Rhythm & Hues- Master Thread:(At Least Four Buyers Reportedly Interested)

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  02 February 2013
They do it cause they can...

Honestly why do they care when there are enough people willing to fill the shoes of those companies that go under, its not like what most of these vfx studio's are doing is so unique, complex and requires such immense amounts of infrastructure that they can't be easily replaced..

The movie studio's are doing what they feel is best for their bottom line which is reducing the production costs in area's where there is very little value add..

When was the last time any member of the public went to see a movie because "xyz" studio did the effects? The vfx company that did the work isn't what sells their product its the actors and directors reputation which draws the crowds which in turn is why they are paid so much...

Maybe back in the day having your vfx done by ILM was a draw card but now days since the process of creating quality effects has become so much easier it's much more difficult for studio to have build that kind of allure...
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  02 February 2013
Originally Posted by Kabab:
The movie studio's are doing what they feel is best for their bottom line which is reducing the production costs in area's where there is very little value add..

When was the last time any member of the public went to see a movie because "xyz" studio did the effects? The vfx company that did the work isn't what sells their product its the actors and directors reputation which draws the crowds which in turn is why they are paid so much...


The effects house name might not count for much, but reviews and word of mouth concerning the quality of effects can certainly have a huge effect on box office results.
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Last edited by Meloncov : 02 February 2013 at 05:56 AM.
 
  02 February 2013
Originally Posted by Meloncov: The effect's house name might not count for much, but reviews and word of mouth concerning the quality of effects can certainly have a huge effect on box office results.
Of course....

But here is the kicker how many vfx are doing things no one else can? Creating high quality vfx isn't as complex as it used to be so naturally more and more studio's can offer it..

Just look at the quality of the effects you see in your average TV shows now days some of these are far better then the effects from block busters movies 10 years ago...
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  02 February 2013
Originally Posted by Kabab: Of course....

But here is the kicker how many vfx are doing things no one else can? Creating high quality vfx isn't as complex as it used to be so naturally more and more studio's can offer it..

Just look at the quality of the effects you see in your average TV shows now days some of these are far better then the effects from block busters movies 10 years ago...


Depends on the sort of effect; plenty of places can do flawless set extensions, but I don't think I've seen any particularly good creatures that didn't come from one of maybe ten studios.
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  02 February 2013
Originally Posted by Kabab: They do it cause they can...

Honestly why do they care when there are enough people willing to fill the shoes of those companies that go under, its not like what most of these vfx studio's are doing is so unique, complex and requires such immense amounts of infrastructure that they can't be easily replaced..

The movie studio's are doing what they feel is best for their bottom line which is reducing the production costs in area's where there is very little value add..

When was the last time any member of the public went to see a movie because "xyz" studio did the effects? The vfx company that did the work isn't what sells their product its the actors and directors reputation which draws the crowds which in turn is why they are paid so much...

Maybe back in the day having your vfx done by ILM was a draw card but now days since the process of creating quality effects has become so much easier it's much more difficult for studio to have build that kind of allure...


I think you're severely underestimating the amount of people, talent and resources required to produce top quality visual effects for a 2000+ shot feature film. The work being done by ILM, Weta, DD, R&H, SPI, etc can NOT be easily reproduced anywhere. If it could it would have been done already... in a heart beat. The fact is there are only a handful of VFX studios that could handle the work load in a film like "The Hobbit" or "The Avengers". Often the work load is too much for even one of those major VFX houses and it needs to be split up between several studios.

And furthermore, 49 of the top 50 grossing films of all time are what most people would consider heavy VFX blockbusters. The directors are varied, the actors are varied, but there is one constant that links them all together. The VFX were all done by that same handful of major VFX houses that you say can be replaced so easily.
 
  02 February 2013
If it's so specialized and hard to do and only 3-4 studio's are capable why don't they go on strike till they get better deals?

Lots of other industries to this to get better deals..
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  02 February 2013
Originally Posted by Kabab: If it's so specialized and hard to do and only 3-4 studio's are capable why don't they go on strike till they get better deals?

