Scott Ross Speech On VFX Industry

Former ILM General Manager and Digital Domain Founder Scott Ross recently gave a speech about the VFX industry. I’ve written posts agreeing and disagreeing with Mr. Ross and this post will be no different.

VFX Trade Union

A trade association has to be put together … where there are certain rules and stipulations in the ways that (for instance) cancelation charges happen and the way people get paid,” he told The Hollywood Reporter. “There needs to be standards and practices put into effect that deals with financial considerations. Obviously there are issues of price fixing and I’m not suggesting that at all. But there are so many things that can be done in a trade association where the studios I think will sit up and take notice.”

I’m all for this. What’s killing the industry is how the vfx industry bids against other facilities for work the same way construction companies do. The difference is construction companies bid off of a blue print.

There are no blue prints when it comes to VFX and changes are made all throughout the process which can kill any kind of planning for a facility profits. Dave Rand has suggested that facilities should get rid of the bidding model and go to a cost-plus model.

A VFX Labor Union

The problem is we are looking at competing in places where there are no unions. But if (a union) increase the cost of doing business and increases cost to the facilities, who is going to bear that cost? I will tell you that the motion picture studios, in my opinion, will not. They are trying to maximize profitability.”

I disagree. I could take that exact same sentence and replace the word “union” with “trade organization” and make the same argument. Is it not prudent to believe that the trade organization will bring facilities profits by indirectly costing the studios more through standards and practices?

VFX Subsidies

(US) facility owners are looking for ways to pull their heads above water so they too are opening facilities where there are tax credits, subsidies or a lower cost of labor. … To me, doing that is swimming to the bottom.”

It’s not a fair playing field for the U.S. companies,” he said. “(Many US VFX companies) are doing everything possible to set up facilities wherever there are tax incentives and a cheap labor pool. I think they are setting themselves up for failure.”

You know where I stand on the issues of subsidies. I think things will get interesting when a big big facility goes down. The is that it’ll be enough to rattle the cages of execs at other big facilities to finally respond to Scott Ross. However we are a long way from that: Scott Ross isn’t even mentioned on Digital Domain’s website.

Do VFX Executives Have An Incentive To Change?

I have to wonder if execs at the big facilities even care because it seems there really isn’t an incentive for them to fix the problem. Some VFX execs want to make the studios as happy as possible to secure their future in a potential studio position.

In another example, take a look at Digital Domain’s executives. They’re always interesting to look at because they are trying to go public and have to realease a financial statement that includes executive pay. You can search for it here: http://www.sec.gov/edgar/searchedgar/webusers.htm

Here is executive compensation in 2007:

and here is executive severences in 2007:

Here is executive compensation in 2010:

and here is executive severence in 2010:

In 2007 total executive compensation and severence was about $5 million. In 2010 that amount when up almost 30% to $6.5 million. This was with less executives and while the company was experiencing operating losses and still paying out 10% bonuses.

Now I’m not at all against these compensation packages. If a executive, janitor, or whomever has good talent, or a good lawyer, or union that negotiates a great salary more power to them.

My point is that it’s hard for VFX execs to change and make the right decision when the current failing system rewards them more even when things get worse.

Afterall, at the end of the day, as one exec said, these are all just “paper losses”.

The status quo will continue until we all collectively say HELL NO.

Soldier On.

33 Responses to Scott Ross Speech On VFX Industry

  1. Pragmatik says:

    As previously discussed, a trade association formed by competing firms for mutual benefit is illegal. It’s called collusion.

    Labor unions are explicitly allowed to collude by a special dispensation of Federal Law.

    If VFX companies got together to try to fix pricing or the method of bidding jobs, the studios will kill it in court, and federal charges could result.

    The VES isn’t trying to collude for mutual benefit, so they are safe.

  2. Pragmatik: How then does AICP exist in the live-action and VFX / motion design aspect of commercial production? Don’t they determine the bidding process?

