Legal Recommendations On VFX Subsidies

This may be one of my most important posts. For years I’ve written about the harm caused by subsidies for visual effects and how many good companies have been put out of business and how many good people in the industry have been forced into a cycle of displacement.

At some point between the start of this blog and now, I contacted government officials and various law firms about what options are available to try to help fix the problems the VFX industry faces because of market-distorting subsidies. One law firm stood out and in December I asked many readers to donate funding for a feasibility study in which the firm would recommend a path to mitigate the effect of these subsidies in the visual effects industry.

First I want to thank those of you who patiently and passionately supported this study. Your support is crucial. I also want to thank those who came forward to speak with the lawyers so they could better understand the issues we face. Finally, I want to thank and introduce you all to Washington D.C. based Picard Kentz & Rowe (PKR).

Their team of international trade law experts Andrew W. KentzDavid A. YocisKevin M. O’Connor, and Nathaniel M. Rickard have worked on this study over the last few months. I’ll have another post on why I chose them, but for now let’s get to their recommendations which are in the link below:

http://tinyurl.com/VFXSubsidiesStudy

I originally approached law firms with the intention of challenging subsidies on the basis that they are banned by the World Trade Organization. The study recommends against this route for the same reasons the 2007 effort failed. While these subsidies probably do violate international trade agreements, it is the sole discretion of the US Trade Representative to pursue a WTO case. To this day, we still do not know the exact reason for the rejection of the 2007 effort even though that petition was solid. Many suspect it was because of backdoor lobbying by the US studios who benefit from these subsidies.

Instead of going through the WTO and trying to get each country to stop subsidizing the US studio productions, many of you have mentioned the possibility of some mechanism that would coerce producers to repay the amount of subsidies they receive to offset the market distorting effect. UK-based VFX artist David Stripinis mentioned this in a post.

While his premise is correct, his conclusion that such a mechanism would require a law passed by Congress is incorrect. The law, which is called the countervailing duty (CVD) law, already exists, and PKR specializes in CVD issues. While using the CVD law would have its challenges, it is important to note that the application of CVDs are mandatory, meaning if the conditions are met, the US government cannot just decline to apply it.

In 2001, the Film & Television Action Committee tried this route but withdrew their petition after they failed to get film industry support. However, they admit that the counsel used for this process didn’t specialize in CVD laws. The application of countervailing duties are very technical and our team at PKR have specialized in applying CVDs and similar trade remedies for several industries, including lumber and shrimping.

The study goes into detail on what we would need to do technically to apply the CVD law, and it also goes through some of the challenges we would face and some precedents that would support our effort. The main takeaway from its findings is that there are some novel and challenging issues to overcome – but that there is a path forward. The strategy isn’t guaranteed to succeed, and even if successful might not completely capture all possible subsidies. But it does present a tangible path, something solid we can consider and perhaps organize towards.

The way countervailing duties usually work is that US Customs collects cash deposits on imported merchandise that has been deemed subsidized and, thus, subject to a CVD order, when it enters the United States. Then, once a year, the Commerce Department calculates how much subsidy was actually given and sets the final amount to be repaid as an import duty. Obviously, our biggest challenge is that subsidized visual effects imports for feature films are transmitted digitally and essentially bypass traditional methods used by US Customs to assess import duties.

Nonetheless, the study concludes that while it has yet to be tested, the CVD law should apply even to digital imports. Even if producers bypass customs by digital methods such as the internet or cloud computing, the CVD law would set up a mechanism where duties can be assessed retrospectively on an annual basis. So a US producer for a film who chooses Vancouver as the location to execute VFX work for a significant rebate could find itself at risk of having to pay the whole rebate back to the U.S. government a year later after an annual review by Commerce. That alone could be a powerful deterrent for locating VFX production somewhere based simply off of a rebate.

The study goes into other details as to what the next steps should be. For example a formal organization should be formed to give counsel direction on how to proceed, and a petition would need to be filed with the Department of Commerce to initiate a CVD investigation.

There will be many opinions about today’s findings and many questions too. I’ll try my best to answer them and I am in the process of scheduling interviews and Q&A sessions with the law firm and VFX professionals. I think one of the obvious issues that people will have questions about is state-side subsidies given that the CVD law does not apply to interstate commerce. We’re against subsidies for VFX in the US also but, frankly, most state-side subsidies are for physical productions, not VFX.

The only significant state subsidies for VFX are for entities that no longer exist: Digital Domain Florida and Sony Pictures Imageworks New Mexico have all been shut down. That’s not to say that if the CVD route is successful that studios will not try to push work to states that will subsidize VFX work. I will let you know that I am also prepared for that situation and have a plan in the works.

In the meantime, email me or comment below on your thoughts. We’ll assess what the next stage will be.

Soldier On.

Update 7/11/13 8:00 am update:

The Wrap weighs in on today’s event: Salvation for VFX?: U.S. Could Tax Foreign Film Subsidies, Study Finds

Jeff Heusser will be conducting an interview with the legal team behind today’s study:

 

 

About these ads

150 Responses to Legal Recommendations On VFX Subsidies

  1. J in BK says:

    I was hoping you’d drop the pseudonym.

  2. Wonder says:

    How is it going to work with the free trade agreement between the US and Europe for instance?
    From what I understand the idea is the tax the import, which might be obsolete if the US and Europe gets a free trade agreement. I think Australia and the US already have this in place. I am not sure if the film production will fall under the FTA. But I thought it was worth raising the question.

    • VFX Soldier says:

      The US has free trade agreements with Canada and countervailing duties continue to exist. If European countries continue to have injurious subsidies then duties that offset that injury should continue.

      France has mandated that in order for free trade discussions to even begin, there must be no discussion on film subsidies.

  3. […] of a new report by the D.C. law firm Picard, Kentz & Rowe that the visual-effect industry blog VFX Soldier commissioned with monies raised on social networking […]

  4. Anon says:

    This sounds somewhat reasonable. But the lawlese would need to be very very clear about “digital merchandise”. If it doesn’t, and it would fit any digital data crossing borders, you can quickly have an internet shitstorm against VFX workers.

  5. Big $exy says:

    No, but DVDS/Bluerays and the actual film stock/delivery are physical objects.

    The films are shown in theaters from a source. That source is either film or a digital version of the film that is stored on *something*, and that *something* is the physical final product.

    • Anon says:

      But what is STORED in that “something” does not have a physical form, it’s just information that can be copied into any physical form anywhere in the world at any time.

      • Big $exy says:

        The fact remains that films cannot be streamed from LA to 2000 theaters all over the country and even more all over the world. Films are delivered on a physical medium to theaters, as they always have been for decades. BluRays/DVDs are also physical mediums. And in the end, none of this might matter if the CVD will apply to digital products.

      • VFX Soldier says:

        I think many people are commenting without reading our legal teams’ findings. Please look at Page 9 going forward.

  6. Cold Water says:

    VFX Soldier, have you considered contacting the Los Angeles mayor’s office about this study, given the recent statements of the new mayor?

    • VFX Soldier says:

      Not really. What’s nice about the CVD route is we don’t have to rely on politicians.

      • Studio_Spotter says:

        *we don’t have to rely on politicians*
        I just wanted to quote that for fear that the weight of this benefit may be overlooked.

      • Andreas Jablonka says:

        I agree we don’t need to involve the, given that he has shown interest in the pity of of runaway productions it could be good to
        A) give him a tool to fig it
        B) have a supporter of our cause trying to establish the cvd.
        It’s worth a shot I think.

  7. Devin Fairbairn says:

    So what we really need is a strong push for unity and to have a majority of our domestic industry collaborate towards this common goal.

    I haven’t heard much of anything from the trade association talks, and that seems to be the number 1 step. Scott, any feasibility of an official organization?

    • vfxmafia says:

      Dev,

      The main reason (if im not mistaken). To bring a complaint to the WTO you have to be Company or Country. We would effectively have to have a VFX company complain about the subsidy…..to the WTO…(which is not gonna happen because it would piss off the studios).

      Trade association …you have to have a group of VFX companies…..pretty much all the English VFX companies…and i would bank on the BC companies as well….told Scott (and the movement) to fuck off…..leaving most of the LA companies either bankrupt or collecting Subsidy from VAncouver….

      Hate to say it ..it looks like the owners of the VFX studios are part of the freaking problem….these people will NOT solve labor problems….

      With the CVD option…a group of artists can file a complaint and have it reviewed by the commerce dept…or the NAFTA commission.

      • vfxmafia says:

        I might add….the VFX owners….chip away at our rates…. fire us when ever they want….force us to move so they can make more money….ask us to take wage cuts….they cut our health benifits…..and then lay us off …so they don’t have to keep us staff. By this track record…..VFX owners are no friends of labor.

