Help Bring Back Lost VFX Work To The US

VFX artists and producers, we need to help each other out.

Over the years those of us who have worked in the US VFX industry have seen a significant amount of VFX work for US studios go to other countries. The US studios cite that the reason for this is because of rebates in the form of subsidies offered by the governments of Canada, UK, New Zealand, and Singapore.

I believe a very strong complaint can be made that these subsidies may violate existing international trade agreements.

The Problems Caused By Subsidies

Many of these rebates range from 15% to almost 50% of qualified expenses incurred by doing VFX work in the hosting country. In other words, for every $1 spent for VFX work in another country, US studios can expect sometimes 15 to 50 cents back from the foreign government.

As recent reports in the LA Times and Hollywood Reporter suggest, this has had strong ramifications for many of the VFX facilities based in California. Many of them have been forced to open satellite facilities in other countries so their US studio clients can receive the subsidy. Those that are unable to make the jump have gone out of business. Other small to medium sized facilities are treading water and cutting costs that have had adverse effects on the workers here.

Many VFX jobs have dissapeared, while the ones that are still here are usually contract or project based. Many facilities are forced to cut health and retirement benefits and some resort to illegal labor practices such as collusion, unpaid labor and overtime, and independent contractor misclassification to avoid paying social security and payroll taxes. This has forced many workers to move overseas to attain work that is no longer here or well paying enough.

I’ve spent restless nights researching these issues in the industry for my own understanding and have posted about them at length. What I have discovered is that the US and other countries have entered into previous international trade agreements on how subsidies can be used in trade. According to US trade law experts, the current subsidies offered for US studios to do VFX work in other countries may be in violation of these trade agreements.

How You Can Help

I was under the impression that only an organization that represents the VFX industry could lobby congress to take a look at these subsidies. One of my most frequent commenters who goes by “Winston Smith” has pointed out that I have been mistaken.

It turns out that anyone can file a complaint and the process is actually very easy. I’d like to guide my readers though the process. If you agree, I’d encourage you to join this campaign to bring the VFX work we have lost over the years back to the United States.

Any US company or worker that believes they are being harmed by violations to existing international trade agreements are allowed to file a complaint through the US Trade Compliance Center.

The complaint can be filed here.

There are US trade specialists that are available in almost every major city in the US that you can meet with or contact through email if you have questions.

In the complaint form you will be required to give contact information and state the specific trade barrier problem you need addressed. Make sure you include “business confidential” if you feel any portion of the information you submit could cause your company substantial competitive harm.

So What Should You Say?

Well first off be polite. I suggest the complaint VFX facility owners and workers should make is located in their list of common trade problems. Namely those that fall under “Government procurement contract barriers. I think these are trade issues in bold are causing our industry problems which indirectly lead to contract bids being lost and less VFX jobs in the US:

Do you have a problem related to government procurement?

Are you prohibited from bidding on foreign government contracts?
Are there mandatory domestic content requirements or price preferences in foreign government tenders?
Are the bid deadlines too short to prepare and submit proposals?
Are you prohibited from applying to be on a qualified suppliers list?
Are there problems with procedures to challenge the winning bid; do you have problems getting these procedures?
Are the contract liabilities and guarantees too costly for your company to consider competing for contracts?

US studios have a price preference for VFX work in other countries that offer government tenders in the form of rebates. Facilities based in regions of the US like California are indirectly prohibited from being on a list of potential VFX vendors because there are no film subsidies. In cases like Canada where some subsidies are exclusively given only if the company hires Canadian citizens, this prohibits non Canadian citizens from applying. Since subsidies are a part of the procedure of determining where a bid gets awarded to, this provides a barrier for US VFX companies to win bids for VFX work on films by US studios. These subsidies that are factored into foreign competing contracts are obviously too costly for US based companies to compete with.

Violation Of Trade Agreements Pertaining To Subsidies

You can also point out how these foreign subsidies violate existing international trade agreements. The US, Canada, UK, New Zealand, and Singapore are all signatory members of the World Trade Organization. The WTO has an agreement pertaining to subsidies:

WTO provides rules for the use of government subsidies and for the application of remedies to address subsidized trade that has harmful commercial effects.

All members of the WTO (offsite link) are Parties to this Agreement, which went into effect on January 1, 1995. It has no expiration date.

Any company in the United States or another WTO member country which is being commercially harmed by unfairly subsidized products from another member country can benefit from the Subsidies Agreement.

They also define what a subsidy is, I’ve added emphasis to the lines that many of the foreign subsidies fall under:

A subsidy is defined as a “financial contribution” by a government which provides a benefit. The forms that a subsidy can take include:

  • a direct transfer of funds (e.g., a grant, loan, or infusion of equity);
  • a potential transfer of funds or liabilities (e.g., a loan guarantee);
  • foregone government revenue (e.g., a tax credit); or
  • the purchase of goods, or the provision of goods or services (other than general infrastructure).

Under the Agreement, actions can only be taken against subsidies that are “specific.” A specific subsidy is one that is only given to one company, or to a special group of companies.

The special group of companies here are film studios that are offered a specific subsidy, namely tax credits for film companies.

For more in depth analysis from an actual US Trade Law professor on the issue, read Claire Wright’s 2006 paper on the matter.There is also a Film and Television Action Commitee website with a lot more information.

For specific details about every available film subsidy out there, check this out.

What Could Be A Solution?

If the US Trade Representative agrees with the finding that international film subsidies violate existing international trade agreements, they will try to settle the issue with representatives of the foreign country. One could see a situation where foreign subsidies can still exist but a duty be levied on US Studios to rebalance the subsidy. It’s similar to when you or I travel to purchase goods that are cheaper in other countries. Upon return I can be charged a duty to rebalance the trade of goods.

What About Domestic State Subsidies?

If foreign subsidies violate the WTO subsidy agreement, what about state side subsidies? Should citizens in film subsidy states like New York, New Mexico, and Florida worry about such complaints? I doubt it but that questioned is answered by US trade lawyers here which there are more answers here. No agreement exists that prevents other US states from luring US studios to do VFX work there. However there is an agreement in the WTO by most countries that prevent countries from luring US Studio work away from other countries through subsidies. The big 6 US studios are all located in Los Angeles.

It would be pretty futile for another country to go after film subsidies in other US states since most vfx companies in the US exist in California where there are no subsidies. I’d assume if they did try to eliminate subsidies in New Mexico and Florida, this would only bolster the California VFX industry.

In fact the removal of foreign subsidies would probably pave the way for foreign governments like New Zealand to invest in their own studios and produce their own films instead of servicing the big 6 US studios. VFX studios in the UK have even been quoted that they aren’t very reliant on subsidies since their work is superb. I don’t think a complaint like this is here to put any foreign companies out of business but just rebalance the industry so we have a level and competitive playing field.

Doing The Impossible

During last week’s VES Awards, Director Chris Nolan was given a Visionary Award and said the following:

I know visual effects people pride themselves on doing the impossible. I’d just like to encourage you to say no to the unreasonable.

This campaign I’m asking you to join will be derided by many as impossible. Who knows, they are probably right but would any of us have made it into the VFX industry by believing the impossible could not be done? I’m asking all of you to support these findings which state that subsidies are clearly unreasonable by filing a complaint with US trade representatives.

Soldier On.