    • vfxPeon says:

      that’s a good question. i always wondered how that worked as well.

      i remember one time on set a pissed off producer screamed at a vendor, “that’s it! i’m calling the aicp!” it seems like a union to me.

      • Rolling Red says:

        AICP is like AMPTP. Another acronym to wiki, not to confuse the AICP with the Association of Islamic Charitable Projects😉.

        But seriously, it all makes sense. If a producer is upset at a vendor they call AICP. It is an association not a union.

        It is also the body a “would be”union representing workers (vfxPeons) would negotiate employment standards with trying to get the best deal for its constituency ie. *us*.

        We have no one to bat for us on those high echelons. Studios have their associations. We have no one.

        Why most vfx artists think that this imbalance of power is an acceptable status quo and a natural world order – frightens the sh*t out of me.

    • Rolling Red says:

      AICP is a non profit so is VES and in fact most professional or trade associations. That in theory stymies the collusion argument.

      However, criticisms of non profit associations working to *indirectly* benefit financially its members make some sense.

      Don’t fall for the “collusion” boogeyman. Collusion is rampant with or without the trade association. Happens everyday informally on all levels, including lowest level HR personnel who naively may not even know that it is what they are doing.

      • skaplan839 says:

        “Don’t fall for the “collusion” boogeyman”</blockquote)

        Agreed. The benefits of the VFX Studio Trade Organization would be felt up and down the food chain. If there is anyone with the spinal cord and moxy to set up and get that organization running, its Scott Ross.

        Make no mistake .. as a cohesive group, the vfx studios would work together to bring stability and standards to their business. That statement alone should send shivers up the spines of Studio Execs and vfx artists alike.

        However, being organized and unified, the studios would have a collective voice in the industry that would address the vicious practice of bloodletting they call "Getting Work Done".

  3. mike says:

    what we’re really talking about is stability, and the only way to do
    that is activism… getting out on the streets… at least ows is in the
    news, not endless blogs for years on end… are we really progressing, or just talking between ourselves?

    • Rolling Red says:

      I’m with you Mike! Itching to get doing – done talking.
      Email me if serious. Same nick as in signature here, at gmail.

  4. meh says:

    The very concept of global capitalism is under fire around the world and you continue to talk about one industry in isolation?
    Have you got anything to say about the Occupy Movement, or do you see it as nothing to do with VFX?
    http://www.nycga.net/resources/declaration/

    • Rolling Red says:

      Glad to see that you’re making the link!

      I am not sure at whom your comment is directed, vfxsoldier, Scott Ross, or the readership of this blog.

      Let me point this out:

      Activism within vfx is not separate from OWS at all, only a part of it. Working to improve the unfair employment practices we are subjected to, level the imbalance of power that exists between Studios – vendors – vfx workers : is the exact thing peeps at OWS are up in arms about. As vfx workers are we, or are we not the 99%?

      AFL-CIO the grand umbrella of Unions is supporting all OWS movements. Union management and rank and file members are active in Occupy movements across the country and across the border in Canada.

      Latest polls suggest that 57% of Americans support Occupy Wall Street.

      If anyone here finds himself/herself in agreement with the 57%,
      the most direct way you can show put your convictions into play is by supporting TAG and IATSE. In doing that you’re not only helping to change the industry you work in and will retire from (don’t kid yourself otherwise), but also stand with all the people of Occupy movements everywhere.

      Cornell West got arrested at OWS but also at anti “Stop-and Frisk” action in Harlem demonstrating that there is room for more than one movement and one form of activism.

      If you’re inspired by OWS and see the link to our industry problems tweet “I support #occupyvfx”. Or start a facebook page and let’s roll.

      • Scott Ross says:

        I want you to know that I am a supporter of OWS. I too believe that our country has been hijacked by corporate greed, Wall Street bankers and their pawns (known to the rest of us as politicians).