  8. Look at the big picture says:

    “You have meddled with the primal forces of nature, Mr. Soldier, and I won’t have it! Is that clear? You think you’ve merely stopped a subsidies deal. That is not the case! The Canadians have taken billions of dollars out of this country, and now they must put it back! It is ebb and flow, tidal gravity! It is ecological balance! You are an old blogger who thinks in terms of nations and peoples. There are no nations. There are no peoples. There are no Los Angelenos. There are no Vancouverites. There are no third worlds. There is no West. There is only one holistic system of systems, one vast and immane, interwoven, interacting, multivariate, multinational dominion of dollars. Petro-dollars, electro-dollars, multi-dollars, reichmarks, rins, rubles, pounds, and shekels. It is the international system of currency which determines the totality of life on this planet. That is the natural order of things today. That is the atomic and subatomic and galactic structure of things today! And YOU have meddled with the primal forces of nature, and YOU… WILL… ATONE! Am I getting through to you, Mr. Soldier?”

    Love that scene! Good work Mr. Soldier. ;)

  9. Ymir says:

    Thank you Soildier! You have actually done something for our industry that is smart and thoughtful. I wish you would run for the chair position at the Visual Effects Society and find a replacement for Eric Roth.

  10. […] of a new report by the D.C. law firm Picard, Kentz & Rowe that the visual-effect industry blog VFX Soldier commissioned with monies raised on social networking […]

  11. The VES is registered as charity and therefore cannot represent trade union interests. However, two entities with VFX best interest at heart are stronger than one. Thanks, Soldier.

  12. VFX_Reckoning says:

    This CVD route seems very do-able! I will push for and support this tax with every breath of my being, by mouth, by fist or by sword. I’m excited for us to move forward!

    Thanks for doing all of this, Soldier!

  13. Linc says:

    Ymir,

    As I recall from previous posts, you are an active member of VES. Why don’t you run for the board, and if elected, you can certainly help to bring about those changes you desire as outlined. With regard to Eric Roth, however, it may be more difficult and expensive to replace him as VES recently extended his contract through 2018 which is a longer extension than many studio executives like Bob Iger get.

    Do you know as a VES member what the terms of his contract are through 2018? One would think his salary and benefits would be available for members and non members as well. That information might certainly shed a better perspective on VES and its management future.

    Do members receive an annual report from VES? If so, would not the salary and overhead be detailed? And, if not, one might think any VES member is entitled to know this upon request…don’t you?

    • Linc says:

      Ymir,

      Did not see your post about some one ‘stealing’ your handle regarding the VES and Eric Roth statement, thus, the response.

      So, as long as you are a happy camper with the Eric Roth being the best executive director VES has ever had, then all is good for you and your fellow VES members.

      So, let’s put the focus back on this report.

    • Ymir says:

      First off, *I* am not calling for anyone to be replaced at the VES. Looks like my handle got hijacked. Secondly, I’m not going to have this debate with you again as I believe you are now posting under a new handle as the verbiage and issues raised are too similar to a previous overdone discussion. Third, the topic is VFX Soldier’s work on potential WTO violations in regards to subsidies. Lets stay on topic and not turn this into another attempt to disparage the VES. Make your peace with it.

      • Linc says:

        Exactly, as I have already responded and so stated before this newest statement from you.

        I am more than happy to put my comments against yours anytime to see which are more focused and stated with more courtesy.

        When you do not like a question whether simple or complex…you seem to be very aggressive.

        For the record, including exchanges with you as of late, it would appear that most realize the anger is so high that people do not listen or read so well. In fact, I think you are one of the supporters of ‘getting angry’. Without reviewing your previous posts again, I am almost certain you call for ‘getting angry’.

        The fact is a lot of folks acknowledge the tone is interfering with the dialogue. And often, with sincere effort, the tone is lessened and the courtesy returns.

        Not knowing your handle was compromised, my response was a courteous and honest response to ‘some one’ making that statement about the chair and Eric Roth. The response was suggesting you follow protocol to impact the changes as listed in the post. That’s it.

        Anything else is just pure speculation on your part.

      • Ymir says:

        I would not say aggressive but defensive to the ‘courteous’ saber rattling of a skilled political wordsmith. Addressing speculation on my part, to me, confirms its validity.

      • Linc says:

        Ymir,

        Whatever…did you gloss over the ‘getting angry’ part which is the bulk, heart and soul of this particular dialogue?

        Perhaps, my being a “skilled political wordsmith” made that one point too hard to comprehend and/or acknowledge in any way whatsoever.

        Whatever.

        PS – VFXSoldier, sorry to be a part of this distraction from the report and all of your efforts. It ends now. Your work is what folks should be discussing.

      • Ymir says:

        “Perhaps, my being a “skilled political wordsmith” made that one point too hard to comprehend and/or acknowledge in any way whatsoever.”

        Wow, who sounds aggressive now? Yes, I asked for people to get angry to affect change. Sort of a ‘Network’ angry. Sit tingly meekly by is not going to do any good.

        Yes, let’s stop our petty bickering and get back to the task at hand. Apologies to all.

  14. Ex_RH_employee says:

    I’ve been out of work a couple of months now in LA. Very few jobs left here, especially after R&H closed and now that Digital Domain is wanting to move everything up to Vancouver. I hope this offers some chance of change because I’ve given up on the industry ever getting better.

    • anna says:

      This is a GLOBAL industry. There are jobs in other places in the world you know. Just like any other industry.

      • There are a lot of struggling, out of work artists in Vancouver right now as well. Add to that the fact most Vancouver VFX offices are a fraction the size of their LA counterparts. Shut down Encore Vancouver, that’s 5 jobs (3 artists + prod). Take all of Image Engines work if you like; They are a ghost town right now and have no work at all. Method is ‘ramping down’, and most offerings for work from them are 4-8 week stretches. Prime Focus has been posting jobs for months, but I suspect it’s to inflate HR’s rolodex more than actually offering positions right now.

        So aside from what Everyone at these townhall meetings seem to suggest, Vancouver is pretty dry even with it’s hefty subsidies. You could nuke Vancouver tomorrow and it wouldn’t be enough to support the mountain of out of work VFXers in LA. No-one is listening to Vancouver anyways so it doesn’t matter.

        The conversation I’m interested in seeing is how to fix the bidding model. That’s what is killing companies: Not getting paid for wasted time or never-ending notes. I don’t know how subsidies now seem to have the full blame for R+H’s demise. From where I stood it looked to me like having a full crew of artists twiddling their thumbs for a few months was a likely culprit. Vancouver also marched on Pi-day, and it wasn’t as a favor to LA.

        Interesting times ahead.

      • Scott Squires says:

        Yes, it is a GLOBAL industry but note that global and subsidized is not one and the same thing. There will be work in many places around the world without subsidies.

        ‘I don’t know how subsidies now seem to have the full blame for R+H’s demise.’

        They shouldn’t take the full blame but when there is too much competition and the government is in full control over much of that competition (subsidies) then it’s difficult for any company company to compete. ‘What’s that you say Mr VFX company? You want a kill fee in the contract? How about I snap my fingers and just move it all to another country? How’s that for your kill fee?”

        The fact is subsidies do distort natural evolution and do change and reduce leverage. Things that would naturally be in any contract are now at the whim of the client. And the clients like to avoid as much risk as possible. The studio doesn’t want to make decisions until the last possible moment. And they don’t want penalties if they change their mind or something changes. And they will hold this over the head of any vfx company with the threat of going somewhere else. With too many vfx companies and too many places over big subsidies it’s difficult to get a balanced contract.

        The other thing many people have forgotten that film making has always had it’s ups and downs. More so the vfx industry. It’s either feast or famine. There was a long period of feast in some areas (with subsidies) that people got used to it. That’s why when people complain about being paid too much (yes, there are some who do) I have to point out they’re unlikely to be employed full time for the next 5 – 10 years. More than likely they will be off a few months out of the year. possibly 9 months or longer without work. And that’s one of the reasons why film people are paid a higher amount than people working regular full time jobs. Because the worker is taking risk and the worker will not be employed all the time.

        In regard to Vancouver – the reality is a large portion of the work there is due to subsidies. If BC didn’t have subsidies would there really be as many vfx companies and workers there? There woudl be some but that’s the problem with subsidies. The increase the size and number of both companies in a given area, more than the area woudl have naturally grown to. And when that happens you’re much more likely to suffer a bigger fall than a non-subsidized area in a much quicker factor.