135 Responses to Help Bring Back Lost VFX Work To The US

  1. Andreas says:

    I think the effort is admirable. I dont really know what you expect to happen though. lets assume all subsidies are declare illegal. will the big studios like that they have to pay big money in California again? they will find a way to drive down costs again and the “wrath” so to speak will be on us.The mental game for them is best quality cheap, or if in doubt just cheap. sometimes the better quality of CA based shops has to outbalance lower quality from foreign based shops. Im not sure a lawsuit will eliminate the source of the problem. It could just put up more barriers. The union movement is definitely a better communicating way than just embargoing the rest of the world. my 2 cents

  2. D says:

    You’re a freaking hero. I’m a working TD right now planning a family of my own and facing the prospect of not knowing what continent I’ll be living on in 6 months. I’ve now listened with my own ears more than a few directors say out loud they consider VFX to be as important if not more so to their films as actors and actresses.

    One note – CA does give tax incentives. Check out this recent NYT article –

    http://www.nytimes.com/2011/01/20/business/media/20incentives.html?pagewanted=all

    “And then there is California, where Jerry Brown, the newly elected Democratic governor, is confronting a $25 billion budget gap. Mr. Brown is proposing to cut social services and state employee pay while extending tax increases that were supposed to be temporary. He has also provoked howls of protest by insisting that state workers return 48,000 cellphones by June 1 in a bid to save $20 million.

    But film and television tax credits passed under his predecessor, Arnold Schwarzenegger, remain intact at a cost of $100 million a year.

    Amy Lemisch, the director of the California Film Commission, cited a report last week on the Film L.A. Web site that showed an uptick in film production in the Los Angeles area after years of decline. She attributed film crew wages of $697 million to California’s credit since it began in the 2009 fiscal year.”

    • VFX Soldier says:

      Thanks. The subsidies offered in California are for smaller productions which VFX facilities don’t benefits from (hence the reason so many have been failing according to them).

      Secondly, those subsidies are for domestic US studios. If Canada uses subsidies for its own productions that would be okay. However because Canada is using its subsidies to lure VFX work from US studios and away from US VFX facilities, this may constitute an international trade law infraction.

      • D says:

        Makes sense, thanks for clarifying.

        Curious if you have any thoughts for someone not privy to the bidding process. As a contract worker I’m not generally given details about why a show is or isn’t awarded.

        Also – would contacting a congressman help?

      • VFX Soldier says:

        @D Contacting a congressperson would be great I’ve tried by never really got a response.

        You may not be privy to the business process but if you work for a company that has opened a facility in another country it’s probably because of the subsidy.

        Also you can read the articles I linked to that show US Studio producers admitting that they choose the work overseas because of the subsidies.

  3. N says:

    Despite the subsidy rules detailed in the WTO docs, they are widely common in most countries.

    A couple million a year for vfx firms is far below the radar compared to the hundreds of billions going into subsidizing farming, manufacturing and forestry in the US/Canada and their trading partners.

    Subsidies will remain a part of the game until taxpayers footing the bill cry foul.

  4. Susan says:

    You need to focus on easing immigration in the US too.

    It’s all well and nice that you want to bring back the work, but the fact is, at the moment we can’t hire enough good people to work in the industries everywhere else.

    Say if the US does get all of the work back, the immigration policies are too restrictive to hire people that are needed to do the work. You’d have all the work in the world with no-one to do the work. Fail.

    • Shootsy says:

      Sounds like a corporate puppy, human ressources probably…

      If the doors were wide open we’d all be paid $7/h no matter where you’re from.

      Also how do you know -if- immigration policies are too restrictive?
      What’s the big deal for a US employer to petition a O-1 visa in VFX?

      A green card is 3 signatures from the employer and $5k that the employee pays to the lawyer, where’s the big deal in that?!

    • Vfxartist says:

      I disagree, susan….

      In 2002, 2003 you saw the floodgates opened, under the story that not enough domestic artist could be found. Whether that was true or not, what you ended up with were cheaper, hungrier, and with the work visa around their neck, indentured. While many domestic artist were building their lives, with families, mortgages, etc, in came workers that lived like college students: packed into rentals. It wasn’t their specific skillset tgat made them a better worker. It was the real world fear of deportation if they weren’t 100% obedient. They had no leaverage if they didn’t like the working conditions, like 3am dailies, long hours, working through lunch, etc. This was all fueled by their dreams to live in Hollywood, have the american dream.

      7 years later, I see many still don’t have greencards, but have staff positions. Meanwhile, many americam workers face undemployment as contract workers, or they themselves have gone overseas as foreign workers who face the same limitations as the foreign workers here.

      I once had a CG sup ask me to verify my skillset and pay since they were foreign workers looking for my job, and I think it was interpole who flagged it since the foreign worker was cheaper. So in other words, the govt did their job by verifying that there was a domestic worker with the proper skillset, revealing that the only reason that the other candidate was being solicited was because they were cheaper.

      One may say that immigrants are part of america’s history and future. They are. But look at the indian H1 visas…. They gutted the tech and aerospace industry, displacing higher earning american workers with cheaper foreign workers with similar employment limitations as the above mentioned foreign vfx artist. You could also say thats just capitolism. Well what you ended up with was a lot if the smaller local business closing while large malls came in. So instead of a community if local professionals and small business owners in a self sustaining cycle, you have Best Buy, Target, walmart, etc. Businesses that can be run by people with no college education as clerks. A neighborhood transformed.

      Its not about being anti-immigrant. Its about being against transforming a workforce that ends up with less options and less oppotunity and less prosperity; engineered as such.

  5. blah says:

    It’s an interesting turn you’ve taken here. At first you were for protecting all vfx artists. Now it feels like you’re only out for the interests of US artists and industries.

    Just remember it’s not the right of US artists to own all of the vfx work.

    Pick your side carefully as you’ll cause a great divide the way you’re going.

    • VFX Soldier says:

      I absolutely agree. What I am protecting is not US artists, I’m protecting the agreement that was made between various countries through the WTO which made globalization possible.

      I’m all for work going to other countries because its cheaper, or the talent is there.

      However, we made an agreement not to allow government to subsidize and artificial the price. The irony here is that the US has been petitioned many times by other countries about subsidies and have lost. Thats fair.

      • blah says:

        But the result of your protection is for the benefit of US artists only.

        I read your blog with the impression that you were out for the little guy. For all VFX artists.

        You’ve turned in a direction that is against anyone not working in the US. It’s not the right of the US to have the US based work exclusively. You’re crossing a line that will upset many,many people.

      • VFX Soldier says:

        where did I say its the right of US artists to have vfx work done here exclusively?

        The irony of the accusation of protectionism here shouldn’t be directed at me. I’ve clearly been against subsidies in other countries AND the US.

        Have you seen how many articles I’ve written against subsidies in other states and how useless they are?

  6. turncoat says:

    Seconding what “blah” said. You’ve just lost the support of most, if not all of the VFX artists in Vancouver who previously were looking up to your work and your blog.

    • VFX Soldier says:

      I’ve reported on fairness for vfx artists and preventing illegal acts from occuring against them.

      In the US, many artists are losing jobs not because its cheaper to go overseas, but because the studios want to take advantage of subsidies offered by foreign governments.