        But when we start making analogies between the VFX industry and OWS…. one needs to understand the differences…

        First off… I have a concern that VFX workers might be targeting VFX management as the “bad guys”. Again, I’m not sure how it works at the new DD, but in my day, management was very aware that the reason we had jobs was because of the work produced by the talented men and women that actually did the work! And because of the aforementioned, we paid our employees as best we could. We knew that talented artists were in demand and we tried our best, given the difficult situation of lack of margins, to offer the best compensation packages that we could.

        As one can easily see by DD’s latest S1 registration, VFX companies are not profitable businesses. If VFX companies were profitable, and because their product and value is solely the quality of the work produced, VFX management would offer better comp to its artists. The old adage, of “you can’t get blood from a stone” comes to mind.

        That being said…. SOMEONE is making a lot of money on VFX movies. It’s not the VFX facilities ( many seem to go out of business) that are the analog to Wall Street bankers.

        Many of the big VFX companies try to keep their head above water by opening facilities in areas where there are lower cost labor pools or tax incentives. IMHO, that is making matters worse. The issue is not to make VFX work cheaper, but rather to be fairly compensated for the value that VFX brings to the Motion Picture studios and producers.

        What would AVATAR had looked like if not for WETA? What would the box office on AVATAR been if WETA had not created Pandora?

        I don’t begrudge anyone making money on their talents or on their risk taking. Jim Cameron works his ass off AND he is an incredibly talented filmmaker. FOX took a gamble on AVATAR though they did have some serious financial partners, including the citizens of New Zealand for over $44 million.

        I do however wonder where the profits went on a film that theatrically ( not including DVD’s, merchandising, sound tracks, broadcast and cable revenue) did $2.8 BILLION worldwide box office! That’s over a BILLION Dollars that went to the distributor AFTER the cost of the film!!

        I wonder what WETA made, let alone animation supervisor Andy Johns?

        So, your OWS analogy is correct in that the distribution of wealth is not equitable…. but please make sure that you understand the issues. VFX workers are generally not paid poorly. VFX workers workweeks are too long, their benefits not transportable, their working conditions ( at times) less than adequate and most importantly their jobs are being threatened by unfair government subsidies in the UK/Canada/Australia and lower cost work pools in India and China ( and soon to be other third world countries).

        But…. the reason the work is going offshore is because VFX facilities are not adequately compensated for the value that they bring to the screen and because each facility is so afraid of their clients not bringing them work ( ironically work that they lose money on) that they open companies in tax incentive/government subsidized or third world countries.

        Swimming to the bottom can be stopped, it just takes guts!

        And as for VFX Soldiers comment on my role as a founding father… thanks for the compliment. It’s funny that I am a keynote speaker all over the world, having just given one in Korea and another at SMPTE in LA… but to date, not only have I not been asked to speak at the VES annual production summit… I’ve not even been invited to attend.

        Makes ya kinda go, “Hmmmmmm”.

      • Rolling Red says:

        To Scott Ross,

        It is great to see your name mixing it up with the rest of vfxsoldiers and vfxpeons. I, as everyone else, appreciate your interest and dedication of time and resources as well as the clear desire to reform the vfx business practices. That is so much more than any other film executives has ever said or done for the health of the industry.

        Having said that, I’d like to point out a few incongruences in your stance which I am personally struggling with. Not that I expect that my critique will resonate with you or the majority of vfxers, nevertheless I’ll speak my peace as it is my habit.

        As a son of a “staunch unionist” an MTA worker (information you volunteered in an interview and in type) I would expect a deeper understanding of the meaning and principles and benefits of “workers union”. Most of us do not come from unionist families like yours and do not have a first, second or third hand experience with unionized workplace reality. Making the leap of faith is huge for us. It shouldn’t be for you as well as the understanding that forming a trade association does not constitute “organizing” by any stretch of imagination.

        To support OWS, which is supported by unions and not to support vfx unionization is a logical fallacy. Above all, to claim that a Trade Association focusing on vfx facilities will automatically address the fair working conditions for us the vfx workers coupled with your openly anti vfx unionization statements is denying us dignity and the right to self determination as a body of bodies, widest and most massive in numbers and an integral part of vfx production process. Yes we use software, but our labour is often painstaking manual, more than anyone is ready to admit. The only testimony to this effect is the phenomenon of offshoring and subsidy seeking on the part of the studios and production houses in order to cheapen and diminish the production value of our work.