Lots of other industries to this to get better deals..


Because everyone's too scared to be the first to stand up and suggest it lest they be fired. The first one always gets the arrows. Plus the studios hire and fire so often that by the time there's a critical mass of people to go on strike they're about to be let go anyway.
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  02 February 2013
Originally Posted by mingbling: I think you're severely underestimating the amount of people, talent and resources required to produce top quality visual effects for a 2000+ shot feature film. The work being done by ILM, Weta, DD, R&H, SPI, etc can NOT be easily reproduced anywhere. If it could it would have been done already... in a heart beat. The fact is there are only a handful of VFX studios that could handle the work load in a film like "The Hobbit" or "The Avengers". Often the work load is too much for even one of those major VFX houses and it needs to be split up between several studios.

And furthermore, 49 of the top 50 grossing films of all time are what most people would consider heavy VFX blockbusters. The directors are varied, the actors are varied, but there is one constant that links them all together. The VFX were all done by that same handful of major VFX houses that you say can be replaced so easily.


I'm 100% agree with that , and this element contain the embryon of a solution to me.

It is extremely hard to achieve high end VFX it ask
- huge investment in the best possible talent
- huge investment in the R&D side to be able to face of complexity in an efficient way
- huge investment in hardware
- huge organisation and planning job in the RH side
- huge fiancial strategy to manage all the mess of production

As we are talking about VFX in movies ( i exclude animation studio , and commercial works )
Our problem is quite simple : Majors don't want to pay the price VFX cost, so VFX company don't have any other choice to do more for less with the consequence we all know , (artist and vfx production are both suffering from this) . So i see 2 way to solve the problem

1 - force the majors to pay the true price of what they ask by law. Some sort of international agreement = > This will never happen so i would exclude this solution.

2 - As say previously only a very small number of VFX company can handle such complexity (WETA, ILM , Dneg , SPI , RH , MPC , DD, Tippett ... ).
So i think that the time is come for those big boys to sit around a table like British Gentleman and to find an agreement for a minimum rate to ask for VFX. This is possible it just need someone who has the guts and talent to invite 10 executives to talk around a table.
This scenario just need :
- someone with the guts to federate the big boys by defining respectable war rules to replace the savage rules ... that only profit to the majors, and that deserve them !
- that we touch the bottom of this circle of stupidity ( i think we are pretty close ... )
- that companies realise that they have more interest to find an agreement on a minimum rate , than by playing alone

Thus they will not be as vulnerable to majors pression .

This scenario is definitly not science fiction, and is one true alternative to this mess.
a guys like Dennis Murren who has enough charisma and respect from all the community could be able to organise such union beetween the big boys ! Hope he read CG talk !

Cheers

E

PS : it remind me The exemple of Dutch Painters with the guild of saint luke it is quite interesting http://en.wikipedia.org/wiki/Guild_of_Saint_Luke. If artist suceed 400 years ago its definitly possible now ...
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Last edited by SebKaine : 02 February 2013 at 08:48 AM.
 
  02 February 2013
Originally Posted by JoshBowman: Because everyone's too scared to be the first to stand up and suggest it lest they be fired. The first one always gets the arrows. Plus the studios hire and fire so often that by the time there's a critical mass of people to go on strike they're about to be let go anyway.

Not the workers the studio exec's there is like a dozen or so people who run all these big studio's not that hard to set up a call and lay down some ground rules...

But honestly i still think the film studio's have the power since they can just say piss off and we will do it in-house and setup their own shops again..
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Last edited by Kabab : 02 February 2013 at 09:09 AM.
 
  02 February 2013
Originally Posted by Kabab: Not the workers the studio exec's there is like a dozen or so people who run all these big studio's not that hard to set up a call and lay down some ground rules...

But honestly i still think the film studio's have the power since they can just say piss off and we will do it in-house and setup their own shops again..