      This is clearly a violation of trade agreements all of our countries agreed to. Our countries signed an agreement with rules. Let’s abide by them. It’s silly to turn on me for pointing out the rules.

    • Shootsy says:

      What do you guys want, some kind of internationalist trotskyist vfx union?!
      You want more cash in Vancouver then fight with the people there!

      • X says:

        Sounds like there are a lot of overseas employees bitter about the proposal of U.S. workers trying to fight for a sustainable VFX industry.

  7. Philippe says:

    I can’t help but think that you are ignoring the fact that vfx is a global industry now. US companies are not the only game in town any more.
    Tax breaks certainly have an influence in the global picture, but the studios wouldn’t go abroad if they couldn’t get at least the same quality for their money. They don’t farm out roto to New Zealand, UK and Canada. No, they send the juicy stuff, because the competence exists in these countries.
    I understand how you feel, but I think the only answer is to adapt. And the best way is to raise the bar in terms of quality. Quality is not cheap, and the Studios are willing to pay for it.

    • VFX Soldier says:

      I feel what you are saying. It’s all about talent however it seems the producers disagree.

      Case in point Avatar. The producers were asked if the reason they made the film in NZ was because of the talent, scenery etc.

      The producer said it was because of the subsidy.

  8. Kevin says:

    I was with this blog until this post. While I feel bad for the studios in California being forced to close, I don’t think cutting off subsidies is going to do any good at all. All this is going to happen is US companies will no longer even be able to benefit from satellite studios and be forced to close all together. Just because the subsidies dry up doesn’t mean producers will start paying more for VFX work and the industry will suddenly become profitable. No, all the work will go to Canada, Singapore, wherever, where it is cheaper. The problem is the low bidding and undercutting that is killing the California VFX industry, not the foreign subsidies. Subsidies only make it so that California studios don’t have to close their doors completely.

    • VFX Soldier says:

      “No, all the work will go to Canada, Singapore, wherever, where it is cheaper.”

      You are saying that is what will happen if the subsidies are eliminated, however that scenario is happening now and it is because of the subsidies.

      • Kevin says:

        The subsidies are not going to go away just because the US studios can’t take advantage of them anymore. You will just be removing them from US companies to benefit from. You are assuming every vfx company is of California origin and that is not the case at all.

      • VFX Soldier says:

        first off the subsidies would not be removed for anyone. The countries can keep the subsidies. The studios that take advantage of the subsidy would pay a countervailing duty to balance out the market.

        I think you are mistaken on how the subsidies work,

        The US producer asks imageworks to do as much vfx work in Vancouver so they can claim a rebate that the government pays. The same happens if that same US producer hires a local Vancouver facility to do vfx work.

        If the subsidies were to be removed, it would just be for US producers (not the facilities.) who claim the rebate. Remember, the facilities dont recieve this money. They go overseas so the client can claim the rebate.

      • vfxguy says:

        In this situation though surely the studios will just use creative accounting to get around paying the countervailing taxes?

        Even if they didn’t do that I don’t think this would work the way you want in the long run. As others have pointed out, studios aren’t just going to start paying more for their shots. If all the work has to go through California then either artist rates will have to drop, or facilities will outsource the work to their own overseas bases in cheap labor countries.

  9. Susan says:

    The producer on Avatar also said that after effects played a vital and massive role in the creation of Avatar. Believe what you will. If you believe that Avatar could have been done anywhere else but weta, you’d have to be kidding yourself. The resources and talented people working there are amazing.

    You’re really barking up the wrong tree now. Subsidies might be one of the causes but there are many many other factors. Factors which you choose to ignore or are completely oblivious of.

    Americans got lazy while the rest of the world caught up. You really had the right idea when you stuck to the small topics, you write well and you should stick to them. With the big ones your inexperience in matters really shows.

    Please, if you’re going to start being a martyr and representing us, reveal who your are. Put your reputation on the line. If it’s good enough you’ll have no problems convincing us you’re in the right direction. Otherwise please stick to the small stuff.

    • VFX Soldier says:

      “Americans got lazy while the rest”

      Well I dunno about that I mean alot of Avatar was done by a talented group of artists from the UK, Canada, AND the US. The studio producers argue that vfx is commoditized and that any facility can do the work so their governments better chip in and help pay to prop up the vfx industry.

      You and I agree that this is not true but you know what I say? Prove it studio producers! You think you can do avatar elsewhere because of some subsidy? prove it.

      • Someone says:

        Um, no. Weta did about 95% of the work on Avatar. ILM did 4% and some other people did the rest. That 1% might seem like ‘a lot’, but at the end of the day it was only 1%.

      • Mike says:

        Don’t forget the stages in L.A. were filled with hundreds, if not thousands of crew members, (of course the live action crew were probably union) for 2 or 3 years. Many vfx artists worked gruelling hours, only to be relegated to their next gig at a game company or 3d conversion gig. Let’s not forget the contribution American companies, albeit with many Canadian animators and computer programmers from all over the world, added to Jurassic Park, T2, Spiderman, Alice in Wonderland, etc. Also, please remember WETA digital was initially created from ILM expatriates.

    • Vfxartist says:

      Susan wrote:

      “Americans got lazy while the rest of the world caught up. You really had the right idea when you stuck to the small topics, you write well and you should stick to them. With the big ones your inexperience in matters really shows.

      Such blanket statements discredits your posts. But it win’t stop websites like this, or people posting abuses and injustices, anonymnous or not. It just galvinizes their resolve.

  10. Susan says:

    Sorry, i’m talking about some of the industry in the US.

    Like I said…

    “Please, if you’re going to start being a martyr and representing us, reveal who your are. Put your reputation on the line. If it’s good enough you’ll have no problems convincing us you’re in the right direction. Otherwise please stick to the small stuff.”

    Reveal who you are. It might improve your credibility.

    • N says:

      Wow Susan, chomping at the bit for his identity

      How about you share first? Name? Address? Employer?

      Whether he’s posting his views on problems with government subsidies or movie reviews, you don’t need his name to give your input on the issues. Sounds more like you’re trying to start a witch-hunt.

  11. Ymir says:

    The one thing that no one seems to be pointing out is:
    California = Expensive.
    Expensive taxes. Expensive cost of living. Expensive real estate. Expensive rents. Expensive business overheads. California is a victim of its own prior successes. I was a part of the bygone motion control/optical days when the talent pool was much smaller. Everyone freelanced or was contracted. We are moving back to that model again. The successful effects artist is the one who is going to be the most flexible at working in this new paradigm.
    Companies are going to look for the most economical way of doing business, whether that’s a studio looking for tax incentives or a vfx house either opening a branch or relocating to a location where they can afford to keep their doors open. The successful artist will find a way to be able to make this pattern work for them, and work within it.
    Like the Native Americans, you can migrate and follow the food, or you can sit on the mountain and freeze and starve waiting for the food to come back next Spring.
    There are many other more affordable places to live and work in the U.S. than expensive California. The vfx houses are starting to recognize this.

    • VFX Soldier says:

      Facility owners here in California would argue that their bids for work are competitive, however the subsidy clearly throws the advantage behind the bid that has the government rebate.

      Even if a company overseas were more expensive than a California vfx facility bid, the US studio producer is inclined to go overseas simply because the rebate would make it significantly cheaper.