        So is Vancouver low currently simply because we’re in the famine stage or is it because a certain % of the work is now being sent to Montreal? The word I keep hearing is studios want to do go to Montreal because it offers better subsidies. So are subsidies a good thing for everyone all the time?Sadly, no.

      • Honest question: In an environment without subsidies how is the threat of a kill fee negated? There are still plenty of companies in non-subsidized areas willing to overextend themselves to please the studios. I remember the heyday of LA VFX in the late 90′s early 00′s where every man and his dog had a studio. That’s why Vancouver got so hot for film; Vancouver heard entire classes getting hired right out of school, 23 year olds making 6 figures, a $400+/hr rate for a flame artist… Everyone wanted a piece of that. Vancouver was appealing because of the CAD dollar and relative closeness to LA. Subsidies an extra push to encourage the generally low-end ‘surplus’ work to BC. And for a long time everyone seemed fine with it: Vancouver did stuff like “Air Buddies” while LA blew minds with the Matrix.
        Things shifted as Vancouver started getting better at the work. I think that the Watchmen and District 9 were the movies that shifted Vancouver from being a place to do cheap movies cheap, to a place that can do good movies cheap. (Yes, yes, subsidies cheap, not just CAD cheap)

        Then the housing/financial crisis kicked in, movie financing shrunk, jobs went missing, and everyone in LA assumes they all the jobs are now hiding in Vancouver. It doesn’t help when the only person from Vancouver that talked at the last townhall was Dusty (IATSE), and suggested that everything was great up here (Really?!). Some places are slowly picking back up, but its far from great. Job boards are jammed with job-postings but very few actual hiring are happening. (I personally think HR depts are putting together calls lists for when they hopefully get work in.)

        So did all the jobs go to Montreal? I am not so sure about that either. I hear a lot about Montreal, but I’d like to know how many new artists are ACTUALLY sitting in workstations since they upped their subsidies. I’m willing to bet it’s nowhere near as busy as people think it is. The only big studio I’ve heard of moving there recently is Framestore. Are they even fully crewed?

        So where did the jobs go? I think you have hit the nail on the head that we are in the famine part of the cycle. Jobs got lean and everyone is getting fidgety. The phrase “We are only ever 3 meals away from anarchy” seems succinct. I truly suspect there are just less projects on the go due to the financial crisis. I don’t know how to research this fact, its just from speaking to colleagues in all of the major VFX hubs. I think if subsidies were slashed across the board tomorrow and all the international jobs/workers were gone, there would still be a lot of VFX workers in LA out of work.

        TL:DR Yes, subsidies skew the landscape. Everyone knows this. No arguments. People in Vancouver should just be happy to have the pleasure to have worked in film for so long, but now L.A. wants their lawnmower back. Sadly it’s not in as good of shape as they remember it.

        Now for a direct question… I am very interested in your comment “Too much competition” There will always be someone willing to bend over backwards to please the studios, so would one of the purposes of a trade org also be to block new entrants? Or would it be a “To become a VFX company you have to agree to do things our way” sort of thing? I’m curious what is considered a “Fair, even playing field” in this context.

      • Scott Squires says:

        Without subsidies then each company can either thrive or fail based on their own merits. Most industries end up with a few very large players and then a certain amount of smaller shops that specialize. That’s why there’s 6 movie studios. That’s why there are limited number of airlines, banks, etc. Ideally vfx companies would either merge or adjust so there would equilibrium. Enough leverage to make a profit without fighting off hundreds of startups.

        One of the things people have got to start thinking, including the current vfx houses, is how do you operate as a real business? Everybody and their brother thinks the next great idea is to start their own vfx company.

        A trade association (or a code of conduct if there is no trade association) would mean that larger players pay into the trade assoc. and that studios would tend to go with the companies that offered less risk. Would you rather buy a watch from a guy on street corner or a real store? One of the code of conduit issues would be companies can’t intentionally underbid their own estimates and can not ask to see the bids of other bidders and adjust. The Kansas tree trimmers have this clause for heavens sake. And with millions of dollars we can’t have that?

      • Alex says:

        LA didn’t blow anyone’s mind with the Matrix. Massachusetts and Sydney did.

      • scathie says:

        “That’s why there are limited number of airlines, banks, etc. ”

        You realize that airlines and banks are hugely subsidized, don’t you?

      • Big $exy says:

        I don’t really give two shits about the industry outside of the US considering most of you work in government subsidized markets and work for peanuts (nz and aus being two exceptions to the latter).

      • Forgive me Scott, but I still fail to see how getting rid of subsidies fixes the ‘kill fee’ option/fixed bids. As one of the big 6 I might buy a watch on the street corner IF that guy had a senior team of proven ex-Rolex employees under his banner. And that’s what happens in VFX all the time.

        As a studio I would certainly entertain offers from smaller companies that operated on the terrible fixed bid system. The only difference sans-subsidies is that you might be picking from a more local pool. A pool that is soon to be swimming with hungry students and displaced senior internationals. I predict wage decreases across the board.

        People think subsidies are here to stay, I think the opposite. I predict within the next 2 BC election cycles there will be a retraction of subsidies. (I’d love to see a shift to Canada with the CRTC/Canadian content rules. Not gonna happen though) California’s countervailing duties will go through. That is a fact. The unknown for me is how the studios will react. I’d love to see one of the 6 move headquarters out of California, or subsidized regions all taking a shot at locally producing content. Again, that’s not going to happen. (At least until physical theaters are a thing of the past)

        Lets talk things in a unsubsidized world:

        Everyone on this blog and twitter talks about how they want things to be fair. Underbidding a project is “fair”. It’s pure competition. And if a company goes under? That’s the nature of business. The workers just move on to the next vfx house and there is no loss of options for studios needing vfx work: It’s all the same workers under a different banner. When workers have paychecks go missing, the studio doesn’t care – They have no obligation to the workers whatsoever. Its not like the workers aren’t going to come crawling back for more. Studios are in the perfect position. Sure they will miss the good ol’ days of subsidies, but it doesn’t change how they award jobs to VFX houses and how they handle bids.

        The post Pi-day conversation has been manipulated so much that people are convinced subsidies are the sole cause of all woes except healthcare (USA) and unpaid OT. Subsidies simply move jobs. The fixed-bid business model is what is killing studios and not paying workers. I think in-house VFX would be less painful for the workers. (It’s also an easier track to getting VFX unionized. But that’s another conversation.)

        So here we are: Times are lean globally so everyone is pointing fingers. I still think the best written post on the situation was by Mr Dennis Hoffman shortly after Pi Day. It is still very much on the mark:

        https://www.facebook.com/VfxSolidarityIntl/posts/356388367803068

      • Scott Squires says:

        When a company in a less subsidized area is competing against a company in a subsidized area then you have to underbid or you have to compromise in some way. And that compromise in many cases is in the contract. ‘We’ll pay the extra money but we don’t want to be responsible for a penalty if we pull the work.’ Extra in this case means more than the subsidized company would cost them, even if it’s still at a loss.

        Removing subsidies will not solve all the problems but at least it will be up to the companies to sort out best they can be instead of the politicians jerking the chains. Subsidies have removed natural evolution of companies. The subsidies increased the number of vfx companies and increased the number of vfx workers more than be supported. This has put everyone in jeopardy. When subsidies are eliminated you will likely see more efficient companies growing and less efficient or poorly run companies going out of business.

        If there were a Trade Association or a Code of Conduct for the companies then a non-underbid clause could be standard. If all companies took the high road (or at least the majors) then you could avoid the race to the bottom with companies. Despite what companies may think there is a real advantage to them organizing. Changing the business model will require all key companies working together. If a single company tries to do a time and materials bid then they will be likely fighting a losing battle. We should try to stop companies underbidding and doom themselves and the industry.

        And yes, one of the cleanest solutions would be for studios to do their own vfx. Setup popup shops to handle a certain % of the work themselves. This is how it used to be done and now that the technology and pipelines are available it can happen again. But as long as subsidies offer much higher cost offsets and as long as vfx companies continue to take on all risks on a project, the studios have no incentive to to do any of the work themselves.

      • Well, it’s going to be interesting to see how it all turns out. I feel that there will still be harsh under-bidding between companies even once subsidies are out of the picture and with a trade org in place. I’m curious what other industries that have as large grey areas in their costs as VFX and how competition works for them.

        If all of the majors were to come together and say “No more fixed bids” that would be amazing. If the VFX studios wanted to protect themselves during the (Bidding method) transition period from workers running to the competition, offering pensions (and other benefits) would certainly help. Most people I know that get some form of benefits have stayed with their vfx houses for a long time. It would be nice to solve things without the often ‘necessary evil’ of a union, but it would be a good tool for vfx houses to anchor workers.