        Your words have gravity because of your caliber and should be weighed extra attentively.

        You point out a perceived misconception that vfx workers see the vfx facilities as culprits and villains in the erosion of the work compensation that they receive. As someone who discusses employment standards at every occasion she can muster – let me assure you that the loyalty workers have towards their employers is haunting and unshakable. Your interaction with the vfx base seems to be only cursory and fairly limited, or else you would know what we know and see what we the vfx employees in various capacities see: that the purse holders and pushers of “cheaper, more, faster” are those at the top of the pyramid, the Hollywood studios rightly so compared by you to the greedy bankers of Occupy Wall Street. The fault of vfx facilities lies in their role as passive vendors willing only too eagerly to jump when Hollywood says “jump” and pass the diminished cost of production down to their workers. The buck stops with us, as we, with all our creativity, hard work and dedication – are at the bottom of this food chain.

        No one is beyond criticism in the boggy conundrum of vfx state of the industry. Not the complacent and fearful workforce, not the weak and unprincipled vfx production houses, not the half-assed and half-hearted efforts of IA and least of all the hollywood studios.

        To focus on the Trade Association as a one stop solution for everyone scraping a living of vfx production is narrow and short sighted. It isn’t until all of us both facilities and workers, owe up to our respective responsibilities and pick up the slack – that the face of the industry and the reality for it’s 99% will change.

        Arguably, the unionization of vfx facilities would provide the impetus needed for the vfx production houses to start getting paid adequately and fairly for their services.

        I urge you to embrace this effort half as much as the vfx workers are embracing the idea of VFX Trade Association.

        Let us do our part, so we aren’t forever at the mercy of benevolent executive saviors like yourself. A vfx union is as much a matter of dignity, pride and respect as it is about salaries and benefits.

  5. Scott Ross says:

    VFX Soldier said….

    … could take that exact same sentence and replace the word “union” with “trade organization” and make the same argument. Is it not prudent to believe that the trade organization will bring facilities profits by indirectly costing the studios more through standards and practices?

    The difference here is that a trade association should not be geographically specific, it should be an international VFX trade association ( in contrast to say the “IA”, even though the “I” stands for International, which it is not). In addition, if say 5 of the 10 biggest facilities were indeed members of this International VFX Trade Association, motion picture studios could not get their blockbuster VFX laden movies completed without addressing Trade Associations rules and regs. With a union representing VFX artists in the US, there would be increased costs (P&W, health etc) to the VFX facility. The Motion Picture Studios are price sensitive and they desire to drive prices lower and lower ( after all, they run a business and cost containment is critical ). The Motion Picture Studios will not pay the additional freight. In fact, contrary to what some big VFX studio owners say…. many of the big VFX houses have answered the Motion Picture Studios demand for lower prices by opening facilities in countries that have either lower cost labor or tax incentives/subsidies.

    But, if the VFX studios could charge fair prices (even cost plus) for their services… many ills of this industry would be cured.

    And yes, there is a connection between OWS and the conundrum facing the VFX industry, however in this movie, the bankers are being played by The Motion Picture Studios.

    And in my day, certain VFX Supervisors were paid more than the CEO… as well it should be, because after all, the clients were not coming to DD nor ILM because of me.

    Finally…. VFX soldier said,
    ” … enough to rattle the cages of execs at other big facilities to finally respond to Scott Ross. However we are a long way from that: Scott Ross isn’t even mentioned on Digital Domain’s website.”

    The DD that I started in 1993 is very different than the DD of 2011.

    • VFX Soldier says:

      Hey Scott,

      Thanks for reading.

      I’m totally with you on the trade assoc. but the same essential arguments against a labor union (which I dont agree with) can be made:

      Some argue that a labor union that only represents workers in North America will just drive the work to non union areas.

