At the time I didn’t really see that. What I did see was that VFX work was instead going to expensive locations like Vancouver and London. How could that be possible I thought. London for example has the highest office rents in the world. So I decided to start this blog to write about the main reason VFX goes to these locations: Subsidies.

US studios were demanding that work be done in locations like the UK and Vancouver because their governments offered huge amounts of free taxpayer money. For example, in Vancouver, for every $100 paid to a VFX worker, US studios could get a $60 rebate back from the government. Soon they would require facilities do the work there even though the VFX facilities rarely saw the savings from the rebates.

Fast forward a few years later and now Rhythm & Hues, which did an abundant amount of offshoring in Asia, has gone bankrupt while other facilities are being forced to go to Vancouver, not India or China. Just to give you an example, this week I get a bunch of emails about a meeting that took place at the recently Chinese/Indian owned Digital Domain about moving work away from California. So was the work going to India or China? No, it was Vancouver.

Now don’t get me wrong, Vancouver is a lovely place I’m certain. However, that isn’t the point. The problem is that the only reason for work to go to that region is because of massive subsidies. Once they’re gone or some other place offers more, it’s game over.

The recent elections in BC were a big shocker. The NDP was promising larger subsidies for the BC film industry after it was losing out to Ontario and Quebec which were handing out more money to US studios. The NDP was way ahead in the polls and surprisingly lost.

Now there is an ongoing legitimate debate about the costs of these subsidy programs. The current BC Liberal government is acknowledging that these programs are “unaffordable” and that they “are being played” by the US studios. Their hope is to end the race to the bottom by getting other provinces to agree not to outbid each other.

I’ve been predicting this disaster for quite a while. However, I’ve also been working hard on a solution. As many of you know, subsidies distort global markets and violate many international trade agreements which ban subsidies. Last December we successfully raised funds to hire counsel to help challenge these programs. We hope to get the results out by the end of the month.

In other DD news, the Palm Beach Post’s Jeff Ostroski has an in-depth and excellent report on how Florida lost over $100 million in subsidies for Digital Domain. FXGuide also did an interview with former DD CEO John Textor.

Just to compare, Finance Canada’s John Lester estimates British Columbia is losing about $200 million a year for it’s subsidy program while Florida took a one time hit of $100 million on it’s DD gamble. However Florida is a big state with a $750 billion GDP. BC on the other hand is much smaller at around $200 billion GDP. Yet this year alone BC has budgeted $437 million in subsidies for the film industry!

In other words, a nuclear bomb is armed in BC and it’s only a matter of time until it goes off. As I’ve always said:

You live by the subsidy, you die by the subsidy.

Soldier On.

Thankfully many of you have been driving the conversation. One of those people is Dave Rand who came out of nowhere fighting to get him and his colleagues at Meteor Studios in Montreal paid after the company closed 5 years ago.

Since then I’ve posted about other instances where Montreal VFX pros were left unpaid. In 2010 there was Fake Studios. Then there was Lumiere. At the same time, Discovery Communications CEO which was sending work to Montreal facilities was making out like a bandit.

Well now there is news that New Breed in Montreal isn’t paying their artists according to VFX Solidarity’s page:

Just heard some disturbing news last night from a friend in Montreal. Seems New Breed has bounced the last two paychecks to its artists. So that’s 4 weeks no pay. They’ve considered a class action but the higher ups at New Breed don’t seem to concerned since the artists really seem to exhausted to follow through. Since I’m not Canadian nor is my friend, does anyone from our Canadian peers know what options they may have to fight this or know any good lawyers in the Montreal area?

Now The Animation Guild blog has posted a letter from Dave Rand urging them to stand together against this:

Leverage is what ultimately runs everything in our business, and all businesses. Sadly it’s rarely about ethics or fair play. Almost every labor law was created because of labor unions and the exposure they gave to injustices like these. (Here’s the list.)

Our government labor departments have been weak when it comes to getting lost wages. Bankruptcy laws protect owners from losing their “personal money”. Only your personal money is at stake. That is what incorporation is all about, their protection and not necessarily yours.

Right now your leverage is evaporating every day you approach delivery without a paycheck. Given this history of Montreal, I hope I’ve enlightened you to your world.

Dave Rand took a lot of heat in BC for standing against subsidies as #savebcfilm tried to lobby for them. Yet time and time again whenever Canadian artists went unpaid he was one of the few who stuck his neck out publicly to fight and get them paid.

In a similar story, a huge ruling by a US Federal Judge concerning unpaid interns in the film industry.

Soldier On.

I’ve said often that I believe the amount of work going to cheap labor locations like India is overstated.