  15. urizen says:

    “We’ve analyzed their attack, sir, and there is a danger.”

    Thank you Soldier and all who contributed!

  16. Dave Rand says:

    I was once asked by the BC film commissioner on the air in Canada that if California had been more “competitive” (joined in the subsidy fray with more funding) perhaps there would not have been so many unpaid artists and bankruptcies in my personal VFX journey. I quickly pointed out that most of those occurrences actually happened in CANADA….and It’s happening again up there right now.

    http://variety.com/2013/digital/news/newbreed-vfx-trouble-cementing-montreals-bad-rep-1200497301/

    Among many things, it is discussions like this makes me wonder where all the money is really going, who’s really benefiting, and who’s really losing.

  17. vfxmafia says:

    To VFXsoldier:

    1) I can’t thank Soldier enough right now…just for the hope this study has caused.

    Question:
    “We are going to need a formal organization to give counsel and direction on how to proceed, and a petition would need to be filed with the Department of Commerce to initiate a CVD investigation.”

    1) What are your thoughts on this formal organization?
    2) Would the IATSE be apart of the organization?
    2) Formal names would have to be given to officially file a petition..no? Is their repercussions for these people?
    3) Do we have a budget yet for how much it will cost to file the petition?
    4) The CVD investigation would be an US backed effort, what fall out will there be on foreign VFX workers?
    5) will the head of the Dept of Commerce, Penny Pritzker make it difficult for the petition (google her if you don’t know her)

    I’ll have a few more when i read the rest of the report….
    thanks again…

  18. VFX_Boom says:

    Soldier: Spends $13,000. Gets Feasibility Study to begin to shift the VFX industry into a more stable, sustainable position.

    BC: Spends $430,000,000.00+ on subsided film work. Losses $200,000,000.00.

    Soldier for the win.

  19. LosingHope says:

    The study is great and all. But it still brings us long way round to forming some sort of organization to represent the industry and file the petition. What organization is that supposed to be? Scott Ross and his trad association seem stalled and going nowhere fast. And even then it would require the vfx studios to join and “bite the hand that feeds them”.

    I want this situation fixed as badly as the next guy. But I dont see a plausible step going forward from here really.

    • vfx oldster says:

      The Scott Ross proposed trade association is international and wouldn’t be involved in this kind of action anyway. His is more about vfx companies getting together to create standardized business practices for dealing with the film studios.

      The trade group to be organized for this CVD action will most likely be made of up of individual vfx professionals who are against subsidies. Maybe affected vfx companies might join also, but as you said, the companies are likely to be concerned with angering the studios.

      • Big $exy says:

        The heads of these studios will not come together for a trade org and thats because of a few reasons.

        1. Imageworks and ILM (and WETA..to a degree) are both owned by major studios, so they wouldn’t care at all.

        2. Most of the rest are privately owned. The owners of these studios receive funds for every job they complete (duh). They most probably channel a large percentage of those funds into their personal salary from the corporate accounts to maintain a specific lifestyle. Whatever is left over is what they use to maintain their business and meet pay-roll. If they cannot meet pay-roll, its no big deal as the owners personal assets and funds are shielded from any lawsuit. That is why artists work for shit wages and/or do not get paid. That is why companies stay in the red or have a 1% profit margin (other than under-bidding).

        3. Others are publicly traded and have to answer to share-holders and they might want a trade-union.

        4. The final batch are simply tax-write-offs for a larger corporation and hence they may or may not care about a trade-org.

  20. Jeff Smith says:

    What I can say now is good luck. The U.S. gov’t largely abandoned protectionism during the last half-century, despite it being the major industrial policy of the first two centuries of its existence. Too bad for us that the other countries have not.

    • Same with Canada. Canada gave up any hope of controlling distribution within their own borders under NAFTA. (And extensive lobbying from the big US 6)

      • vfxmafia says:

        To Jeff,
        NAFTA really fucked up labor for Canada, US, and lets not forget Mexico. The only ones who profitied were the big corporations. This is why the CVD angle could work….we dont need congress or companies…all we need is a couple of pissed off VFX artists to make a complaint (and hopefully get a ruling)

  21. vfxguy says:

    “That’s not to say that if the CVD route is successful that studios will not try to push work to states that will subsidize VFX work. I will let you know that I am also prepared for that situation and have a plan in the works.”

    I’ll look forward to hearing what this is, because it will happen if this CVD attack gets anywhere.

  22. Nick says:

    Going the WTO route or something a little bit more including of the international community would have been really positive to see. Taking on international subsidies I get a feeling this proposal will mostly be supported by the L.A. crew. I obviously don’t know the details and I’m not a lawyer but I was hoping for something a little internationally inclusive but I guess this blog has never really steered in that direction. I’m happy that you’ve managed to actually do something and it’s not easy what you’re doing so good luck. Unfortunately I don’t think this going to bring everyone together and only serves American interests. Forming any sort of trade union etc. that includes everyone will be really hard with this plan going forward.

    • Nick says:

      Not taking on international subsidies*

    • vfxmafia says:

      To Nick:

      “I get a feeling this proposal will mostly be supported by the L.A. crew.”

      The complaint CVD route would have to be made separately per country. Petitions would have to filed for every offending subsidy. Just one awarded petition might stop all studios from taking international money…..effectively ending international subsidies…..which then will stable the market and eliminate distortion bubbles…Once the studios loose leverage and VFX shops stabilize…..labor organizers can make a big push for labor
      rights….including standardized pay….OT..and normal hours….

      so how is this a bad thing for any VFX worker?

      • Nick says:

        In a perfect world I think it’s a step in the right direction. And let me be clear I’m not as well versed on the topic as you seem to be from following your posts. I just don’t think this proposal congeals any support in an already divided community. It’s American centric and aside from blogging and commenting it leaves a lot of internationals out of the process which won’t help any momentum. That being said it’s doing something and I support those efforts but unless this is implemented perfectly it might not have the desired roll on effect. I also have couple questions. Forgive me if they are simplified:

        1. What’s to stop the studios from leaving LA all together? There’s plenty of ways to get the money back to the people who want it.
        2. If it isn’t fully abided (Studio lawyers will do their best to prevent that) and at the end of the year the government says we want 50% (or not 100%) of the money back, doesn’t it still make sense to move production locations and in turn isn’t the foreign subsidizing government just handing money over to the US government?

        My concern I guess is that if it’s not properly and fully implemented it could have an opposite effect. Also this blog has done little to promote a harmonized world view of the issue but at the end of the day looks like America is going it alone and in reality it doesn’t matter if the international community supports it or not because it won’t really effect the direction of this campaign. Anyway I think a lot more information has to come out and maybe a PR campaign to get people on board with this or it ain’t gonna be pretty.

      • Scott Squires says:

        For all those who think that this and other things are LA centric:

        What many of us in the industry would like is a simple level playing field. That work would be awarded based on merit, trust, quality of work, efficiency as well as cost. That companies operating on minimal profits wouldn’t be forced to spend even more money out of those meager profits to set up yet another outpost in the middle of no where. That doesn’t mean all the work comes back to LA. Work has always been done at different places around the world based on factors other than subsidies. If a place in Germany does great fire then they may get fire work. The work is spread out according to the needs of the project and the abilities of the different companies to compete on their own merits.

        We also want to avoid building up unsustainable areas with larger companies and more workers than those particular areas might really support. In places that are dependent on subsidies they are in danger of not only losing work to places offer more subsidies, they’re also in danger of their own government lowering or dropping their subsidies all together causing a collapse of the entire area.

        From that perspective other countries have been ‘their own centric’ by essentially buying the work.

        And I certainly don’t remember ‘little internationally inclusive’ when countries have established their own subsidies. That’s why it’s a little strange when people have their own governments throwing money at the studios saying it’s not right for anyplace else to try to stop them or even to raise their own.

      • vfxmafia says:

        Nick….

        to answer your first question:
        Studios aren’t gonna move for a 30% rebate on a production. Actors, Directors, Agents, and studio execs are NOT like chump vfx artists who can get moved around from country to country like migrant cabbage workers. The studios and studio lots…are not going anywhere.

        to answer your 2nd question(s):
        I would guess if the Dept. Commerce or the NAFTA commision orders you to do something you would have to pay *(if you can get a ruling)….

        The fine would also be opposed on the studio’s not the other country. If deemed the studio’s were taking detrimental subsidy money…the film studio would have to pay that fine back to the US government….which would cancel out any bribe money on produciton.

        ..i would ask the lawyers who will be doing a podcast…for FXguide.com tommorow….

        send your questions to Jeff Heusser …..jeff at http://fxguide.com

        one of my very questions from an earlier post is:
        4) The CVD investigation would be an US backed effort, what fall out will there be on foreign VFX workers?