      If only 5 of the 10 big facilities join your trade assoc., won’t that just drive all the work to the other 5 non-members?

      You implied that the US Studios want lower prices and refuse to incur extra costs associated with a labor union but won’t the trade assoc. indirectly raise prices through regulation and “fairer” prices? (cost-plus is going to be more expensive than bid-underbid).

      Prices won’t stay the same as the current low margins that are killing facilities, and they aren’t going to be cheaper with the trade assoc because if they were, Studios would have coerced those rules long ago for cheaper prices. Costs have to go up with a trade assoc.

      and about the fact that the current DD website doesn’t even acknowledge you, that’s like leaving one of the founding fathers out of a history book!

      • Scott Ross says:

        “If only 5 of the 10 big facilities join your trade assoc., won’t that just drive all the work to the other 5 non-members?”

        nope…. because the other 5 could not handle the volume increase. Think about how many shots DD/ILM/R&H/WETA/SPI do! Now think about them not doing the work for the summer of 2012….. yikes.

        Also chances are, the other 5 are not suited to do the work as efficiently. Take a talking animals movie…. I know ILM/DD/WETA etc, could do the work…. but not as efficiently as R&H could.

        As to erasing history…. it’s always done… the Japanese do not believe that they started WWII… Myth, if spoken about often enough, over time becomes history/fact. Read my blog…. http://scottaross.com/2011/06/20/lord-of-the-ring-part-3/

      • VFX Soldier says:

        “nope…. because the other 5 could not handle the volume increase. Think about how many shots DD/ILM/R&H/WETA/SPI do! Now think about them not doing the work for the summer of 2012….. yikes.”

        Scott I totally agree with you. In fact that was the same argument I used in support of a VFX union in a post called The Fallacy of Infinite Scalability:

        https://vfxsoldier.wordpress.com/2011/06/01/the-fallacy-of-infinite-scalability/

        The point I’m trying to make is the same bogus arguments against the trade association are used against a union.

      • Scott Ross says:

        “The point I’m trying to make is the same bogus arguments against the trade association are used against a union.”

        Yes, I guess if one could organize every major shop and have thousands of VFX workers agree to join the union ( which, is yet a whole other set of issues). A Trade Association would only need approval and agreement from, say, 5 companies… a much more doable, quicker, easier and efficient way of organizing!

  6. Pragmatik says:

    I’m all for improving life for VFX artists. I just think we should focus our efforts on things that are likely to reap a benefit.

    I’m not interested in a back-and-forth or ad hominem attacks. It just seemed to me that the conversation lacked a pragmatic business perspective.

    The fact is, competing VFX firms working together for mutual benefit is illegal. It may happen all the time, but when that collusion threatens the profits of the major studios, they won’t let it slide. These companies have lots of lawyers on full-time salary. The not-for-profit trade association isn’t going to have the legal resources to fight the lawsuits. Also, when the congloms lean on the Government to enforce the anti-collusion laws, the party will end in tears for VFX people.

    This isn’t a “boogeyman,” it’s business logic. If you threaten the studios profits, they will fight you. Whatever weakness you offer, they will attack. To think otherwise, is to not face the realities of business.

    Returning to cost-plus bidding on the studio level is unrealistic. How do you think bidding changed to flat rate? As soon as one hungry FX house offered a flat rate to undercut a competitor, the studio had a precedent. They insisted that everyone go to flat rate. Any house that refused, didn’t get the bid.

    Why did that happen? Because the studios saw it as a way to save money, and make spending more consistent with budgets. A big value-add for them.

    Going back to cost-plus is great for VFX artists, but what does it offer to the studios? It doesn’t benefit the studios at all, so they won’t go for it. Period.

    As long as VFX artists are complaining about the unfairness of it all, and operate from a desire to make the business more fair, the efforts are doomed to failure. Better to find a solution that creates benefit for both sides.