Below is a statement from the Facebook page:

The truth about animation industry in India.
the “ANIMATION” industry in India is going through a very tough time. most of the big animation studios like crest, prana, dq entertainment, big animation are removing people in huge numbers. most of the studios have reduced to half or less than half of there original strength.most of the studios don’t have any new projects for future. no one knows when any of them might close.
but still nobody is telling this to the students and there parents. the animation institutes are still projecting a rosy picture of the industry. they are the only people making money. they charge lakhs of rupees from students, selling dreams of working in animation industry and in companies like pixar dreamworks etc. they give them dreams of working in Hollywood. but in reality there education is so pathetic that the students don’t even get selected in indian studios. and with all the job cuts happening there is no demand for any new people.In fact the people who are working in companies also don’t know when they might be thrown out. but still the institutes are throwing around figures and statements like “Indian animation industry needs 100000 people” “Indian animation industry is a mutli billion dollar industry” and stuff like that.
the truth is that there is no “boom” in industry.
coming to the salary .the salary is disgusting. u get 6000 to 7000 per month after spending about 1.5-2 lakh rupees and have to work long hours. how can u survive with such salaries in metros(like mumbai,delhi,hyderabad,banglore etc) where all the studios are situated.
and there is no work satisfaction. all the so called animation companies in india are sweatshops for US and europe companies. the main selling point of the animation education by institutes is “CREATIVITY” “IDEAS” ETC. but u don’t get creative freedom in the companies.

and regarding the placement of there students that the institutes say , people should ask them how many students among the so called “Placed” students work in a actual “Animation” or “VFX” company.
the truth is that most of the so called “Placed” students work as graphic designers at small time companies ranging from photo studios(where there job is cleaning images of people) to designing pamphlets for coaching classes. and they get salaries about 5000.
Also they make there students faculties.when the person has not worked in the industry how can he teach others about it.

Soldier On.

If I believed in God, I'd want him to be like Ray Harryhausen — nudging us one frame at a time toward the sublime & fantastic.—
Patton Oswalt (@pattonoswalt) May 07, 2013

Ray Harryhausen was a visionary whose innovations helped shape the craft of filmmaking and… on.fb.me/18sncLu http://t.co/kpyZdwtp8q—
Sony Imageworks (@imageworksvfx) May 07, 2013

Ray Harryhausen gave me my first vision of true fantasy in the Sinbad films and Jason and the Argonauts. He's passed and I'm sad.—
Adam Savage (@donttrythis) May 07, 2013

Ray Harryhausen: A blunt reminder of it's the person, not the technology. He is an inspiration to us all. RIP—
Brian Tatosky (@virtualbri) May 07, 2013

"Without Ray Harryhausen, there would likely have been no STAR WARS”
- George Lucas.
RIP Ray Harryhausen 1920 – 2013—
ILM Visual Effects (@ILMVFX) May 07, 2013

Sad day. Ray Harryhausen passes on. The man who was kind enough to tell me, "You got robbed." at the VES Awards.—
steven rogers (@thirdmonster) May 07, 2013

Ray was very much of an inspiration for me to get into visual effects and for many of my generation. He will be missed.—
Scott Squires (@scott_squires) May 07, 2013

RIP Ray Harryhausen. He was a source of inspiration, the master of stop motion, and even a voice actor in Elf. His work still holds up.—
Jon Favreau (@Jon_Favreau) May 07, 2013

I wanted to commend your company after it was revealed in the NY Times that you will not continue to do business with vendors that don’t adhere to certain labor standards after a series of terrible events in Bangladesh.

However, I believe there is more that we can do. For the last few years I’ve written this blog on the visual effects industry and the bad labor practices of many vendors you utilize to create many of your blockbuster films. Let me make it clear that while many of these practices will never come close to what happened in Bangladesh, the events there serve as a catalyst to improve conditions for all workers at the vendors and subsidiaries you work with.

Prime Focus is a vendor in India you’ve utilized for doing visual effects. Last year I wrote about an indentured servitude-like program they conduct after I received emails from Indian workers there.

Another vendor you may have yet to work with yet is Pixomondo. I have received many emails from their former workers after they closed various facilities and left them unpaid. The same has occurred at Rhythm & Hues after it filed for bankruptcy and left many unpaid.

In another ironic twist, while this is not related to the latest version of Digital Domain, independent contractors that were paid during bankruptcy now find themselves being sued by creditors in an attempt to get them to return their wages.

Sony Imageworks is a big vendor for many of your films. I get many emails from workers there who tell me that they are given an ultimatum to move to a location that offers your studio a rebate or else they will be laid off.