I wonder if people can see the similarities in history. Take the middle ages, the peasant's revolution where people had to wok the land for the lord, and the church before they could feed themselves or their family, generally working from dawn to dusk. Lord with restrictive wages policy. How in the industrial revolution, the same things happened, work house's, people closing, low pages, poor working conditions, no family time.

I read on here about the man paying his own airline ticket, accommodation, etc, and then getting poor wages. The general conditions seemingly are the same and I cant help seeing the same situation happening again.

In both cases only when people had 'suffered enough' and decided to take action was something done.

In the first case, that was the black death, followed by people not wanting to work more and more hours, and joining forces to ensure the lords payed, for the first time peasants generally got to eat meat.

In the second case that was Unionization, which today seems a dirty word, but it clearly did improve working conditions, working hours, and enforce fair wages, safe working conditions, clamped down on child labour, and ensured that families had time to be well families.

I only wonder when people have decided they have 'suffered enough' what will be the 'third solution' will be.
 
  02 February 2013
Originally Posted by cojam: .... for the first time peasants generally got to eat meat.


yah, because they were eating lobster most of the time

wiki:
"In North America, the American lobster did not achieve popularity until the mid-19th century, when New Yorkers and Bostonians developed a taste for it, and commercial lobster fisheries only flourished after the development of the lobster smack,[21] a custom-made boat with open holding wells on the deck to keep the lobsters alive during transport.[22] Prior to this time, lobster was considered a mark of poverty or as a food for indentured servants or lower members of society in Maine, Massachusetts and the Canadian Maritimes, and servants specified in employment agreements that they would not eat lobster more than twice per week.[23] American lobster was initially deemed worthy only of being used as fertiliser or fish bait, and it was not until well into the twentieth century that it was viewed as more than a low-priced canned staple food.[24]"
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  02 February 2013
Good to see Prime Focus helping the industry like this...


Prime Focus is on a well-hedged trajectory
SMART TALK: Namit Malhotra, managing director, Prime Focus
Niren Shah / Mumbai February 18, 2008


Last year, post-production major Prime Focus acquired Clear and VTR in the UK, while this year it was Frantic and Post Logic in the US. The company has a track record of acquiring loss making businesses and turning them around, besides adding capabilities to its own kitty as well as gaining a toehold in Hollywood. This month, it tied up with Warner Brothers Motion Picture Imaging to work with the latter, globally. Namit Malhotra, managing director, Prime Focus, gives a sneak peek into what is on his mind for Prime Focus going forward, in a tête-à-tête with Niren Shah.
Edited excerpts:
NS: What is at the core of Prime Focus’ strategy?

NM: Since the business we are in is a techno-creative process, film-makers, producers and entertainment companies seek a level of confidence and comfort. This is difficult to establish using marketing offices worldwide and offshoring work to India. Therefore, we are following a dual pronged strategy– while our focus is to build a certain pipeline to be able to get work across borders and to bring it to India using our cost and technology base, unlike any other typical outsourcing company we are also creating a very credible front-end operation that has its own local repute and presence through acquiring studios abroad. So, for the client it is as good as walking into his studio and saying what he would like to do. We then open our backdoor and get the work done somewhere and plug it into the end product.

Moreover, our business is project-centric. None of our projects run for perpetuity. Therefore, our credibility to get just the first project is not enough. We need to be on our toes to keep projects flowing in, in order to efficiently utilise the infrastructure we have built so far. This is where acquiring studios abroad adds another strategic dimension to our business. While we have the capacity and technological expertise to carry out special effects and post-production projects, we do not have the experience to cater to the Hollywood. The studios that we acquire bring in this repertory of experience in the form of people who have worked with film-makers in the developed markets. Our Indian operations will be able to learn the processes and skills required to cater to global film-makers from the teams added to Prime Focus through these acquisitions.
NS: Now that Prime Focus has gained that critical mass, what next?