  23. Nick says:

    Thanks for the replies Scott and vfxmafia. Thanks for the link. I’ll try to put together some thoughtful questions.

  24. Dick Cuckolder says:

    Dick Cuckolder here. I’m quitting all forms of VFX/GFX/ETC ASAP. Why be a chump? Working on my motion/vfx projects and being busy… the timelines are always unreasonable and I find myself lying about my hours just to shut the client up. Lying in the sense where I get boned, not the client. And when I get caught, I not only get in “trouble” at work, but also boned and still unpaid for the extra hours.

    Good luck chumps!!! I’m sooooo done with this shit.

    -Dick

    • VFX worker says:

      you call us chumps? You’re the one working free hours.

      • Hector says:

        He s right

      • @Dick If you are working free hours that’s on you. Its on you as an individual to say ‘no’. (Especially seniors/leads). If you’re on a Motion Graphics/TV schedule and you aren’t being paid for hours worked, you are a FOOL.

        If you’re truly “done”, then surely you’ll have the stones to at least name-and-shame the place that has boned you to save others the same fate you have endured?

  25. Dose of Reality says:

    Thanks for your efforts VFXsoldier, at least you are trying to fix the pathetic state of the VFX biz. I think it will take years for any effective change, but even then, a career in CGI will never be all that great. I have been in the business for a really long time, and have experienced the degeneration of the industry first hand.

    I feel sorry for newcomers to this industry, probably with student loans to pay off, expecting a cool career in the magic of VFX. Most will never make it, and those that do will find out the ugly truth: Your exciting job is really being a migrant temp factory worker, with bouts of unemployment between projects. Getting work on a feature or game means you are just a small cog in a big machine. If you get a credit, it is with 500 other people, at the tail end of the credit roll below the craft service people. No job security, and there will be constant downward pressure on wages due to the huge supply of hungry college grads being cranked out yearly by the schools. Forget about buying a home, it will just be an anchor preventing you from moving to whatever city is hiring. Long hours are pretty common, and no matter how spectacular your work is, don’t expect any loyalty from the studio that hired you. CGI artists once had a modicum of respect, not any more.

    Not that it is all bad by any means, many of the projects are cool and the work is somewhat creative. That is why we were inspired to get into the business to begin with. If you love the work, then by all means press forward. However, one has to question if it is wise to pursue a career in CGI if it does not deliver a decent wage, as well as satisfaction and quality of life.

    • Big $exy says:

      New grads are not a threat to wages.
      Most are not employable.

      Out of the few who are, they will take on junior roles. They will not be hired as seniors or mid-level (this should be a given).

      The downward pressure on rates comes from:

      1. Having a large pool of senior artists in one city that are looking for work (LA)
      2. Having mid-senior level people doing the same job in a more expensive city for 30% less pay (all of Canada).

      • Dose of Reality says:

        Good points! Ultimately it is a supply and demand issue that causes wages to drop.

        When there are FAR more VFX graduates than positions available for many years running, of course that is the ultimate source of oversupply in the industry. I have seen crews staffed up with more than half of them grads right out of school. The producers love how it looks on paper with the super low wages, and leave it up to the supervisor to get them through their shots. The grads are happy to get their foot in the door, and eventually gain experience.

        Another interesting thing is how people loosely apply the “senior” designation. I routinely see artists with only 2 or 3 years experience declare themselves a senior. Laughable. In fact there are no standards at all for the term. In my opinion 10 years experience is the minimum before that designation applies.

        All that aside, my main point is that the VFX business is not all that great of a job these days. One could make a far better living with a trade like being a plumber, an electrician or a mechanic. Not as “glamorous” a job as VFX though. Or is it?

      • @Dose of Reality “…2 or 3 years experience declare themselves a senior.”

        Too sad and too true. They get laughed out the door once they work on big team. “Oh, you’re a senior character rigger and pipeline TD but don’t know a single scripting language?” Senior artist my ass haha

  26. Gregory Lemkin says:

    Amazing work, Soldier, in moving the conversation forward and moving the ball down the field.

  27. Jackadullby says:

    As a vancouver artist (continually displaced from my original point of origin – the UK – over the last few years) Skeptical as I am, I do support in principle this drive to eliminate subsidies, and respect the level of determination by soldier and others to really tackle it on the ground.

    I just hope that people don’t see this as yet another way to postpone taking any personal steps to organise and affect change.. Instead, expecting Soldier, Scott Ross et al, to “make everything better again”.

    I think the efforts to form a guild/guilds are also very important, and have a more obviously trans-national relevance. In my view, one effort should not dilute or be seen as mutually exclusive to the other.

    It does concern

    • Scott Squires says:

      “just hope that people don’t see this as yet another way to postpone taking any personal steps to organise and affect change.. Instead, expecting Soldier, Scott Ross et al, to “make everything better again”.

      I think the efforts to form a guild/guilds are also very important, a”

      +1 Professionals have to start and be involved in the change, whatever it may be. There is strength in numbers. We may make the magic but we certainly ignoring the business aspects and ignoring what the rest of the film industry already knows. United they stand, divided they fall.

      • Ymir says:

        But in order to do this, don’t we have to get rid of the subsidies (or at least deal with that issue) first? Can we organize, or create a VFX local/union out of thin air? Or do we have to organize a facility? In order to do that, we need jobs. We need to be actually working at the facilities, and with Imageworks and DD (the two major fx houses left in town) pushing all artist labor to Vancouver (due to subsidies) no one will be working at those locations to organize them. There are the mid-size providers, Method, Scanline, Luma, Pixomondo which I suppose we try with, but I believe they all have at least one location, if not many, outside of the L.A. area. Seems to me we need to get rid of the manipulative economic factors that are artificially relocating jobs so that there is better chance of getting something started.

    • Scott Squires says:

      A few things to keep in mind. Vancouver, Montreal, London, etc. can all organize. This is not just an LA issue and unions don’t only apply to LA.

      All those working should definitely seriously consider the union.
      All those not working should talk to their friends who are working.

      Everyone working should also be talking to their companies regarding a trade association.

      Everyone should avoid letting themselves be exploited.

      And if you have ideas make them known.

      • Jackadullboy says:

        Hear hear.

        I have an idea for starters. (Apologies if this doesn’t seem like a new concept…)

        Once you ARE working: Wherever you are, unless you have serious specific misgivings about guilds (share them and let’s get clarification for chrissakes !!), sign a card. It won’t cost you a penny… and keep signing again and again.

        What is there to lose, quite honestly?

        That would be my opinion/suggestion…

      • Hector says:

        Companies dont wanna hear about Unions…
        This is an end road.
        Try something else- this is not working
        And the guy next to me, i don t know why, but he doesn t want to hear about unions neither
        It s a dead project.

      • Scott Squires says:

        “Companies dont wanna hear about Unions…
        This is an end road.”

        Companies don’t want to pay you anything if they had the choice. They don’t want to pay overtime. (See UK). Companies are not eager to pay benefits. They are thinking of themselves.

        So are you the one making decisions about your life or is your company? Is the company going to cover your health care when they lay you off? Is the company going to always think of you first when they make decisions?

        “And the guy next to me, i don t know why, but he doesn t want to hear about unions neither
        It s a dead project.”

        So are you the one making decisions about your life or is your co-worker making decisions about your life? Is he going to cover your health care once you’re laid off? Is he going to contribute to your pension plan? Will he make management pay you the hours you worked?

        I don’t understand people who have no interest in their career or their own life. There is a reason the rest of the film industry is all covered by unions. For people who don’t get it, wake up. You’re not on staff. You won’t be working for the next 20 years at the same place. Your company will be making trims of wages, benefits, etc. and you won’t be the first thing they think about.

        One of the ways of of having some control over your life is to organize. There is strength in numbers. If everyone working in visual effects said enough is enough, things would change. But if people are happy with everything that has been going on (it must be great where these people are) and are willing to put their lives and lively hood completely into the hands of the companies and the studios, then you will get what they decide.

        Good luck with that. I’m sure in the next 10 years that will serve you well. And at that time there will be moaning that it’s too late for a union, that we should have done it 10 years ago.

        I also don’t understand people unwilling to educate themselves about some of these basic issues and about things like the union.

      • Jackadullboy says:

        @ Hector

        Sorry but I just palmed my face.

        “Companies dont wanna hear about Unions”

        …or about solutions for workers in general? Surprised?

        “Try something else- this is not working”

        …sounds like something a lazy film director would say.

        “And the guy next to me, i don t know why, but he doesn t want to hear about unions either
        It s a dead project.”