    The pragmatic business approach is to find a solution that will help VFX artists, while bringing significant value to the studios. That’s the only way the studios will play ball. I don’t have to rehash all the reasons why the studios can’t be compelled to comply with VFX artists demands. We should have unionized 30 years ago. That ship has sailed. We need solutions that are viable now, with current circumstances.

    For example, if a VFX house bid X flat rate on a project, but offered an alternative bid of 50%X on a cost-plus basis, they might get a studio to bite. If a studio was trying to reduce their downside on a picture, they might force the filmmaker to get it right the first time to save 50%. Without a dramatic price difference, though, why would the studio be interested?

    Of course, if the final cost of the cut-rate cost-plus bid turned out more than the flat rate, it’d be a non-starter.

    Can you think of other scenarios that could help VFX artists, while offering a significant tangible benefit to the studios?

  7. Pragmatik says:

    One more thing.

    When contemplating the future of the VFX business, and VFX artists in particular, consider the following factors:

    *Technology continues to get cheaper and more powerful. Your kid’s PC is more powerful than some early CGI workstations.

    *Software continues to get more automated. From matchmoving to roto and 3D modeling, software is taking the skill out of being a VFX artist. As the trend continues, the barrier to entry for new artists will get lower and lower.

    *There are more VFX artists than ever before, and the numbers are constantly growing worldwide. Now there are schools, both online and realworld, churning out youngsters trained in Nuke, Maya and more.

    *The internet in general and digital video in particular have made the world local. Competing VFX artists in India, Russia and Australia are just as convenient for the studios to work with as artists in Santa Monica or San Francisco.

    *High paying VFX jobs have always been based on several barriers to competition: scarce expensive equipment, highly specialized and highly technical skill sets, and a high degree of aesthetic ability required to perform the work. All of these factors are being obliterated, in the same way that the printing press obliterated the need for highly-paid scribes to hand-letter your books.

    Think of it this way: a VFX career is now less like a nuclear engineer and more like an electronic musician.

    Thirty years ago, an electronic musician needed expensive gear, esoteric knowledge and a specialized aesthetic sense. These days, anyone can do it. Lots of people want to make electronic music, and some do it part-time or just for fun. A tiny percentage make a great living by creating enormous value. Anybody can give it a try, and powerful tools are almost free. People who want to make a living at it find new ways to make value and differentiate themselves.

    To build a successful future for VFX artists, we must create a business strategy that accommodates these conditions. It seems unlikely that highly-paid VFX jobs will remain available indefinitely.

  8. Scott Ross says:

    Rolling Red ( gotta ask, where did your handle originate?)
    thanks for your thoughtful, articulate comments. I enjoyed reading your post.

    Also, thanks for your kind words… having sold DD in 2006, I could have ( and some say should have😉 )
    not given a damn about the industry. However, I spent my entire professional career building companies, employing thousands of men and women and in some small way, I hope, changing our industry for the better. THis industry has been my life’s work and it is for that reason that I want to add my thoughts, experience, vision and insight in helping our industry weather the difficult times it is now facing.

    That I support the OWS movement but do not support the formation of a VFX union is not, IMHO, incongruent. The fact that I support the OWS movement and I do not support Barack Obama, the Democratic Party nor any other politician or organized political party is not incongruent. That I am the son of a “staunch union supporter” informs my opinion but does not sway my opinion. Red, I think that kind of “pigeon holing” is at the very root of many of the problems facing America today. I make up my own mind about issues and refuse to be labeled.

    You also state that I am trying to deny you and VFX workers dignity. I have no intention of doing so, my intention is to help save our industry and to protect the jobs of VFX workers. For the record, my interaction with the “VFX base” was never cursory. As an executive, I made sure that I communicated with and got feedback from employees. I held open group meetings every week and fostered an open door policy.

    You state that ” …Your interaction with the vfx base seems to be only cursory and fairly limited, or else you would know what we know and see what we the vfx employees in various capacities see: that the purse holders and pushers of “cheaper, more, faster” are those at the top of the pyramid, the Hollywood studios rightly so compared by you to the greedy bankers of Occupy Wall Street.”

