the VFX facilities and if they create a trade organization and they will just set up shop directly over in China, Singapore and the like.

    Do you really think the studios want to setup their own vfx companies in distant lands? No. Do you think there are people in all of these places with sufficient knowledge, experience and skill to start working on the next Avengers tomorrow? No. Talk is cheap. Producers and studio executives will say anything. ALl the more to instill fear in people and companies they want to continue to work for them. If the companies stood up for themselves, stopped underbidding and stopped jumping to set up shops everywhere the studios told them to this much of this nonsense would stop. Why are UK vfx companies setting up shop in montreal? Because the studios said jump.

    >But, we have been training those people overseas to do the work. Are we underestimating the talent pool? Are we underestimating the movie studios?

    Maybe we (we and vfx companies) shouldn’t be spending time training our replacements so eagerly. YEs, there are soem good people. Do they have enough with the depth right now? Today? Studios – If they find people eager to run the operations and lower their risk and costs then they will certainly try. When that big tentpole misses it release date, then they will have second thoughts.

    >But, guess what? We need jobs, so we take the the contractor jobs even when we are mis-classified as a worker… to get a paycheck.
    As long as workers are willing to tolerate illegal setups and treatment by their employers then it will continue. And not only continue, it will get worse. Report a company that is doing something illegal. Or does everyone want to try to eek out in deteriorating conditions year after year?

    >How did all of those freelancers on set get into a union? They clocked in hours on set and got a card. How about that deal?
    That deal is because the production was Union. It had signed a deal with the union. That deal is because their exists a union for that job category. There is no vfx union because workers have not demanded it. There is a camera union because workers demanded it years ago. There is a directors union because workers demanded it years ago.

    Trade association – it’s a changing world. This is much different than the auto or garment industries. Movies are not priced to the consumers based on the work we do. The companies simply allow the studios to make more profits. We do what we can. Realize that all vfx companies around the world are having to jump through the same hoops. The vfx companies have allowed themselves to be in the least leveraged position possible. And vfx workers seem to be intent on helping them do it. As long as vfx companies simply roll over, the worse this will get. Standing up as companies is one of the first steps.

    >But! I cannot stress how timely the situation is.

    Read: If the facilities are closing, guess what is happening to the creatives working at the facilities? they are unemployed for years now and loosing their houses and moving to the far reaches of the earth to hold it all together.

    Yes, so instead of complaining about it how about if the ones that are working try to do something while they can or they will be in the same exact position next year.

  10. Scott Squires

    >I have a friend who is now a union Director of Photography and he hasn’t ever work for a facility or company. He works for himself hired for shoots.

    >That is because the Local 600 asks for hours on union shoots and dues to join. How about implementing something like that to think outside the box for the current employment situation?

    Your friend does no work for himself. He is hired by union productions. He got into the union because there was a union for him (camera) and likely because he worked 30 days for a union production. There is no vfx union. There are no companies signed on as union companies for vfx work. If and when vfx workers decide they wish to unionize they could do so. That way in the future they would enjoy the same abilities as your friend. They could freelance and go from job to job and not have to worry about being paid or about benefits.

    >For those who are dragging their feet? I imagine they want answers. Starting with a schedule.
    Why didn’t everyone at R&H sign rep cards when they knew they were going to be laid off when finished? Why were the workers at DD fine with reduced salaries?

    Some workers in the UK have grown tired of not being paid for overtime. They have joined their union. If enough join then they could request to actually be paid overtime but until they have a number of people (i.e. union) it won’t happen.

    Look, to go union all you need is for 50% of the workers to sign rep cards (anonymously) . Doesn’t matter if the company has 10 people or 1000 people. The ones currently working that would qualify for a vfx union (contractor, w2, whatever) have to sign rep cards. If they had already done so in the number required, the company would be union already. I said it before and will say again it’s up to the workers how quickly this will happen. If you’re not working then I suggest talking to friends who are working. Did they sign their cards and if not, why not?

    The information is out their. You can go to vfxunion.org Anyone can email the people there directly with questions. Not sure why more people don’t.

    All workers should be asking their companies if they’re interested in a trade association and if not, why not?

    As stated at the start there is no perfect solution. There are a lot of problems and some very difficult to tackle (subsidies). Easiest thing in the world is to criticize. If people have solutions then they should post or suggest them. But until workers start doing something it will be unlikely to happen in any form. Currently it feels as if there’s only 12 people actively trying to do something to try to fix this situation.

  11. Stix and Jones

    I honestly do not believe everyone at R & H knew they were going to be laid off. Many of my friends were caught completely off guard. So off guard they had to pull kids out of school and leave the country as quickly as possible and get back to their 2nd home in LA to keep from hemorrhaging money.

    I also think there are plenty of people who still think they are fine without some kind of organization. I know my students in Singapore working on Clone Wars for ILM thought they were untouchable.

    I have heard discussion from VFX/Anim/CG people… if there was an explanation as to:

    – how the VFX union would work,
    – how much the fees would be,
    – how soon it could actually be making change,
    – if it needed the trade organization to be in place as well to work,
    – is there even any money to negotiate for with the facilities,
    – and if this new guild will be run like the current powerless animation guild, or differently… these are what I hear people questioning.

    I am just trying to help here and get informed. The last show I worked on as an employee was Smurfs, so I cannot even join your union… you see? I sit and listen to what the are saying and am trying to relay their issues to you.

    Specifics. This is what I hear from the people working who haven’t signed cards. They want more specifics as to how it will work. You are saying these kinds of specifics are there on the website? Would you like to provide a direct link? There is a lot of ranting on the websites you offer and statistics, but no specifics.

    How about a breakdown of exactly what people get for signing a card? No more videos of a latin girl with a horribly thick accents telling everyone it will be alright if they just sign a card. Specifics.

    Also, are you now saying if I am a contractor and legally NOT an employee of any facility…? I can sign a card in support of your efforts? I signed the online card thing you guys asked, but I don’t think that one counts – right?

    BTW, I am not criticizing here, just looking for answers. I could have just kept my thoughts to myself and you guys still would be wondering why cards are not being signed. Well this is why. Artists need answers from people starting the new VFX union.

  12. Stix and Jones

    I am bummed you think I am/we VFX/CG/Anim people are just complaining and not doing anything about the situation. I know all of these topics have been discussed at length by smart people who are trying to make the right choice. A career has just become a job.

    I think you will have more traction once Scott gets a trade organization afoot and something starts changing. Right now, the current biz model doesn’t speak to having any $ to play with for negotiations. Budgets are skin and bone, no muscle and certainly no fat.

    I wish you best of luck. For now, I will watch and see how this thing unfolds.

  13. Scott Squires

    >The last show I worked on as an employee was Smurfs, so I cannot even join your union… you see?
    So where did you work? Sony Imageworks? Where ever it was you could have signed a card.

    > You are saying these kinds of specifics are there on the website? Would you like to provide a direct link?
    http://vfx.iatse-intl.org http://vfx.iatse-intl.org http://vfxunion.info send in a email to VHoltgrewe@iatse-intl.com for details not found at the sites.

    >How about a breakdown of exactly what people get for signing a card?
    That’s all written up in my post on the vfx guild. Sorry it doesn’t have ranting. http://effectscorner.blogspot.com/2013/04/visual-effects-guilds.html

    1. People submit signed rep cards.
    2. When the union get’s a large percentage (60% or more) then they contact management and tell them that the majority of their workers want to be union.
    3. Hopefully the company agrees and works out a deal. This deal will involve the people who voted to go union to provide guidance.
    4. If not, then by federal law their is a vote.
    5. If the vote is yes then the company is union and all working there that can be covered by the union are now union. The union works out a contract with those who voted helping to work out the terms of what they want.
    6. Any shop that unionizes, the people currently working there pay no initiation fee.
    7. Union people pay their dues (few hundred typically but depends on your category and wages).

    If enough workers in vfx unionize then the IA will set up a separate IA local just for vfx. Until that time the closest matching union will be the temporary home. If a new union is formed then members will vote on who to represent them from fellow members.

    >Also, are you now saying if I am a contractor and legally NOT an employee of any facility…? I can sign a card in support of your efforts?
    I’m saying legally/technically you are most likely not an independent contractor. So yes, you should be able to sign a rep card. I’m not an official union rep. Send email to the address I posted above for specifics.

    Keep in mind Dreamworks, Disney Animation, Nick and Sony Animation are all union shops with animators and compositors among others.

    >Artists need answers from people starting the new VFX union.
    Plenty of information out there as well as contact forms and emails. The reps would be happy to meet with you or with a group of people. They have held informal meeting with groups. They won’t be breaking down your door. Keep in mind the union will likely be leveraged on the IA and not a totally new union from scratch, See my blog post for pros/cons.

    >I think you will have more traction once Scott gets a trade organization afoot and something starts changing.

    The problem is you may wait forever. The only reason the companies are even starting to talk is because they’re between a rock and hard place. They may well drop out of the talks. A union would boost their willingness to actually do something. And remember a union is for the workers, a trade association is for the companies. Don’t expect the companies to be offering you great benefits of their own accord.

    >For now, I will watch and see how this thing unfolds.
    You and everyone else. Sitting by the wayside simply waiting for someone else to make it happen.
    You might as well sit on the dock waving your job goodbye.

  14. Stix and Jones

    Thank you for all of the specific information. I am going to make a new post with Q & A that clearly explains each point for people who are still in the dark on this thing. Hopefully, it will help your cause. Yes, I could have signed a card when I was working at Sony in 2011, but I was only hired for 16 weeks and back then was under the impression Unions are for staffers. Thanks for clearing it up.

    Most studios won’t hire me these days anyways because I refuse to work overseas for half my rate. It will be interesting if this new information helps your cause.

    Good luck.

Comments are closed.