      That has forced California facilities to underbid so they can reflect those rebates in their bids to be competitive. Don’t we all agree that what is causing the toxic business model in vfx is the gross underbidding of contracts? This needs to stop and this is the way.

      Again, I understand the emotion and the passion, but its clear this is a trade violation.

      • Susan says:

        I still don’t agree with you. You’re pushing your own US agenda now and it’s gone in a total different direction from where you started. You’re pushing to take away work from people that have supported you.

        Again, If you’re worth your salt, reveal who you are. For all we know you’re some bitter guy who can’t get work because you don’t cut the mustard.

        What do you have to hide if you’re pushing for people to get work in the US? At the moment I have no respect for you and i’m a little bitter that you’re claiming to represent and “soldier on” for everyone.

        I can’t agree with someone who changes their agenda and direction unexpectedly. We’re only just beginning to find out what you’re for.

        So. Going to ignore this reply again?

      • VFX Soldier says:

        In 1995 the US and other countries agreed to join the World Trade Organization.

        The agreement eliminated domestic tariffs on imports allowing the liberalization of global trade.

        This is great for everyone.

        Conversely, by joining the WTO they also agreed to eliminates foreign subsidies that were adverse for domestic markets.

        The subsidies granted by foreign governments to lure vfx work away from US vfx facilities violates that agreement. As they continue, they force companies out of business.

        Again I understand the emotion but my identity really isnt an issue here.

    • vfxPeon says:

      what’s wrong with people in california wanting to keep their jobs?

      • Susan says:

        Nothing at all. But it alienates everyone else and creates a divide if you start pushing a US based agenda. If that’s what this site is about go ahead and state it.

        As for the subsidies, they aren’t the core of the issues. They are one of them. If the subsidies were reversed in the next 5 years,

        It doesn’t fix the problems with cost of living, stupidly high salaries (compared to elsewhere) taxes and business overheads that were previously mentioned. It doesn’t fix the prohibitive immigration policies of the US. How can you hire someone you can’t get a visa for?

        Also….

        Still dodging the questions about revealing yourself, Soldier? What do you have to hide? How can we have someone making noise in the industry for us if we don’t know who they are? How can we trust you?

        Like I said, for all we know you’re some bitter person who hasn’t realized they don’t cut the mustard.

      • VFX Soldier says:

        If a vfx facility anywhere in the world can compete on price and talent I’m all for it.

        That’s not a US based agenda, that’s the free trade agenda you and I all subscribe to.

        However, we have some agreements that go with that free trade agenda, namedly subsidies.

        Regardless of opinions, would you do agree that these subsidies violate WTO agreements?

        Id like to hear peoples opinions based in fact as to how they are not.

      • vfxPeon says:

        @Susan

        Does Vancouver, Toronto or London have a low cost of living or low cost of doing business? Hell no!

        Most of the jobs there wouldn’t even exist without the subsidies and the people who run those companies will admit that.

  12. Ymir says:

    There is nothing wrong with people in California wanting to keep their jobs. I lived in California for 21 years.
    What is wrong with businesses wanting to be able to operate in an economic climate that is conducive to staying in business? Companies in all industries are fleeing California because the environment there is not healthy for keeping a business running with a small profit margin. Orphanage, CafeFX, and Asylum are casualties of that environment. My point is, as companies explore other options to stay in business, the successful artist is going to adapt to that climate, or look for another trade.

  13. Hi everyone,

    If your freeking out about Canada’s tax incentives, Singapore is at 50%.

    http://www.entertainmentpartners.com/Content/ProductionIncentives/Jurisdictions/charts.aspx?jid=92

    +

    Benoit Martel
    http://www.talkmgmt.com

  14. Anon says:

    Still dodging the question about who you are….

  15. Anon says:

    @Susan

    Although I don’t agree with VFX Soldier on his views of subsidies, since the start of his website he has always had this point of view. Maybe you just haven’t seen the posts, but he definitely hasn’t changed his agenda.

    Also, I very much disagree that he should disclose who he is. Unless you’d like him to be blacklisted from the entire industry (but that’s a different point altogether).

  16. Scott Ross says:

    I have so much to say… but my typing skills are terrible. I would love to have a phone conversation that could be a podcast…. it could be very informative. Maybe we could pull out the Darth Vader vocorder and disguise the VFX soldiers real identity!

    • VFX Soldier says:

      Would love to hear your opinion on this!

      • Scott Ross says:

        let’s do a podcast then….you can sit at your house in a dark room with a soft circle wipe over your face and process your voice thru a vocorder…I get why you need to remain anonymous…. and fortunately I do not…. so, lets do this.

        I would love to offer my two cents… I believe I have a unique perspective, and a unique position from which to speak. Being the only person in our industry that has “successfully” run 2 of the 5 big EFX houses, not being affiliated with any unions or honorary organizations, not being employed by nor do I depend on any income from the VFX industry… I can freely speak my mind without fear of retribution. My interest is to help this industry stay alive. Period.

      • VFX Soldier says:

        no can do on the podcast. Sorry.

      • Scott Ross says:

        Let me first applaud VFX soldier for addressing difficult issues in these difficult times.

        While the title of this thread is Help Bring Back Lost VFX Work to the US…. and I clearly can see why this appears to be the issue…the real question should be… Why is the VFX Industry in the State that it Is?, and why are the studios making so much money whilst the VFX studios are closing left and right?

        As I read through this thread, the unfortunate take away is that VFX artists are becoming more and more xenophobic. The truth is plain, we live in a globalized economy, the days of isolationism should be well behind us. And while there are governments that seem to be unfairly changing the rules of fair play and commerce ( this has been happening for decades), the concern should be why are the studios getting so rich whilst the VFX community ( VFX being the very reason why audiences are clambering to the movies) is suffering? I firmly believe that if VFX facilities were healthy and profitable, many of the industry’s concerns would vanish.

        I implore you to focus on the root cause, VFX studios are drowning… there are NO margins and NO room for errors.

        Yes, there are issues with subsidies and non portable benefits and long work hours and the like. But, if the root issue was resolved, the other issues, while still challenging, would become much easier to address.

        It saddens me to see that VFX artists around the globe are now bickering amongst themselves and pointing fingers based upon their native tongue or the country they hail from. Great VFX are done by people of all races, creeds and colors. And the VFX community needs to realize that we, the VFX community are not the enemy. That the VFX community needs to become a community that takes care of each other. Remember in unity there is strength.

        I’m old enough to remember when the studio system fell apart and the motion picture studios no longer had actors and directors under contract. Once that happened, actors started getting paid in a very different way. The age of the powerful talent agencies ensured that the star talent, the talent that used to drive box office, were paid well. Well, those days are over. Stars no longer drive box office, VFX does. The star talent of today’s films… visual effects…. and the VFX facilities, the big 10 drive most of the box office and employ the lions share of VFX artists.

        Yet the studios are still smarting ( and for some reason operating under the old paradigm that stars still make THE difference in successful films) from the days of Michael Ovitz. The CAA’s and the WME’s are as powerful as ever. The studios have learned their lesson and do not want to create another star system and I believe that they are strategically doing what they can to ensure that never happens again. After all, they are running businesses, profitable businesses, and they are acting in a strategic way to ensure that their businesses grow and become more and more profitable.

