While VFX professionals were laughing it up to Patton Oswalt at the VES Awards last night, the LA Times released an article as a friendly reminder that armageddon is coming to California:
California’s visual effects industry, which pioneered the use of computers to create and manipulate images in live-action films, is under siege.
VFX Producer Shannon Gans tweeted her reaction:
Article about what business has been like for 2 years in film VFX. Not the entire picture of what is going on.
Indeed, the Times article wrongly implies that the problems in VFX are unique to California. They are unique to the whole industry for one reason:
The VFX industry subscribes to a shitty business model.
The same can be said for more developed countries that offer lucrative government subsidies. In March 2010, Canadian VFX giant CORE closed it’s doors. There have been multiple occaisions of Montreal VFX facilities unable to pay artists as they went out of business. The bad VFX business model knows no borders.
It’s Labor’s Fault!
The article alludes to the price of labor being the problem with many artists in California making $75-$150k a year:
“We have the best artists here in the world,” Grossmann said, “but they are pretty much the most expensive artists in the world.”
However, the price of VFX labor is quite expensive in other countries. I would argue the best artists are at Weta Digital and they are paid some of the highest rates in the industry. At one point during Avatar, Weta was offering artists in the states free flights and free hotel rooms. The job: Finish just one shot on Avatar.
It’s The Subsidies’ Fault!
Of course much of the work is going to NZ because of free government money. What’s crazy is that for all the superb work they do, and the huge government subsidies offered by the NZ government, they almost lost The Hobbit films had they not let WB shake them down for more subsidy money. The same can be said for basically every other vfx market. New Mexico recently contemplated cutting it’s subsidy by more than half. To have your company rely on government rebate money for your clients makes a shitty business model even shittier.
A Confusing Picture
Yet the article mentions that much of the VFX work in California is going to subsidy rich places like London or cheap labor areas like India, but then you read this:
McGuinness of Asylum is relocating to Singapore to head a visual effects operation for London-based company Double Negative Visual Effects.
Well now I’m confused. I thought it was all going to London for the subsidies or India for the cheap labor but Singapore? The 11th most expensive city to live in? Yes ILM is opening a facility there, but they also opened a facility in Los Angeles too. Some say it’s temporary, some say it’s not.
Combine that with ironic news that Indian VFX company Prime Focus is expanding to a 13,300 sq ft facility in expensive New York:
The increased capacity will also allow Prime Focus to double its workforce in NY.
Wait, an Indian VFX company is outsourcing work to New York City?!
Well at least that work is staying away from California right?
Nope. WB VFX producer Chris deFaria mentions how important subsidies are which is why films like Jack the Giant Killer are being filmed in the UK. Yet what wasn’t reported was that WB awarded the VFX work to Digital Domain in California.
Furthermore, even the most outsourced tasks such as rotoscoping have made a huge come back in California. There have been job posts for roto artists in California almost on a daily basis. If it’s so easy to send work overseas to cheaper locations, why are top companies such as ILM and Pixar so busy engaging in collusion to prevent wages rising in California?
A Clearer Picture: The Era Of Big VFX?
So what the hell is happening here? Why are these small to medium sized VFX companies going out of business? Are they just not able to finish work? Maybe. Are the facility owners doing drugs or something? (of course not!! I kid!)
The studios want VFX done fast, good, and cheap. Unfortunately they can only choose two. I was going to write a post about a book called The Visual Effects Producer which gives a good glimpse into the studio side of VFX production.
One revealing paragraph describes an important factor why studio executives prefer large VFX studios over smaller ones: If work can’t be finished, which is often the case, a large facility can be sued for damages while smaller ones usually go bankrupt. Studios love to beat up facilities for their lunch money, they just don’t want to kill them!
The book also describes the importance of artists. Studio VFX producers and supervisors actually ask if the artists who worked on shots for a facility’s demo reel are still employed at the studio. Ain’t that something?
At the end of the day, regardless of cost of labor, subsidies etc, it comes down to quality and talent. The work will go where the talent resides.