NM: The first level in our strategy was to first create a position in the global marketplace for Prime Focus, which we have been able to achieve with these acquisitions, in terms of geographical spread, scale, quality, financial strength as well as diverse skill sets. The next level would be to utilise this position to the fullest, in order to bring in more work to India. So far, we have only built the infrastructure to be able to cater to various client needs. For a person who has never been to London, New York, or vice versa, in case of the companies that we have acquired, it is difficult to recognise what scale and opportunities could be exploited through this business model. So, it is nice to say that we have facilities all over the world. The next challenge lies in being able to put these blocks together and make them run as one global entity. It could be a challenge because an integration of skills and services at this scale has not been done before in this domain, and Prime Focus is entering an uncharted territory.

NS: What time frame do you put to achieving all this?

NM: Our target for FY08 was to equip ourselves with a global infrastructure, which we have achieved. But before we finished acquiring the studio in the US, we had already started mulling over the issues of integrating VTR with Prime Focus. In December, when we finished our US acquisition, we had all our senior creative staff from the group assembled in the US for a week to discuss the internal strategy of how we are going to integrate everything. The process of integration is thus, concurrent to that of acquisitions. Now it is all about starting pitching for projects and working on them together, which we are already doing. In this ongoing process, we cannot afford to lose any time.

NS: Prime Focus’ UK and US acquisitions were of companies which were loss making and turned around later. Is turnaround situation a criterion when you look out for acquiring companies?

NM: Not necessarily. The strategic fit is more critical to us. We need to find a company which could add value to Prime Focus. We have retained the management of these companies, and given them the core direction in line with the group's focus. Therefore, it is the synergy in carrying out operations together which is beneficial, than the turnaround situation of the target company. Besides, specific skill sets and the target company’s positioning in the client markets is also important when we scout for acquisitions. For instance, Clear brought in a creative team, VTR specialises in digital visual effects while Frantic Films entitles Prime Focus with access to research and development of visual effects software solutions.

NS: How did you arrive at the valuation of these companies, since they did not have a profitable track record, and essentially, you had to value only the people?

NM: As part of our acquisitions, we have also acquired the real estate and facilities of the target companies. The value attributed to the infrastructure, technology, hardware and tangible assets would be around 70-75 per cent of our consideration. The rest could be attributed to the goodwill, and the people.

NS: In India, Prime Focus is among the largest post-production players. What kind of positioning does it look forward to, in the US?

NM: At this stage, we are just trying to set our foot into the international markets. Eyeing even a fraction of that market would be far-fetched right now. Prime Focus is just starting with the base of what it has and organically building upon it. Now, that organic increase itself is substantial enough for us to get to the next level of our strategy. While we have big ambitions and we have grown rapidly in the past, when it comes to doing business, we are still conservative. We are trying to build a business out of a logical, progressive growth path rather than cashing in on a particular boom or a trend. Therefore, the implementation of our strategy will always be in line with the organic evolution of our marketplace. So, there may not be sudden spikes in our business, but an incremental growth. This too, is a big advance in terms of profitability, because we are in a fixed cost business, where our cost increases are marginal.

As a result, the jump in our profitability will be aggressive, even though the increase in revenue will be modest. Taking this into account, a 10-15 per cent y-o-y revenue growth in the international markets is not a big deal, which puts Prime Focus into a well-hedged growth trajectory, which could be achieved in the worst of the scenarios. But owing to our business model centred on outsourcing on a large scale, even this much growth can add a fair number to our bottom line, going forward.


(project-syndicate.org/Is Growth Incomplete without Social Progress? )
 
  02 February 2013
Originally Posted by DePaint: CG TOOLS NEED TO BECOME A LOT MORE EFFICIENT TO COPE WITH THE CHANGING NATURE OF THE BUSINESS...


I guess you weren't around the industry 10 years ago...
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  02 February 2013
Originally Posted by Darrolm: Randomly seeing dogs as we walked through the halls was rather odd at first.


I guess I'd actually start to miss them after a while...
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  02 February 2013
Originally Posted by SebKaine: So i think that the time is come for those big boys to sit around a table like British Gentleman and to find an agreement for a minimum rate to ask for VFX. This is possible it just need someone who has the guts and talent to invite 10 executives to talk around a table.


http://en.wikipedia.org/wiki/Cartel
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