        …Interesting, so your logic seems to go something like this:

        All these people are going to great lengths arranging town halls and posting extremely detailed info sheets on the various pros and cons of unionization, and of organising the workforce.

        Nevertheless, there’s this guy sitting next to me who doesn’t want to listen. He also doesn’t give any reasons why, and doesn’t have any better solutions. Clearly he’s onto something, and I’m damned if I’m going to back the losing side, so I’m with him!

        But are you really on the “winning” side at the end of the day?

      • vfxmafia says:

        To Scott…

        I couldn’t agree with you more. It amazes me how artists know so much about their craft and dont think about retirement. How stupid can you be not think about your health…savings and investing….and basically do a cost of living assesment based on how much you make…

        Hector ask your buddy this next time….

        example:
        Im Joe Blow age 40..living in Los Angeles…..my monthly expenses $1,500 rent….$500 (parking, cell, electric, cable etc)…..$1,000 (food, occasional beer, lunch, dinner with the woman), add another $1,000 misc (Health care payment, credit card, auto loan, clothes, etc)…….thats about $3,000-4,000 a month…….

        Lets say….your monthly nut is $3,500 or $42,000 a year. If you retire by 65 and live 20 years …you will have to have close to a million dollars saved…….

        How many of you will have a $1 million saved by age 65?

        This doesn’t include a wife (double it )….not mention kids..college…healthcare….inflation

        A pension is one of the most important things you can pay into….
        and 401 K was designed so that it would cost employers less money to pay into. I manage my own stock portfolio and really warn people about 401Ks…..if your not saving and investing or paying into a plan…you need grow up and consider your future.

        A Union can provide a pension….and ground a career over a lifetime. Because there are more important things than sitting in a chair 12 hours a day…and staring into a computer…

    • vfxmafia says:

      Hector,

      I understand people’s fustration with Union talk. Union’s aren’t gonna stop the subsidies and unions aren’t gonna create more jobs. If this CVD petition works…its 10-12 months to get a ruling and possible another 12 months to review the rebate. So thats 2 years possibly out of work….and none of it involves a union.

      I too keep getting laid off before I even have a chance to start a union discussion at a shop…….it took 2 years for nickelodeon to get unionized….who the fuck is at company 2 years in these economic times?

      Pension, Healthcare, and a decent rate are great union perks…..but they aren’t coming anytime soon. So people need to plan this stuff for themselves regaurdless of a union……the more we demand this stuff for ourselves……maybe a union will form in the near future.

      • vfxmafia says:

        Mainly what people should be talking about … is how they are gonna survive this job dry spell.

  28. […] Customs can levy duties on those goods to offset the subsidies they received. PK&R, VFX Soldier noted in his post yesterday, “specializes in CVD issues” in industries such as lumber and shrimping. “A U.S. […]

  29. MR XY says:

    Okay I’ve gotta say this. Attacking subsidiaries isn’t going to change anything. You’re just going to limit the industry further.

    It simply comes down to this, you go where the work is – not the other way around. So if Canada is taking VFX jobs away from Americans, well then you bite the bullet and move to Canada otherwise it might be time for a new career choice.

    • Scott Squires says:

      Alright then Mr X, how many times do you wish to move and how often? As long as subsidies come, go and change, the work will always be moving. There are those in Vancouver moving to Montreal. Those in London moving to Montreal. Where will they go to next due to subsidies? Bulgaria? Pakistan? Nigeria? Antarctica? Will you be moving to India or China while they hold on to it for a bit before Vietnam or some other country underbids them?

      And exactly how is doing away with subsidies limiting the industry? Is the area you’re working in so dependent on subsidies that they will lose it all? Is it because you’ll have to move or is it because it’s limiting the industry to be in sustainable areas?

      • anna says:

        it’s the nature of the game. no different from other global government subsidies that try to attract business to their shores.

      • VFX Soldier says:

        Anna,

        You’re right global government subsidies are a part of the game… But so are countervailing duties.

        This is why we are choosing the CVD route. It would be hard to try to stop each countries’ subsidy program, so why not offset it with a duty that producers would pay to disincentive them?

        Given that you are for one country to offer subsidies, wouldn’t you be okay with another taking a duty?

      • vfxguy says:

        “And exactly how is doing away with subsidies limiting the industry?”

        Better to ask how is doing away with subsidies going to benefit the industry?

        All us Canadians and UK peeps work for 30% less than you LA guys according to the commenters up there. That’s also with the govt paying half our salaries as a lump sum back to the studios so really it’s 65pc less.

        You want to be competing on those terms when the subsidies go away?

        I for one am looking forward to continuing my global vfx road trip in louisiana, north carolina and new york, then on to mumbai and beijing. How about you?

      • MR XY says:

        The entire film industry is on the verge of implosion meaning the future is in low budget, subsidies allow filmmakers to make more for less.

      • vfxmafia says:

        To Mr. XY:
        your comment:
        “The entire film industry is on the verge of implosion meaning the future is in low budget, subsidies allow filmmakers to make more for less.”

        Two off my neighbors are indie film producers (both have been nominated for academy awards). They are just as fustraited. The indie guys actually take ALOT of production Subsidies (not VFX subsidies). The big budget films often pull theaters during the distribution process….making it hard for them to make any decent money on films. Mix that with people are going to movies less…

        Indie movies actually fund %40 of their production budgets with foreign or NY subsidy money.

      • vfxguy says:

        vfxmafia I hope your out every weekend stuffing pamphlets through your neighbors door telling them how evil subsidies are.

    • VFX Soldier says:

      Subsidies distort the market price for vfx causing companies that would stay in business under market conditions to go out of business.

      Even regions with subsidies feel the pain: UK vfx is down 23% since 2009. Part of the reason are Canada’s larger subsidies:

      http://www.creativeskillset.org/uploads/pdf/asset_18737.pdf?1

      If what you are saying is correct the. There is no basis for business to continue and it is the responsibility of governments to pay for vfx work by paying the studios for work.

    • Ymir says:

      “Attacking” subsidies may not change anything, but ending them will. For the better of the subsidized location’s own citizens.

      http://www.vancouversun.com/opinion/op-ed/Subsidies+Hollywood+film+producers+take+from+coffers/8533853/story.html

    • urizen says:

      I’ve read your post a couple of times, and I admit I find your points problematic. So let me ask:

      1. How may ‘attacking’ subsidies ‘limit the industry’.
      Can you outline the mechanism in play here for us?

      2. Reducing the issue to ‘going where the work is’ strikes
      me as being comically shortsighted purely as a personal
      strategy, and barely credible even as a fake macho
      bumper sticker on the back of the first or third of 20
      rented U-Hauls loaded up in the drizzle with all of your
      action figures and the best of your dorm room furniture.

      Am I right that you’re advocating submission
      to a nomadic dead end rootless existence in order to
      line the pockets of long suffering American corporate
      execs who in these hard times have been reduced to
      begging for handouts from a few enlightened
      humanitarian states and countries sympathetic to the
      financial strains they incur in pursuit of their
      latest vacation retreat from the cares and stresses of the
      Hollywood rat race?

      Well, bless their hearts and bless your big heart for
      caring.

      I will concede your right, however, that it may be time for a new career choice, given the relentless interference in market dynamics by local politicians completely disconnected from any concern for the well being of their constituents, along with the perverse eagerness on the part of numb nut vfx drones to roll over, take it, and then beg for more.

      This past Winter and Spring’s R&H debacle is an ugly stain, but more than that its an indictment of all of us. Roll over Sparky! Now beg like a good compositor! Ruff! A virtual tiger is not this company’s lasting accomplishment and testament here- rather, the miracle here is a virtual lap dog.

      Bonus question: Where exactly do you people come from?
      I don’t mean geographically- I mean where do you improbably easy and selfless doormats come from?

      Apologies in advance if I have misunderstood your post.
      Elaborate at will.

      • MR XY says:

        I’m not endorsing the mistreatment of workers (VFX or otherwise) but like I said above subsidies allow for riskier films to be produced, therefore creating a richer culture (or at the very least pop culture).

        Extreme Regulation and overpowering unions limit the way a film can be made (why do you think people like Peter Jackson and Robert Rodriguez choose to make non-union films)

      • MR XY says:

        But look there is merit to what you’re saying, it’s just going to make it harder for independents to make films but hey I get it “the needs of the many outweigh the needs of the few”

      • Scott Squires says:

        “subsidies allow for riskier films to be produced, therefore creating a richer culture (or at the very least pop culture).”

        Really? Which tent pole movie have you seen recently that created a richer culture? Did many of the Hollywood films that were ‘risked’ being made, need to be made or more importantly did they need to spend up all that subsidy money?

