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Old 02-08-2013, 10:22 PM   #1
olliemethod
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Why is the VFX business failing? ARTICLE

Didn't see this anywhere else. Interesting article.

http://provideocoalition.com/mchris...-for-scott-ross
 
Old 02-09-2013, 05:11 PM   #2
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I agree with Scott pretty much on all of what he said. As far as international subsidies that lead to various countries poaching American studio business from America, well since that's already apparently illegal the international laws should be enforced to stop it from continuing to happen. Once that happens then you can unionize VFX workers and start setting standards for processes, pay, hours, education, training etc. I hadn't really considered the overall notion of the small pool of clients supporting a huge worker base to generate billions of dollars. It's quite obvious and striking, once you consider that small client list, how economic slow downs disproportionally effects this industry more than other industries with hundreds if not thousands of paying clients.

Getting American studio work done in American post-facilities is the first best step. Before the hardcore outsourcing started the low cost of entry in software started to allow for the spread of work across the states into lower cost of living per capita states and counties and it expanded the client list pie, but we never really got to see that movement grow and develop long enough to see the economic benefits of long term success across the country.

Last edited by PhilipeaNguyen : 02-09-2013 at 08:18 PM.
 
Old 02-09-2013, 09:37 PM   #3
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Here we go again... Yes, underbidding is bad, and subsidies do distort the market, but there are subsidies in the US already, ask the DD guys in Florida or other facilities relocating to Albuquerque etc... Should South Californians be the only ones in the world legitimately entitled to work in the VFX industry?

On top of which, being based in LA doesn't make those studios really American anymore, you know... Or by American, do you mean Indian-owned Dreamworks, or Japan-Owned Sony Pictures/Columbia/Tristar, or Australian-based Fox (newscorp)? Universal was French at some point, Disney and Time Warner are publicly traded and probably have a very international mix of shareholders too (Chinese, Saudi? who knows)...

Most of the VFX heavy movies make three times the money internationnaly at the box office. Harry Potter, James Bond, The Lord of the Rings, Planet of the Apes... British and French stories... Peter Jackson, James Cameron, Ridley Scott, Christopher Nolan, Roland Emmerich : Kiwi, Canadian, British or German directors...

The stories are international, the money is international, the directors are international, the cast and crew are international, the audience is international and there are excellent VFX studios and artists around the world. ... why should the VFX work be done in the US only to begin with? For historical reasons ? Damn, if so, everything should be made in France since Méliès clearly invented VFX tentpoles, and the Lumière brothers Cinema altogether!

So yes, subsidies do make for unfair competition, but subsidies aren't a specifics of non-US countries, US states do that all the time, a lot of work done abroad isn't due to subsidies and unfair work practices (New Zealand, Canada, UK, Germnay, France... aren't sweatshops), and underbidding isn't only due to outsourcing, but also because many more studios can now compete with the big ones since the digital age. It's not that simple. And if there's a bad guy here, it's not the foreign VFX artists.
 
Old 02-10-2013, 09:24 AM   #4
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Philip - you loath subsidies and want to replace it with protectionism? If you want that, become a corn farmer.

EricM - On the contrary, I'd say this is quite simple This is how a market works - we apparently reached peak capacity for VFX work some time ago, and that combined with competitiveness and economy has meant the work to go around has gotten a lot smaller. Consider this a far better paced dotcom bubble bursting.
 
Old 02-10-2013, 03:59 PM   #5
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Quote:
Originally Posted by PhilipeaNguyen
As far as international subsidies that lead to various countries poaching American studio business from America


I think you need to look up the meaning of the word poach, because film studios can choose who they award work to; none of those evil foreign studios are forcing them to do anything.

By the way, where were your shoes, clothes, computer, mobile phone and other accessories manufactured? I wonder.
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Old 02-10-2013, 05:21 PM   #6
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If you can't compete without a government enforced monopoly then you've got no business competing in the first place.
 
Old 02-10-2013, 11:26 PM   #7
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Unhappy I don't think it's always a choice...

Quote:
Originally Posted by leigh
...film studios can choose who they award work to; none of those evil foreign studios are forcing them to do anything.