These practices are not limited to just your vendors. LucasFilm has been a recent huge acquisition for your company. Last year I wrote about Luis Pages, a worker at the Singapore facility that was terminated after taking agreed upon time off to tend to his ill wife who suffered from a high risk pregnancy. It’s also worth mentioning the current trial involving collusion against workers in California between LucasFilm and another subsidiary Pixar. LucasFilm also recently announced it may open in London. Many of the workers in the UK would like to unionize and are not paid overtime for many of the films they work on.

I could go on and on but if you’d like to read more about these practices take a stroll through my blog. Maybe it’s time we solve these problems?

Soldier On.

The BBC mentions the VFX Soldier blog as the European Commission opens an investigation into the UK’s attempt to subsidize the gaming industry. Once again, this blog has become a presence in arguing against the race to the bottom:

Commission doubts whether:

• aid is necessary to stimulate the production of such video games;
• limiting expenditure for the tax relief to goods or services ‘used or consumed’ in the UK would not be discriminatory;
• offering this type of aid would not fuel a subsidy race between Member States; and
• the proposed cultural test ensures that the aid supports only games with cultural content without leading to undue distortions of competition.

A year ago, the UK government announced that it would offer subsidies to the games industry after heavy lobbying from TIGA, a UK games industry group.

At the same time, the European Commission, which regulates many international policies for EU members, was in the process of opening consultations on it’s proposal to mitigate subsidies for the film industry.

I took the opportunity to get involved in these consultations as I’ve written extensively on the subsidy race in the film industry and how they have heavily distorted the price for visual effects. I urged the EC to crack down on subsidies and challenge the US and Canada to do the same or else the subsidy race would spiral out of control and spread to other industries like the games industry.

This comes as a surprise to many who argue for globalization but fail to realize many of the policies that encourage ending trade barriers include the end of subsidies too.

We’re still working on the details of our subsidy challenge. I know many are interested in the next stage. Please be patient and let our team work.

Soldier On.

Regent Hall 275 Oxford St
W1C 2DJ
London United Kingdom
Wednesday, 3 April 2013 from 19:00 to 21:30

You can reserve a ticket for the event here:

http://vfxforum.eventbrite.co.uk/

There is a Facebook event page here:

https://www.facebook.com/events/136542529847110/151684668332896/

You can find more info about what BECTU offers here:

http://www.bectu.org.uk/get-involved/campaigns/VFX/blog/2013/03/25/69

https://twitter.com/VFXUnionUK

The UK VFX industry is a bit unique in the sense that most of the work done there is one a day rate where many are not paid overtime. I think this is one of the issues that many there would agree needs to be resolved. I’ve also posted about enforcement of the working time agreement which is another labor issue.

The argument against overtime is the fear that the work will go away. When you consider other major VFX markets like NZ, Australia, Canada, and the US pay overtime, you’ll realize that paid overtime is quite reasonable.

Good luck and please post in the comments on what happened.

Soldier On.

It’s fairly common knowledge that management has been coercing employees at Imageworks in Culver City to move to Vancouver or get laid off. Variety’s David S. Cohen wants to hear your story. You can email him (david dot cohen at variety dot com).

I have no problem with people who volunteer to move to Vancouver or where ever they want in the world. What I have an issue with is companies that coerce their employees to take upon tremendous costs of displacement so US Studios can obtain a government bribe, only to be left out once another government offers a larger deal. We saw this happen last year with Imageworks New Mexico.

Soldier On.

This week events culminated with a delivery of 30,000 signatures from #savebcfilm asking for larger subsidies and a meeting where BC’s Finance Minister basically asking Ontario to stop the race to the bottom:

“They’re playing the taxpayers off one against the other,” de Jong said after a meeting with Ontario Finance Minister Charles Sousa in Toronto.

The Mill announced it will be closing it’s TV VFX division. Back in 2002 The Mill announced it would exit the volatile market of VFX for films. There’s a very good interview with an exec for the Mill about their reasons for exiting VFX for film and focusing on commercials instead (paywalled unfortunately).

Imageworks LA Layoffs

Layoffs are nothing new to the industry but VFX Solidarity broke news of a number of layoffs at Sony Pictures Imageworks. What makes this round particularly notable is that this was mostly long-term supervisory and senior talent. According to VFX pro Thad Beier:

Reports of extensive layoffs at Sony Culver City today. I have heard that they have been “strongly encouraging” everybody to move to Vancouver…

First the subsidies came for the entry-level artists,
and I didn’t speak out because I wasn’t an entry-level artist.

Then the subsidies came for the mid-level pros,
and I didn’t speak out because I wasn’t a mid-level pro.

Then the subsidies came for me,
and there was no one left to speak for me.

Solder On