        Hollywood is more than willing to take any free money that anybody hands out. IF the areas truly wanted to encourage cultural films then they would put restrictions on the subsidies. Cover less expensive film projects only and only local productions. That’s where film subsidies should be doing if they exist. California puts a restriction of $75 million or less film projects which leaves out most tent pole movies.

        If someone wants to make an art film or a ‘risky’ film then the subsidies in all areas should be designed as such but the fact is they aren’t and don’t. Indies are having a very hard time getting support in the UK. Because the people who control that money are determining exactly what projects they want to give it to yet are more than willing to give money to any large studio, regardless of the project.

        And what we’re really talking about is film grants if you want to encourage art/indie films. The point of incentives is to lure work from elsewhere. That’s their whole point of existence. To pull work from one location to another (theirs). A grant would give money to qualifying projects without an interest of luring work away from elsewhere.

        ‘Extreme Regulation and overpowering unions limit the way a film can be made..’

        I’m not sure where you’re getting your information from. According to you there should be no safety regulations. Because that’s about the only regulations out there for film crews.

        In regard to unions they seem to have really held back JJ Abrams and others from making films they wanted because we all know the projects start and end with the union grips. Creative geniuses can’t be bridled by the fact that people need to be paid for the hours they work. And real geniuses shouldn’t be limited to give people a period of sleep and rest between shoot days. Come on people, we got a movie to make. 2 hours sleep should be plenty. What, we have to have a break during the long shoot day to actually let people eat? Darn unions preventing me from getting my artistic vision regardless of treating people like dirt.

  30. Dante says:

    I heard that Digital Domain will be moving into a new office with the Commercial dept and they are going to lay off 200 artists in the next weeks, is that true ? ? ?

    • vfxmafia says:

      yeah they kind of announced that 6 weeks ago…..they called everyone into a room and said want a job? ….well its now in vancouver……either move or say good bye

    • Andreas jablonka says:

      It’s not a new office though. It’s the current building the commercial division is in. most jobs go to Vancouver or vanish.

  31. joe says:

    i’ve had enough of this vfx bullshit and I for one am OUT… I’ve paid a lot of money to learn and invest in my skill but every damn studio in london is hiring…. IN CANADA. im not going to canada and especially not as a junior. In London I know i’d be on a low salary so forget working 10-12 hour days for 18k a year!!!

    Everyone above can debate away and I applaud everyone who is fighting the good fight but this industry is absolutely without a shadow of a doubt a complete and utter waste of time (unless you’re already mid way up the ladder).

    Good luck to everyone in the industry, i hope everything works out well but my 5 cents say that the subsidies will never go away. Also deadlines and margines will become more and more unrealistic, as will having any sort of resemblance of a ‘normal’ life.

    • Linc says:

      Hey Joe,

      Well said. Best wishes whatever and wherever the future takes you.

      Today I received one of the best email jokes ever. Hope this puts a smile on your face.

      Why Old Men Can Get Hired:

      Interviewer: What do you think is your biggest weakness?

      Old Man: Honesty

      Interviewer: I don’t think honesty is a weakness.

      Old Man: I don’t give a shit what you think!

      • Linc says:

        Obviously, it should read “Why Old Men Can’t Get Hired”, but oddly, it works either way.

    • VFX_Reckoning says:

      I’m with you there Joe, I’m not willing to move to Canada neither. A lot of us have invested a ton of money and time for the craft, just to be left at the doorsteps of despair, practically going bankrupt because of overpriced student loan debt, no jobs, no advancement or applicable opportunities in the skill set in order to live and grow within an industry…it’s enough to drive one insane. For the sake of your own mental health, get out while you can.

      Out of principle alone, I don’t think anybody should be giving into the the subsidies game, it’s just a corporate run-around on the backs of the little guys. But then again, I’m see very few people who have the will, or the backbone to really stand their ground for the sake of their own country’s stability and industry growth.

      • VFX_Reckoning says:

        …especially in a weak industry like VFX. Where most artists and vfx shop owners will bow,shutter and spread their legs like whimpering abused whores at even the slightest whisper of “money” from their Capitalist overlords.

      • trent says:

        Please remove this comment. It is offensive

      • VFX Soldier says:

        Oh Trent grow a pair.

      • VFX_Reckoning says:

        Soldier is right, and quite frankly, I’m glad you find that offensive. If you want to change that ideal you need to get angry and stand up, we need those fiery spirits.

        The fact that we STILL haven’t united in anyway, or formed a union or trade organization of some sort is a utter embarrassment. I find it pathetic that we as an industry are still sitting back and taking the beatings. So if thats the glove that fits, wear it.

    • Leigh says:

      FYI – at the recent Collider event in NYC, the head of recruiting at Framestore actually stated on a panel:

      “I have a worldwide mandate to lower artist salaries…”

      She then went on to elaborate how “taken aback” she was by how high the salaries are in New York and elsewhere outside of London. Most people in the room sat there half-snickering at her – no wonder they opened up in Montreal. Very few in NY were taking the bait anymore…

      • Scott Squires says:

        “I have a worldwide mandate to lower artist salaries…”

        That’s part of the problem. Facilities are now looking at artists as commodities as well.

        In the UK they’re not even paying real OverTime so those in that location should run the numbers and calculate their true hourly rate. 50hr week = 55 hrs normal. 60 = 70hrs normal. etc. Divide your weekly by those numbers and see what you get for a true hourly rate.

        Maybe if both studios and facilities did a better job of managing the work (and minimizing massive changes) they wouldn’t have to put all their weight on workers to make up for their mistakes.

        If you’re in vfx you likely have to live in a high price area. So to live you will need a higher wage than those who can work in smaller towns and lower cost areas.

        If you’re in vfx you likely have creative and/or technical skills that Silicon Valley and other places might be willing to pay for. (i.e. companies may compete to get you that’s why wages are higher)

        If you’re in vfx you likely do not have a staff or permanent job. (even if you might think otherwise) You work from project to project. And how do you think you will be able to afford to live in that vfx city when you’re laid off for months at a time? Same reason why most film crews are paid higher rates is because ultimately they’re freelance and will need to pay their rent and other things even when not employed.

        But the facilities will cause a lower of wages and other reductions as long as the majority of workers agree to it. United we stand, divided we fall.

      • LosingHope says:

        Leigh….Is this from the Collider VFX panel that was recorded/broadcast? I’d like to find this on video.

    • Hi Joe,
      I feel for you. I did about 9 years as a compositor, working at most of the large UK companies and decided to get out. It has taken me the best part of 2.5 years to move away from the vfx industry and I have to say for me it is one of the best decisions I have made. I’m 34 now, so young enough to start again, but I have had to start at the bottom and take a very large pay cut but it’s all been worth it.I have for my sins entered another part of the industry, which is much smaller and where we get to sit in a room with natural light and leave at 6….. but it’s far from perfect, but it’s a big step up from the vfx work. I for one also fear that subsidies are hear to stay, it’s just so engrained in this business that I can’t see it going away anytime soon. All the best for your future.

      • Joe says:

        Cheers mate, I’m glad it worked out for you. My situation is such that I left a relatively well paid and respected job to pursue a career in vfx a few years back and as such took a huge pay cut. Looking back I really kick myself for having to go through all of this. I’ve missed mortgage payments, ups and down with the lady over hours, I could go on. We all know these subsidies are an absolute joke and deep down, I know it will never change. We’re not just battling subsidies but also young artists working for free/low pay at every single facility in London which is in my opinion a major factor in the job market. On top of that training facilities are selling dreams to people that need little persuasion only to realise that dream is dead. Seriously, the more I talk about the subject the angrier I get! Good luck all..!

      • mark-s says:

        hi ex-compositor. I was really hoping you could answer a wee question, this may not be the forum for it but I would really like to know what the vfx insdustry is like in London without it being sugar coated. I have contacted a training facility in London that I was thinking of studying with who assure me that there are plenty of jobs in the market but before I move cities and embark on the educational process then the job market I would like to know your views. Thank you in advance.

      • Charlie Don't Surf says:

        Already been answered here: http://www.reddit.com/r/vfx/comments/1hf65h/for_those_in_the_uk_what_state_is_the_vfx/
        Personally, I got the hell out of London as soon as I could. And it took me 5 long years. Things were better when I arrived. Since 2009, employment in London vfx is down 23 per cent. Source: http://courses.creativeskillset.org/assets/0000/2819/Census_report_6.pdf
        This is last year’s data as well and official numbers, so expect the reality to be uglier. This year it got worse, from what I hear from my mates.

        TLDR: don’t go to London for vfx work.