You are correct, but sometimes a studio may not have a choice. Framestore may lay off 100+ employees in the UK and hire 200 employees in Montreal. If this happens, I'll blame the subsidy race to the bottom, not Framestore.
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Old 02-10-2013, 11:35 PM   #8
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Quote:
Originally Posted by Celshader
You are correct, but sometimes a studio may not have a choice. Framestore may lay off 100+ employees in the UK and hire 200 employees in Montreal. If this happens, I'll blame the subsidy race to the bottom, not Framestore.


I'm painfully aware of the Framestore situation, having worked there a couple of times (having most recently finished a gig there several months back) and having had good friends laid off there last week.

But when I talked about studios having a choice I meant the film production studios (Universal, New Line, etc) not the VFX vendors.
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Old 02-11-2013, 12:20 AM   #9
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Quote:
Originally Posted by EricM
Here we go again... Yes, underbidding is bad, and subsidies do distort the market, but there are subsidies in the US already, ask the DD guys in Florida or other facilities relocating to Albuquerque etc... Should South Californians be the only ones in the world legitimately entitled to work in the VFX industry?

On top of which, being based in LA doesn't make those studios really American anymore, you know... Or by American, do you mean Indian-owned Dreamworks, or Japan-Owned Sony Pictures/Columbia/Tristar, or Australian-based Fox (newscorp)? Universal was French at some point, Disney and Time Warner are publicly traded and probably have a very international mix of shareholders too (Chinese, Saudi? who knows)...

Most of the VFX heavy movies make three times the money internationnaly at the box office. Harry Potter, James Bond, The Lord of the Rings, Planet of the Apes... British and French stories... Peter Jackson, James Cameron, Ridley Scott, Christopher Nolan, Roland Emmerich : Kiwi, Canadian, British or German directors...

The stories are international, the money is international, the directors are international, the cast and crew are international, the audience is international and there are excellent VFX studios and artists around the world. ... why should the VFX work be done in the US only to begin with? For historical reasons ? Damn, if so, everything should be made in France since Méliès clearly invented VFX tentpoles, and the Lumière brothers Cinema altogether!

So yes, subsidies do make for unfair competition, but subsidies aren't a specifics of non-US countries, US states do that all the time, a lot of work done abroad isn't due to subsidies and unfair work practices (New Zealand, Canada, UK, Germnay, France... aren't sweatshops), and underbidding isn't only due to outsourcing, but also because many more studios can now compete with the big ones since the digital age. It's not that simple. And if there's a bad guy here, it's not the foreign VFX artists.


Discussions about subsidies seem to always devolve into a Los Angeles vs. the world argument with hints of anti-Americanism thrown in, but that's a fallacy. It's only perceived that way because of the structure of the subsidies that were offered over the last decade or so. Right now it's transitioning into a Vancouver and London vs. Toronto and Montreal battle and we're beginning to see the effects on work in those areas. Tomorrow it'll be some other location willing to buy jobs with taxpayer money in order to look good to their constituents. It's unsustainable.

Sure it's convenient and nice to see a bunch of big budgets films being done in your back yard, but it should be abundantly clear by now that the second that your local government pulls back on it's film subsidy program or some other government decides to offer even better subsidies those jobs dry up overnight. If the jobs being "created" are only there because of taxpayer gifts and for only as long as the gifts keep coming (and increasing) then what is the point? Nothing is being built. No sustainable industry is being created. It's just fool's gold.

The reason why VFX is based in California and Los Angeles in particular is because all the major studios that fund these movies are based there. It is correct to believe that if not for international subsidies most (but certainly not all) VFX work would be pulled back into the Los Angeles area. But Weta would still exist, as would Dneg, as would many other top-notch VFX studios around the world that can offer quality and capacity equal to or exceeding what could be accomplished in a Los Angeles based studio at a similar or cheaper price. This is the most economically efficient form of competition and is how it should be.

What we have now is a system where work is forced into other areas, artists are forced to move, and VFX houses forced to construct satellite facilities for the sole purpose of allowing the big US studios to rake in the maximum amount of government funds. The industry as it exists today is not based on price, quality, efficiency, capacity, proprietary technology, etc... it's based on leveraging governments and business to provide the maximum amount of rebates. In a way, the US studios are using the VFX industry and international tax payers to help fund their movies and giving them no share of the profits.

This will continue as long as people and governments are willing to sacrifice anything for the chance to be associated with sexy and glamorous Hollywood. Right now Ontario and Quebec are willing to go deep into debt to court the glitz and glitter. Vancouver is peering over the cliff wondering if they should jump also. I'm sure another local government will beat them both in the near future, probably in the US even. The studios win and more VFX studios will go out of business for reasons that have noting to do with competition or real market forces. They'll have been sold out for a couple photos of a PM with a celebrity and a souvenir movie prop.
 
Old 02-11-2013, 02:14 AM   #10
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Red face Just the opinion of a humble student

Seems to me like VFX houses need to start cutting out the middle man and making their own movies - at least that way they have access to the larger piece of the pie which is only seen if and when a movie makes large profits... fuel VFX was in dire strait after completing Prometheus who make $403,354,469 - maybe had fuel VFX been actually making the film itself as well as the VFX on it, it would have fared much better. Is this even realistic? - im speaking purely from a students point of view and all this talk about VFX closing up is kinda scary from where im sittin.
 
Old 02-11-2013, 03:24 AM   #11
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Red face Gotcha...

Quote:
Originally Posted by leigh
But when I talked about studios having a choice I meant the film production studios (Universal, New Line, etc) not the VFX vendors.


Ah, gotcha.

Quote:
Originally Posted by AtahanZugul
...im speaking purely from a students point of view and all this talk about VFX closing up is kinda scary from where im sittin.


I've worked in VFX since 1999. Here's my take on the industry right now:

First, please consider any other industry that will treat you better (video games, visualization, illustration, previz, apps, teaching, Local 839 jobs in Los Angeles).

If you still want to work for VFX studios, remember that they do not own what they create. Weta does not get royalties from The Hobbit, and Digital Domain doesn't get a dime off of sales of Tron Legacy. When projects wrap, idle shops do not have the money to keep their artists, so artists get let go when a shop runs out of work. You will work from project to project and from studio to studio. Towards that end...

  • Keep your cost of living as low as possible.
  • Consider renting instead of owning a home.
  • Keep at least one months' living expenses in the bank.
  • Try not to carry any debt and/or pay down your debts as fast as you can.
  • If/when you're debt-free, keep as much as you can in the bank to keep you going between projects.
  • One day, you will get old. Think about how you will live when you are old.

I've been lucky to work within 25 miles from Burbank for 14 years, but not all of the VFX artists I know have had the same experience. I know artists who bounce from city to city around the world for each new project. I know other artists who have left this industry to work as teachers, software developers, video game artists and real estate agents. They got sick of where the VFX industry was headed, so they left.
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Old 02-11-2013, 08:09 AM   #12
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Quote:
Originally Posted by PhilipeaNguyen
lead to various countries poaching American studio business from America


......sigh......You did not think that statement through did you? No one is poaching anything, it gets handed to to them by free choice.

On topic: Underbidding might indeed be a problem, might not. However not rebidding when the client changes his mind for the 3.458.573th time IS a problem.

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Old 02-11-2013, 07:54 PM   #13
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We and any many other industries are simply the fabric industry of the 21st century.
It's business, it's globalization, it's the nature of the free market. Everything else would be a distortion of it unless it's not any sort of protectionism. As sad as it is for all of us :-/
 
Old 02-11-2013, 07:56 PM   #14
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I'm not wanting to be argumentative, but this is what I found on the word poaching:
"to encroach upon especially for the purpose of taking something"


I still think this is an accurate term to use for this scenario. Countries subsidize expansion of an alien corporation specifically to lure it away from wherever it is and they are aggressive about it. I don't understand the point about companies not being American. International companies buy into American business by investing heavily in or buying these companies, but that doesn't change that they are American companies.
 
Old 02-11-2013, 08:39 PM   #15
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I'm shocked when I don't see news of a studio closing on a day-to-day basis. That, to me, sums up the industry. It isn't 'failing' - it has failed.
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