        The VFX industry, unfortunately does NOT operate as a business. It is a quasi art/technical hobby, but most definitely not a business. Which, to me, is shocking… since it is the driving revenue force behind the multi billion dollar movie business. This is easy to see. The VFX industry has an honorary organization (VES) that celebrates the art and science of visual effects but it does not have a business organization to keep the industry alive. While I’m all for celebrating the likes of Messrs. Dunn and Harryhausen, if you don’t have jobs, can’t make a living, are unfairly treated, lose your families…I for one find it difficult to see how the industry stays alive long enough to honor the likes of Messrs. Muren, Ralston, etc.

        Two weeks ago, I sent out several emails (with multiple follow ups) to the owners of the top 10 VFX companies in the world, asking them to consider the possibilities of funding and forming an international trade association. To date, I have received but a few responses.

        Desperate times calls for courageous actions. I understand that it’s easy for me to take this stand as I have nothing to lose in doing so. I do not have any skin in the game except for my 30 years in the business and a deep passion for an industry that was so much a part of my life. I can understand the hesitation of multi million dollar companies that employ thousands, the men and women that run them and their fear and hesitation of rocking the boat. BUT, if the gestalt is not changed, if the leaders of this industry do not stand up in unison and change the course of events, then VFX will have a very bleak future indeed.

        Thanks.
        S

    • Vfxartist says:

      Sorry Mr. Ross. These issues affect hard working artist who face very few prospects for prosperity, esecially as they enter their more senior years, like 40. Yet vfx films are still on the rise and are high earners. Instead of making light of posting here because of typing skills in leiu of pod casting, how about contributing to the debate. I really doubt any sort of typing skills limitations will impair your contribution. Sometimes having the ability to collect one’s thoughts in an organized written form is easier for some than the spontanaety of a podcast.

      • Scott Ross says:

        @Vfxartist.. not sure what you are trying to get at… I was hoping to do a podcast because I don’t type very well, and thought that we could cover a lot more ground in a podcast than in a written response. Once I was told by VFX soldier that a podcast was a no go, I tried my best to “talk” about the issues that I see facing the industry. For me the spontaneity of a podcast is far more effective than my written thoughts.. I am sorry that you felt that I was “making light” of the issues facing artists and the industry… actually, exactly the opposite…. and why would you think I was making light? As to contributing to the debate…. please read my post… Thanks….

  17. mananama says:

    The crack was already there, subsidies just made it larger. Productions were shooting and to a lesser extent posting in Canada and elsewhere long before the current subsidies existed, why?. Because it was cheaper? How? Lower production costs coupled with a favourable exchange rate, the very same reasons most US labour intensive manufacturing has already moved overseas.

    The only reason this has not happened sooner is that it took time for the technology to catch up. As an industry based on ones and zeroes, there is no particular reason, other than tradition, for vfx shops to be located in California. Once the studios realised this it was game over.

    As a business owner you are going to go where running your business is cheaper and right now that is everywhere except California. You might retain a headquarters in LA but all the work is going to get done elsewhere, a model that is replicated in every other labour intensive industry in the US. If you want a free market economy Soldier, then here you go, this is how it works.

    The industry has provided a comfortable living for most, sure there are shops that pay a pittance, overwork their employees or lack insurance coverage but ‘starving vfx artists’ we are not, we are a bright bunch. So when the work goes overseas all you can really do is either join the herds leaving or re-skill and relaunch your career, because I can tell you one thing Soldier, the work ain’t coming back.

    • VFX Soldier says:

      Funny you refer to subsidies as crack because both are illegal! (rimshot) okay bad joke.

      But seriously, many subsidies existed before American films started to be produced in various countries.

      Canada started their subsidy program way back in 1970. New Zealand started theirs before weta even started.

  18. Lived It says:

    Great article, Soldier. I’m currently working at a major LA VFX house, and the owner has openly talked about opening a satellite studio in Vancouver because the subsidies are so huge, and because they are losing projects to London and Canada and Singapore because of those subsidies. As he pointed out, the workforce is no cheaper in those places, and the exchange rates are no longer the issue – it’s the subsidies.

    I also have plenty of well-paid friends who have been taking jobs in Canada and London and Singapore because they can’t find work that pays as well as the jobs they get in those places. Essentially the taxpayers in those countries are subsidizing those studios to fly Americans over to earn their money, then bring that money back to LA.

    The ironic thing is, apparently the studios who contract for the work with the VFX houses factor in the subsidies. The owner stated that if this company did open a Canadian satellite studio, they would have to lower their bids by 35%, because that’s what the studios would expect. This would mean running the new branch of the company in the red. It’s a stupid game that takes tax money from other countries and puts it in the pockets of major Hollywood studios, and meanwhile we (the individual artists) either chase around like global gypsies, or try to live in one place and quit the business. Meanwhile, the people running the studios, whether they’re getting subsides or not, are being played like chumps, and if they don’t play along, they’re out of business.

    The funny thing about the way everyone is attacking Soldier for his supposed bias is that all these countries are doing the same thing to each other that they’re doing to the US. The US has just been less willing to play the game. If Canada stopped its subsidies, see have long it would take for that work to go to, say, London. Then all the Canadians would be crying foul. Or reverse it, have the Brits end their subsidies, and see how long it takes for their work to dry up. And when that happens, let’s see them complain about some unfair bias on this website.

    Wake up, people. We’re all pawns in a rigged game. Don’t dump on the guy who is pointing out that fact.

    • VFX Soldier says:

      Does the owner have knowledge that these subsidies are trade violations? Is he/she interested in taking up a complaint to the US Trade Rep? It seems the process is straightforward and has helped other industries including the papermill and aircraft industry.

      • Ymir says:

        Soldier, just for clarification sake, would you provide the discussion with a list of those countries using illegal subsidies vs. those using legal subsidies and those just using favorable tax incentives? As far as I know, none of the other states in the U.S. are using subsidies to attract the work, but favorable tax incentives of some form or the other. Do you disagree with the practice of tax breaks or incentives to attract economic activity? I don’t mean any of this to read in an accusatory way, just that you mention subsidies over and over, but not all of the non-California locations use subsidies.

      • VFX Soldier says:

        *would you provide the discussion with a list of those countries using illegal subsidies vs. those using legal subsidies and those just using favorable tax incentives?*

        Having a subsidy is not illegal, It’s how the subsidy is used, and remember I’m not a lawyer but according to the trade law experts I cited, if it’s used for a domestic production then its okay, if it’s used to lure a production from another country then thats not okay.

        So for example the film called Passchendaele which was produced by Canadian studios and probably subsidized by the government is WTO compliant since there was no international trade that took place.

        However, a film like Batman Begins which was produced by one of the big 6 American studios and probably received foreign subsidies is probably not complying on WTO rules. If an American vfx company bidded on the project and Warner Bros. chose to pursue the vfx in another country to receive a government subsidy then according to the WTO agreement that would be a violation.

        I think you might be confused when the terminology “tax incentives”, “tax breaks”, and “subsidies” are used for films. When I worked for a vfx facility that lost a project because of tax incentives, I thought it was because California’s taxes were too high. The irony is vfx facilities in California pay almost no taxes because they don’t generate substantial profits.