      • Hi mark-s

        What is the industry like… hmmm. The industry as a whole in London is ok to work in but has changed considerably since I began.I also started at one of those training facilities, in fact on the very first course they had, so it worked out nicely for me and I remember being shown around one of the now big studios and they only had one floor for vfx and 1 roto artist, how things have changed.

        I can’t really comment on what employment prospects are like at the moment but I was only out of work for 3 months during my entire working time. Most of my jobs came from repeat business and contacts, so I would be wary of attempting to enter the business now without those contacts as competition is much higher, but if you’re talented and want it enough you should be ok. I also now question spending thousands on these training courses when you could just put together a decent showreel at home whilst working part time and apply with that, it depends how dedicated you are…. the connections through the courses are useful but talent will usually shine through.

        In terms of the companies I worked at, all were nice places, which generally tried to take care of you as best they could, my reasons were leaving were more about the industry as a whole, the long hours, the decreasing pay, health issues associated with sitting in a dark room for x number of hours a day, weekend work, lack of recognition, lack of health care, holidays, pensions, being stuck at the end of the film process, the list goes on and on… but everyone I worked with over the years was great which made it somewhat bearable..

        I was just looking for something more stable, not having to worry about where I would be working after my contract expired..

        Good luck!

      • london-artist says:

        Hi Mark-s

        It sounds like you’re thinking of studying at escape in london. I studied there a few years back and take my advice. Its a 100% waste of money! I dont debate that when they first started they were the top place to study but the training these days is shocking, its the kind of stuff you can easily teach yourself without the heartache of throwing 11k i think it is down the drain. (keep in mind they cant teach you the art, only how to press buttons)

        I’ve had friends that have studied there since me in both the compositing and cg classes and the majorty of them have all admitted after the course that its nothing they couldn’t have taught themselves with a few books and a couple of terms at phd

        I’m pretty lucky in that i’ve had ‘semi’ regular work but i literally got in right before london started to turn ugly. WIth they way things are I cant see anyone from escape getting hired in london. There just aren’t any entry positions in London.

  32. Thanks to share it. Very useful legal information.

  33. Dean says:

    I spoke to a vfx artist friend of mine in LA recently and I asked him about the possibility of him coming to London due to the lack of jobs in LA. He replied “no way”, when I asked why, he said, “as soon as the artists stop moving to the work, subsidies will be more or less meaningless and the work will come back to the artists (in whatever area they may be)”.

    Maybe a different approach should be thought about? Rather than trying to ban subsidies, maybe artists should just refuse to move from their home base (whether it be London, LA, NZ, BC etc), effectively making the subsidies meaningless anyway? If the artists don’t move, any one company cant ramp up to ridiculous size and take on 15 projects at once (Dneg), meaning studios will have no choice but to spread the work out globally…..

    • Scott Squires says:

      That is one way and would certainly put a damper on it. Even better if the vfx companies refused to do so. If the first companies being ‘requested’ to setup shop elsewhere had said no much of this would not have happened. As it is now they ask how far when the studios ask them to jump.

      The flip side is people have to make a living and one definite thing that the vfx workers do not have yet is unity. So while a few people may hold out and not move there are plenty more than willing to move. As I’ve said before if we can unite then we’d have some leverage in the process but as long as most vfx workers feel it’s all about themselves and each individual has to do their own thing (business wise) then don’t expect any change.

  34. Leigh says:

    Soldier – thanks again for this amazing effort. I would like to add one more thought to this discussion. I’m sure those working in foreign studios will take exception to this approach of reclaiming subsidies as being “anti-global” or “protectionist” but frankly it has nothing to do with them in the end. Bottom line is you have studios contracting the production of a product, which they develop & distribute domestically, to international firms. Said studio then gets a check over the wires for playing in that market. That income is taxable under US law and right now they’re not paying taxes on it, which other industries DO pay when in the same situation. In fact – even in domestic markets where subsidies have been enacted, those rebates are taxed as income.

    • Raiders Fan says:

      Subsidies are everywhere….

      City of Oakland, CA will give you a tax credit to train and hire people. Supported by the State Legislature:

      California Enterprise Zone Hiring Tax Credit
      If you hire an eligible employee to work in the Zone, you may qualify for a state hiring tax credit. Each employee your business retains for five years could save you $37,440 or more over a 5-year period.

      California Enterprise Zone Sales and Use Tax Credit
      As a corporation, the companies may claim a credit equal to the sales or use tax paid or incurred to purchase the first $20 million of qualified machinery ($1 million for individuals). Qualified machinery is the machinery or machinery parts used to:

      § Manufacture, process, combine or otherwise assemble a product
      § Produce renewable energy resources
      § Control air or water pollution
      § Data processing and communications equipment, including computers, computer-automated drafting systems, copy machines, telephone systems, and faxes
      § Motion picture manufacturing equipment central to production and post-production, including cameras, audio recorders, and digital image and sound processing equipment

      The business must use the machinery exclusively within the boundaries of the enterprise zone. Use tax paid on purchases of machinery outside California qualify for the sales and use tax credit only if machinery of comparable quality and price was not available in California at the time it was purchased. The sales tax paid on qualified property purchased using a financial (conditional sales) contract qualifies for the sales and use tax credit.

      The City of Oakland received an initial 15-year Enterprise Zone designation in 1993. The Zone was renewed in 2008. Oakland businesses in the Zone – from large manufacturing companies to small neighborhood restaurants – can reduce their state taxes by taking advantage of Enterprise Zone benefits.

      http://www.caezonline.com/oakland/

      • Ymir says:

        But these subsidies don’t go to rich corporate owned foreign studios. These are local subsidies, paid to local employers, to stimulate local employment. BC should consider doing the same thing rather than sending hundreds of millions of tax payer dollars out of British Columbia to Los Angeles based movie studios.

      • The tax credits you reference in your comment do not operate like film tax credits. The EZ credits can ONLY be used to reduce actual taxes owed. Important follow-up, the California film tax credits issued to the majors also operate this way. Film tax credits issued to the majors in California or tax credits issued in the Enterprise Zones operate to reduce the taxpayers own tax liabilities. If the person or entity has tax credits in excess of what they owe to the state, they can only carry the credits forward to future years.

        Compare the EX credits or the CA film tax credits to the refundable and/or transferable film tax credits offered outside California. In Vancouver, for example, if the a production company doesn’t have any tax liability it can apply film tax credits towards, the Province cuts them a check for face value of the credits. Owe $0 taxes in BC but have $1 million in film tax credits? BC writes a check for $1 million. In California under the EZ credits or film credits or the majors, the credits are worthless unless you actually have a tax bill. If you don’t, then no cash for you.

        Reducing taxes owed is one thing. But cutting a check for tax credits when you don’t pay or owe taxes to begin with is quite another.

        People railed against Brad Wall when he made the Sask film credit non-refundable. Using your logic, even Wall’s non-refundable credit is a subsidy. Thus, a refundable or transferable tax credit is without a doubt a subsidy.

    • trent says:

      “I’m sure those working in foreign studios will take exception to this approach of reclaiming subsidies as being “anti-global” or “protectionist” but frankly it has nothing to do with them in the end.” — um, yes it does. This last remark is incredibly narrow-minded.

  35. […] feasibility study concluded that the best way to discipline visual effects subsidies is to use existing trade laws to […]

  36. […] a resolution. This past summer we released the results of the study and intend to execute it. You can read about it here. Basically we can discipline these international subsidies by instituting a duty that offsets the […]

  37. hottube says:

    Yesterday, while I was at work, my cousin stole my apple ipad and tested to
    see if it can survive a 40 foot drop, just so she can be
    a youtube sensation. My iPad is now broken and she has 83 views.

    I know this is entirely off topic but I had to share it with someone!

  38. […] money for US producers. Mr. Webber would be surprised to know that there are a very good number of UK and other international professionals who have donated to our legal effort because like many US VFX artists, they too suffer from a cycle of displacement caused by […]

  39. […] and have sought to institute the same tariffs the UK has used to level the playing field. You can see our legal teams recommendations here as we organize a demonstration against these subsidy […]

  40. […] year many of you helped crowd fund a legal study done by a Washington DC-based law firm I met two years ago. The goal of the study was to suggest a […]

  41. Hi there, after reading this remarkable article i am too cheerful to share my experience here with colleagues.

  42. Do you have a spam problem on this site; I
    also am a blogger, and I was curious about your situation; we have
    developed some nice procedures and we are looking to
    trade methods with other folks, please shoot me an email if interested.

  43. I like the valuable info you provide in your articles.
    I will bookmark your blog and check again here regularly.
    I’m quite certain I’ll learn plenty of new stuff right
    here! Good luck for the next!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

Join 1,111 other followers

%d bloggers like this: