Postmortem: (Rhythm & Hues Bankrupcy): What happened...

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Old 04 April 2013   #46
Originally Posted by Jules123: Yeah, I don't think we should be defending bad practises by VFX company owners. It only needs e.g. a writers' strike for things to be delayed across the board.

Studio delays and writers strikes are both examples of things a VFX house has no control over, and little (if any) ability to fully anticipate. Americans go bankrupt all the time when things go catastrophically wrong, even when prepared with an emergency fund, health insurance, etc. I wouldn't say their bankruptcies are the result of bad practices.
 
Old 04 April 2013   #47
Originally Posted by psyop63b: I wouldn't say their bankruptcies are the result of bad practices.

Yes you're right. I should rephrase 'VFX company owners' to the 'VFX industry'. I still say the industry needs to gather together to sort out the business practises, call in external consultants if necessary, a bit of schooling maybe also, or at least bring about a form of recommended good business practises as a form of 'awaking' in some way. If VFX companies still want to go cavalier with no safety net then they've been warned.

Jules
 
Old 04 April 2013   #48
I think these "poor practices" didn't directly cause R&H's failure. But they definitely presented themselves as vulnerabilities - or as I earlier stated: "Single Points of Failure".

Plugging these or correcting them helps to stabilize the industry.... People can say all they want about how this business is different and there are only 6 clients...

All I'm saying is "It can't go on like that". And I'm also not a fan of "participating in Gross". Clients have to be made accountable and VFX houses need to collect up front.

Ideally.
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Old 04 April 2013   #49
Originally Posted by CGIPadawan: ............Ideally.


That's just it. Ideally.
 
Old 04 April 2013   #50
Originally Posted by CGIPadawan: I think these "poor practices" didn't directly cause R&H's failure. But they definitely presented themselves as vulnerabilities - or as I earlier stated: "Single Points of Failure".

Plugging these or correcting them helps to stabilize the industry.... People can say all they want about how this business is different and there are only 6 clients...

All I'm saying is "It can't go on like that". And I'm also not a fan of "participating in Gross". Clients have to be made accountable and VFX houses need to collect up front.

Ideally.


Drop the word "ideally", and I would agree word-for-word.

Yeah, keep defending the practices (or lack thereof) and watch more go under. Seems insane to me.
 
Old 04 April 2013   #51
I just put in "ideally" as a softener since I can understand that people within the industry itself experience this phenomenon where things are "hard to fix". I don't agree that it can't be fixed, but I can sympathize with their positions.

I work in Manufacturing. And so many things like the R&H issue of being unpaid for delays are already sorted. Yet there are still 1,000 things that you know still need fixing but it's easy to fall back and say you can't because "your industry just doesn't go like that".

The only thing I tell myself on days like that is: "You can only eat an elephant one bite at a time."

Many days it will feel like you can't even fix the quality of catering.... never mind trying to get Clients unaccustomed to Delay Penalties to suddenly accept them. So I understand what people are saying about 6 Clients, no voice, nobody will help, etc.

We struggle in this day job, day by day, to make the small changes to improve these things.
There's a good chance I'll leave the day job before we get to the Nirvana we are targeting. But that's not a reason to quit.

I would say that something like the R&H vulnerability should be priority one, and it would be wrong for other VFX houses to think: "It can't happen to me".

ILM is the exception, because they are now part of the "Bank of Disney".

But see, now they have a new kind of vulnerability... the kind where a Disney executive decision can sink STAR WARS 1313 and the LucasArts game development business.

It's that old game played in ANY industry. If you can't control your business, someone else will.
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Old 04 April 2013   #52
Well the issue now is on the mainstream media:

The Print edition of EW has a fantastic article on the VFX crisis
http://insidemovies.ew.com/2013/04/.../#disqus_thread
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Old 04 April 2013   #53
Originally Posted by RobertoOrtiz: Well the issue now is on the mainstream media:

The Print edition of EW has a fantastic article on the VFX crisis
http://insidemovies.ew.com/2013/04/.../#disqus_thread


From the link:
Quote: Peter Jackson, a digital effects pioneer who co-founded the F/X company Weta Digital, says studios are taking advantage of an oversupply of F/X houses to drive down prices.

As well they should.
For whatever goods or services we desire, we all shop around and come to whichever decision that best suits our needs.

And it's up to the vendow to convince them why they should be the one.
It bthers me when It seems to me that people saying that studios are doing a bad thing.
Quote:
“Competition between VFX houses, which the studios obviously use to their advantage, has resulted in VFX houses operating on tiny profit margins,” Jackson says. “And when we talk ‘profit,’ it’s not about the owners buying a Porsche at the end of a big movie — it’s about having a nest egg to ride out the slow periods.”


And I just don't see this as the fault of the studios. I decide whch of the many mechanics in town fix my car. I agree to their terms. If they choose to not bill me, then I'm not gonna force money down their throat. Inversely, if I don't want to pay them they legally come after me.
And that is up to the VFX places to pursue.

Quote: Even after the collapse of Digital Domain and Rhythm & Hues, Jackson doesn’t believe that studios truly understand the need for F/X companies to charge sustainable prices. “Studios have to answer to their shareholders and will always try to get the cheapest possible work,” he says. “If anything, it’s a wake-up call to the F/X companies to address the weakness in our industry.”


And there it is right there- which is what a few of us have been saying all along.
It's a 30+ year old industry and they should have the charging / billing issues worked out long ago... and maybe the problem was that there has often been a Lucas in the background making up the financial difference.

It shouldn't be up to the studio to understand why vendoes charge- it's for them to pay, and it doesn't sound like the vendor was making them pay.
 
Old 04 April 2013   #54
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