        So what are we talking about then? What we are talking about is when a government uses taxpayer funds to pay producers to do film work in their state or country. So if I intend to do $1 million of vfx work in Los Angeles, the state of New Mexico will offer me $250,000 (25%) to do the work there.

        So when appropriately defined I’m against that. I know a lot of people are accusing me of being racist but as one commenter pointed out, if you read my blog from the start, I’ve railed against the film subsidies offered in various states and I’m against them here in California – they artificialize the price of vfx.

        Now that doesn’t mean I’m against all subsidies. A subsidy for education or health insurance is great.

        Pertaining to tax breaks which is traditionally known as lower income taxes or lower sales taxes, thats fine too.

      • Ymir says:

        I should state that, in principle, I agree with you on a number of things. But (there’s always a but) I think your position is not very strong. I’m American, working in America. And as an American (just as any national citizen) would like to see the best for my country and it’s citizens. Yes, it would be nice if American owned and operated companies stayed in America and hired Americans. I’m sure Canadians, Britons, et. al. feel the same way about businesses based in their countries, as well. But if that were the model, there would be no Americans working for Sony Imageworks. And all 20th Century FOX productions would be staffed by Australians.
        Where I think (IMO, I’m not a lawyer, either) that you’re assertion against subsidies weakens is: “Any company in the United States or another WTO member country which is being commercially harmed by unfairly subsidized products from another member country can benefit from the Subsidies Agreement.” What is “unfair”? There’s nothing holding America or California back from offering similar subsidies. They just choose not to do so.
        It is not like this subsidizing is happening behind closed doors, under the table. The fact that we all are having this discussion is because of the two articles in the L.A. Times and The Hollywood Reporter. I would think if there was something illegal going on, one of these institutions would have jumped on that story, or a reader with some international law background would have brought it up. Otherwise, you should get all your arguments laid out, run them past a lawyer who specialized in international trade law, and contact the LAT or THR with this aspect of the story. Or even write a piece for Drudge or HuffPo. Imagine the headlines: “Hollywood Studios Knowingly and Openly Violate International Trade Laws”.

    • Vfxartist says:

      “lived it” wrote:

      “The ironic thing is, apparently the studios who contract for the work with the VFX houses factor in the subsidies. The owner stated that if this company did open a Canadian satellite studio, they would have to lower their bids by 35%, because that’s what the studios would expect. This would mean running the new branch of the company in the red. It’s a stupid game that takes tax money from other countries and puts it in the pockets of major Hollywood studios, and meanwhile we (the individual artists) either chase around like global gypsies, or try to live in one place and quit the business. Meanwhile, the people running the studios, whether they’re getting subsides or not, are being played like chumps, and if they don’t play along, they’re out of business.”

      You nailed it. This is why Im against subsidies. Its citizen paycheck recycling in the form of taxes that pay the company that paid the employee.

  19. Canuck says:

    I actually think it’s ironic and slightly hilarious that people still assume the best work is always/exclusively done in California and that studios farm it out elsewhere at the detriment of quality. Hubris. Arrogance. I understand the frustration, it sucks when a global meritocracy takes precedence over inherited entitlement. Suck it up, get better at your jobs and be willing to move. That’s the nature of the industry now.

    • VFX Soldier says:

      Where did I say that?

      • Canuck says:

        Actually in reference to a previous comment… sorry, should have been more clear. Generally I agree with a lot of what you say on this site. The industry does need a major rebuild. I don’t like working crazy hours with no benefits but on the other hand I have to remember that I am choosing to do this.

        I think it’s insane that people that cater the sets on films get more recognition sometimes than vfx artists do in terms of credits at the end of the films. I feel like we’re invisible, like good fx, and so much of the creativity involved with our passionate commitment to our roles on these films is lost to the egos and names that have better representation than we do.

        I’m divided on the whole union thing because other roles in the film industry, aside from actors I guess, have said unions just force you to pay dues and don’t really give you anything back.

        I suppose if we wanted to buy into the celebrity aspect of the film culture that gives actors such great power and dividends we would have to start marketing ourselves as ‘auteurs’ of vfx.

        Labour unrest in the vfx industry is a natural manifestation of a fragile economy. A govt. only has so much money, if it wants to spend that on subsidies to stimulate possible industries within it’s borders it’s probably better than wasting it all on wars for oil. The bigger problem might be finding alternative energy… it’s all linked.

      • VFX Soldier says:

        I agree however the union dues would bring you benefits. By the way congratulations, this is my 1000th comment on my blog! No prize or anything. I don’t do subsidies.

    • eggnoggerino says:

      Canuck, where did you get the idea that Californian vfx artists inherited their entitlement? They created the industry with hard work.

      It’s easy to say “suck it up and be willing to move” – do you have a family?

      We all should be on the same side on this issue.

      This is just the beginning – in a few years, almost all of our jobs will be off-shored not to subsidized Canada, New Zealand or any other country that pays decent wages, but into real low wage countries.

      There are already a lot of ‘western’ artists training people in China and India. Once the know-how is transferred, nothing will keep the studios from giving the lion share of the work to sweat shops in those countries.

      There might be some small “R&D studios” left in the traditional cg producing places, that are working out the pipelines and come up with the new techniques, but no studio will pay western wages for a lighter, texture artist or similar anymore – not even in Canada.

      So get off your high horse. Your job is endangered too – even though you’re willing to travel. You can suck it up all you want – it might not keep you from ending up in Bangalore, like Dreamworks Dedicated Unit, or wherever, training digital sweat shop workers, getting discarded after you’ve become obsolete.

    • Vfxartist says:

      I agree, canuck, that being in CA doesn’t make you a better vfx artist. High tech skills can go anywhere in the planet, especially today. I think what will survive in CA in vfx will be in the form of local businesses serving a local clientele that needs immediacy. Like post production in NY in the 80’s and 90’s. If you weren’t located in midtown, near madison ave, no matter how good you were, your biz suffered. Meanwhile thr factory fx houses will disappear. What I desire is what business does sray here remain healthy, sustainable, and have as its asset the high tech service it provides. Not its ability to outbid some house across the globe. That will never be a viable selling point. If I’m wrong, then I should be able to get a $10 haircut in beverly hills.

  20. Canuck says:

    Or if a govt. wants to waste all it’s money on bailing out sociopathic money predators that later enter it’s fold then that’s another matter altogether: http://www.imdb.com/title/tt1645089/

  21. Anon says:

    We’re talking about removing US subsidies here too right?

  22. maple leaf ehh says:

    As an artist that works in Vancouver, I do understand your frustration because although I’m employed now, will I be employed in Vancouver in 3-5 years? People on this form have to realize that the real problem are the exec’s that are pocketing the saving of doing business in another country due to subsidies. At the moment I have no problem working in another country, but I definitely don’t want to be moving around every 6 months when I have a family. Whats happening in California could also happen in Vancouver in a few years.

  23. T says:

    I’ve read through all the comments and one concern I have is how many peoples’ answer to all of this is to just move where the work is.

    It’s just another clear example of how much help the industry needs. Do that many people truly believe a vfx artist should have to give up their career and passion in order to settle down, own a home and raise a family? How is that supposed to happen if we are expected to move all over the world just to find work?

    VFXSoldier is doing good work here. He is enlightening the world, not just California, to the wrong doings and problems of the industry. Awareness is a key factor into helping the entire global industry.

    • Ymir says:

      So who says where these jobs should be? What if I don’t want to move back to California just so the artists who bought houses can have an easy commute?
      One doesn’t necessarily have to move. There are corporate apartments and long-term/extended stay hotel rooms. This arrangement allows the vfx artist to keep a home base wherever they wish. If you can afford to live in California, more power to you. But it is nice to have the option to live during the ‘down times’ in a more affordable part of the country and travel to California, New Mexico, Louisiana, Florida, etc. to work. Many types of jobs actually require travel. Take the military for example. At least in vfx, unless you don’t make your deadline, no one is shooting at you. Imagine you are on the live action crew for a James Bond film. You would be away from home for a large portion of the shoot.
      Everyone’s situation is going to be different. This model has worked for me pretty well recently. I’m staying employed pretty regularly while many of my California friends are complaining about the jobs leaving.

      • T says:

        Everyone is different but “just moving” is not the answer. You don’t have to move back to California and if you enjoy moving from city to city more power to you. Some people enjoy that lifestyle.

        The difference is these other traveling jobs is a single steady job, whether it’s a business man or the military. They have one employer and that employer gives them benefits and a steady paycheck. You can easily have a home base with those jobs.

        With VFX it’s more of a challenge. You never know if you will have a job but it would be nice to put up roots somewhere and not go bankrupt in the process if no jobs come in. You shouldn’t have to pick up everything including your family and move to another country or leave your family behind and go work in another country.

        And you can imagine if you had a family and/or house in California right now, you’d want some more jobs to stay there so you can be near them. And this is the case for anyone in any city.

        Like you said everyone’s situation is different. I just think the answer to losing vfx work is more complex than just traveling around the world chasing it.

      • X says:

        Exactly T, What we need, is the choice to stay put if we want to and the opportunities to do so without the fear of having to find a new career.

      • T says:

        Exactly, summed up nicely X.

      • Ymir says:

        Certainly, moving around is not an ideal situation for anyone, but it’s the environment we’re currently working with, and it doesn’t show an iota of a chance of changing anytime in the near future. Those who embrace a Darwinian approach to their careers stand a better chance of actually having careers. Those who sit steadfast and wait for the mountain to come to them will most likely experience longer periods between jobs. You have to be proactive in figuring out how to make the environment work best for your situation and to what degree you are willing to make which sacrifices for your chosen career.

    • vfxPeon says:

      I like Ymir’s reasoning….Hey, the military has to leave all their family and friends behind and work under shitty conditions halfway across the globe, why shouldn’t it be the same for vfx?!!

  24. GotOut3YearsAgo says:

    I’m a little late to this party, but it seems there are a lot of people defending what amounts to flat-out economic warfare.

    If you need your government to buy your jobs for you, there’s something wrong with you.

  25. fzz says:

    Even if the subsidies are removed the Cali VFX industry will still have to become more competitive to bring the work back. As far as it goes in the UK it’s not the VFX studios that are subsidised it’s the movie producers. The UK studios have to match – and most often beat – US prices. Take away the subsidy and all you remove is the preference to place the work in the US. The US studios will still have to beat all comers on a straight price comparison.

    • VFX Soldier says:

      This is exactly what I’ve been saying. The AMERICAN STUDIOS get the subsidy money! Not the facilities. This keeps getting missed.

      All the facilities worldwide still have to compete on price regardless.

  26. Boz says:

    I find it hilarious that those outside the U.S. feel they are entitled to benefit from their country’s tax breaks (as in more VFX work comes their way), but those of us in the country and state where most of those projects are funded should “suck it up”. If foreign countries workers are as good as they say they are, then jobs would continue to flow their way even without the benefits of tax breaks. VFX Soldier isn’t saying we deserve special treatment in the U.S. He’s simply saying let’s level the playing field. No tax breaks for anyone. And I couldn’t agree more.

  27. Mike says:

    One point I’ve wanted to emphasize is many companies, such as ILM or WETA lay off their better, more experienced workers, in favor of the talent of the moment, and live to regret it, as the ex-employees go on to oscar and better condition rewards.

  28. Al Bundy says:

    People need to keep in mind that when we are talking about competing with the UK for shows, California is not just up against tax breaks and subsidies, but also far lower wages and NO paid overtime.

    A senior level compositor will top out at about 240 GBP per day, no overtime. That’s roughly $380 per day, compared to $550 per 10 hour day in the United States (plus OT beyond 10 hours).

    Artists in London are expected to work 2-4 hours a day without additional compensation or complaining. If you complain, you are out and may be out at every shop. The big four are all located within a few blocks of each other in Soho and they do talk to each other.

    • fzz says:

      Yes it’s true – the UK is clearly a slave economy. Or maybe the US just priced itself out of the market?

      btw: £240 a day is rather low for a senior comp. Sounds like you got dicked.

      • cubicle says:

        £240 a day?! I work in Soho for one of the biggest and I’d be happy if I made half of that. Sure I’m not a senior but I have a few years experience and I do work at least 10 hours a day and often 6 days a week.

        I get way less than £100 a day…

      • yo says:

        less than 100 a day?
        sounds like you started at a big company, and stayed there for a while.
        you need to move around to get your rate up.

      • Marcus says:

        holy cow! Assuming you do have the whole “I work in VFX because it is cool”-thing out of your system after years of work… what in the world are you doing? Stop doing your company a favor they didn’t even ask for by working for a rate like that. You can probably work at McDonalds and make the same kind of money, but with a lot less stress. Oh, and the benefits might be better.

        I mean, seriously!

      • Al Bundy says:

        Senior compers used to get 300 GPB a day in London, but over the last two years they have driven it down to 240-265 GBP a day, no overtime. You may still be able to get 300 for commercials.

        Either way it’s way less than people get paid in the US.

      • Vfxartist says:

        Nope, london IS a slave economy. Free labor = slave, even if its just two hours out of the day.

  29. blah says:

    2-4 hours a day extra sounds like you’re getting dicked too.

    Never had to do that

  30. blah says:

    i’m trying to find out where subsidies refer to anything BUT import and Agriculture? Not sure how the wto agreement relates to vfx…

    http://www.wto.org/english/thewto_e/whatis_e/tif_e/agrm8_e.htm

  31. yo says:

    @Scott Ross

    Could it be that the big 10 studios are actually thinking like businesses already?
    It seems to me that they’re not really doing too badly.
    It’s mainly been the mid sized (mom ‘n pop) shops who have been struggling.
    Maybe the big 10 just don’t see anything in a trade organisation, because they’re all making enough money as it’s going right now?

    • Scott Ross says:

      Not sure where you’re getting your info from, but I personally and professionally think that they are not making money.

      • VFX Soldier says:

        I’ve heard about various producers and execs tell their workers openly that they have recently been “very profitable”. No hard numbers though.

      • Scott Ross says:

        Can’t really speak to all VFX companies methods but at ILM and DD, producers were not privy to company financial statements, only a select few of very senior execs.

      • Ean Carr says:

        “Can’t really speak to all VFX companies methods but at ILM and DD, producers were not privy to company financial statements, only a select few of very senior execs.”

        @Scott Ross

        Curious, why not? Why not share the financials every week with all employees à la R&H?

      • Scott Ross says:

        well… generally the financial statements of VFX companies are disasters… and if that information got out, clients might have a difficult time awarding shows to companies that look like they are on the brink of going out of business.

      • Vfxartist says:

        Mr. Ross expertly typed:

        “well… generally the financial statements of VFX companies are disasters… and if that information got out, clients might have a difficult time awarding shows to companies that look like they are on the brink of going out of business.”

        Then perhaps the vfx vendors should form a trade organization to establish a standard in business and ethics. Perhaps they should establish minimums to ensure that what they charge can cover their overhead, staff, contracted employees, equipment rental, R&D, plus enough profit so that the company can reinvest in itself and sustaun itself during the lean times.

        In addition, if a studio breaks a contractual agrrement with a vfx vendor, then all of the vendors, under the trade organization agreement, rally to go after that studio. If Disney tries to manhandle ILM or DD, then they will have to answer to all vfx vendors, instead of pitting them against each other.

        When the vendors rally together to establish minimums, they all benefit, while competing on how creative they are, not on how much bone they can cut. It establishes a wealth in the industry. From such an organization, residuals can be collectively bargained. At the same time, penalties for things like late plate deliveries, can be negotiated as a whole. This way, the vfx vendor doesn’t absorb the cost of a compressed schedule. In fact, they profit. Greatly.

      • Scott Ross says:

        @Vfxartist said

        ” Then perhaps the vfx vendors should form a trade organization to establish a standard in business and ethics.”

        I would ask that Vfxartist read my earlier post which asked that very same question… I said:

        “Two weeks ago, I sent out several emails (with multiple follow ups) to the owners of the top 10 VFX companies in the world, asking them to consider the possibilities of funding and forming an international trade association. To date, I have received but a few responses.

        Desperate times calls for courageous actions. I understand that it’s easy for me to take this stand as I have nothing to lose in doing so. I do not have any skin in the game except for my 30 years in the business and a deep passion for an industry that was so much a part of my life. I can understand the hesitation of multi million dollar companies that employ thousands, the men and women that run them and their fear and hesitation of rocking the boat. BUT, if the gestalt is not changed, if the leaders of this industry do not stand up in unison and change the course of events, then VFX will have a very bleak future indeed.”

        The hope for our industry lies in an International Trade Organization.
        s

  32. […] In my post about the legality of international studies many had diverted the debate into one about nationalism and xenophobia. If you have read my blog, you’ll know that I have railed against both state and international film subsidies for the vfx industy. It artificializes the price of vfx. […]

  33. maple leaf says:

    To cubicle,

    I really don’t understand why UK artists are ok with working more hours than what they are compensated for. I’ve heard of people working 10-16 hours with no extra compensation to meet deadlines and getting more frequent deadlines to meet. If it is that important to stay and work late, the company should be compensating the employees. If you are contracted for X months, isn’t it in your best interest not to work for free? If you dont work for free than they will pay you over time or extend your contract to finish the work.

    But of course if the senior artists are working for free what voice does someone starting out have?

    • X says:

      None.

      You have no rights, voice, friendship, guidance, understanding or respect until you have at least five years under your belt… and good luck trying to get there newbies.

      • Ymir says:

        In the old days (oh dear, here he goes again . . . ) it was referred to as ‘paying your dues’. You started as a P.A., or a runner or some other non-fx entry level position. If you were smart, you kept your eyes and ears open and your mouth shut. Maybe someone would take a liking to you and start teaching you the ropes. If you showed promise and hadn’t made any mistakes at your assigned tasks (or annoyed anyone with a know-it-all attitude) someone would take you under their wing and start giving you some minor production chores. As time went by and you didn’t screw up, you’d be promoted out the the P.A. job to a real crew position. And as you gained experience, you’d get tougher assignments and your rate would increase.
        Matte painters (back when matte paintings really used paint) started as apprentices, which meant you cleaned brushes and observed. After trust was built, you’d get to rough in a painting, finally graduating to more and more responsibility. It just seems today the entry level artists are being handed shots before they’re ready, but still expected to do the same caliber work as the seasoned artist.
        Either the new artists need to realize that they’re in that process of paying their dues, or the facilities need to stop assigning production level work to the newcomers and let them earn their wings. But expecting an entry level artists to perform in the same environment as the experienced artists for a fraction of the pay cheats everyone and can even give the artist a false sense of professionalism.

      • X says:

        I agree. Personally, I don’t expect a new artist’s to push out the same caliber work as the veterans, but unfortunately, a lot of people think they should. A lot of shops expect them to start off running with the big dogs, “earning them the right” to work in the industry if they can keep up. But I think that’s the wrong way to go about it, new artists need the opportunity to earn their wings and a stable foundation to build their industry skills upon. They are willing to work for cheap for the experience and that’s a fair trade for a while. I appreciate the few shops that still utilize apprenticeship programs in that manner.

  34. […] ILM manager and Digital Domain founder Scott Ross comments: I implore you to focus on the root cause, VFX studios are drowning… there are NO […]

  35. […] was quite a bit of noise generated from my post on international subsidies. I thought I’d bring together snippets of quotes from my blog and elsewhere that will help […]

  36. maple leaf says:

    Yes as a junior its in your best interest to try to put in a bit of extra time to get your shots done. But my point was that Seniors in the UK are consistently working more than 10 hours without being compensated OT. I’ve heard of maybe a few people that have refused to work for free and have recieved OT to continue working but a majority of artists work beyond their 10 hours to get the job done. This could be hear say but if its true, it would be great if this is brought to the forefront.

    • anon says:

      Sadly, I think in London that’s just what people accept.
      During the last couple of weeks of the project, you work unpaid overtime.
      I think what’s more worrying, is the fact that even there almost aren’t enough artists to do the work in London at the moment, it’s just that busy.
      In any other industry, that would mean that the artist’s rate would go up, not down.
      Wouldn’t be surprised if the bigger companies are keeping the rates down.

  37. […] He wrongly accuses Californian VFX artists of being too expensive as if the labor is cheap in thriving markets like the UK and NZ. What he forgets to tell you is that artists at Weta Digital, where much of the vfx work has gone, are some of the highest paid artists in the industry. One of the big reasons is because the government subsidizes their salaries to lure US studios to do the work there. Trade Law experts contend these subsidies are illegal. […]

  38. […] thought it anyone had a legitimate issue with international film subsidies, it would be the WTO which strictly prohibits the practice, but the EU? I looked up some info and indeed Tim Adler is correct. In fact the subsidies in the UK […]

  39. […] Approaching the federal government to file a petition with the World Trade Organization. […]

  40. […] This very same dynamic is the cause of the recent volatility in the VFX industry. US studios are lured to take VFX work to locales where foreign governments offer lucrative free money in the form of taxpayer rebates. I’ve argued that this is a violation of WTO trade rules. […]

  41. […] Well the problem is the UK, US, and most countries have signed to join the World Trade Organization. It’s job is to encourage free trade by eliminating tariffs and subsidies. At the same time, it also has remedies to protect domestic industries where workers are being adversely affected by …. […]

  42. convert shoe size…

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  44. Thanks , I have just been searching for information about this
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  45. mike says:

    maybe everyone should stop bitching about foreign subsidies and lobby the CA state govt or Fed Govt to offer their own subsidies. just cause CA was VFX heartland once doesnt give it the right to dictate what the world does in relation to VFX. man up California.

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