    Those two statements are incongruous. Either I am not in touch with the VFX base and I don’t agree that the Hollywood studios are the culprits or I am in touch and I do agree that the Hollywood studios are the culprits. Your logic escapes me.

    In addition, I never said that an International Trade Association is the ONLY piece of the pie. I believe it is an important piece and most likely the easiest with the quickest results.

    I do agree with you when you state ” The fault of vfx facilities lies in their role as passive vendors willing only too eagerly to jump when Hollywood says “jump”…” If you’ve read my previous entries on VFX Soldier, you would see that I have consistently challenged the power status quo ( the facility owners and CEO’s) to start to charge the Motion Picture Studios for the value that VFX studios provide. I have , over the years, been an advocate for righting the inadequacies of the way VFX studios have been compensated.

    Years ago, I left the VES because I saw the handwriting on the wall… I understood that the economics surrounding the VFX industry needed to be addressed and that while I enjoyed feting the likes of Linwood Dunn and Ray Harryhausen, I knew that there would be no party at all if the VFX industry went bankrupt.

    I have not been actively involved in the industry for a few years, but your statement of “everyone scraping a living in VFX” seems disingenuous. My daughter, a teacher, my son a minimum wage employee, some of my friends artists and musicians and the guy that just took my order at In N Out would love to make the money that a VFX worker makes. Last I checked, VFX workers were being paid well. They are being worked ungodly hours, with non transferable benefits and are losing their jobs to companies located in countries that offered tax incentives, government subsidies or low cost labor.

    I don’t agree that ” the unionization of vfx facilities would provide the impetus needed for the vfx production houses to start getting paid adequately and fairly for their services”. I believe that the unionization of VFX facilities will accelerate the Motion Picture Studios desire to take much of the VFX work to countries that not only offer tax incentives, government subsidies but also offer low cost non union labor pools.

    But then again, maybe I’m thinking of Unions in the wrong way. Maybe the Unions of today are not about seniority and they reward innovation… maybe today’s Unions are not about dues and supporting Union bosses but are about truly caring about the health of the VFX industry, maybe modern Unions do not try to drive up employee wages/P&W/healthcare to the point of making companies uncompetitive in a global market. If that is the case, maybe I do support a VFX union.

    With respect,
    Scott

    • Rolling Red says:

      Hey Scott,

      Thanks for taking the time to respond. I want to focus on the common ground and the fact that our points of view in their differences are complimentary. Your summary of my opinion – “Either I am not in touch with the VFX base and I don’t agree that the Hollywood studios are the culprits or I am in touch and I do agree that the Hollywood studios are the culprits” – is reductionist and you’re guilty of the same pigeonholing you objected to in my arguments. I hear you when you say that your cheering for OWS should not automatically be interpreted as support of the Dems or Unions in general. By the same token, your keen eye to identify the source of problem in the vfx industry does not indicate that you possess the complete understanding from the vantage point of a vfx worker, just as I would not dare to presume to understand the challenges tied to being a vfx industry employer. I am glad that you clarified that you do not see the formation of a vfx trade association as a silver bullet to fix all ills in the biz. My desire was only to suggest that there is room for variety of tactics and striving for a confident, educated, empowered and united workforce is one of them and should not be dismissed. As I pointed out in my previous comment, if we each did our part within our respective positions and capacities, the facilities, the workers, the IA and VES – we could turn this boat around. And it’s ok if we don’t necessarily all pull in the same direction as the path will crystalize ahead as a result of our combined efforts. Any outcome is guaranteed to be better than the present race to the bottom.

      I want to be concise and don’t want to test yours, vfxsoldier’s or the readers patience by hijacking the topic of this post. I do want to point out that the claim that unionization efforts will result in work leaving overseas is not worth repeating, certainly not by someone with your depth of understanding. IA may not be a truly international entity, mine and my colleagues’ appeals to that effect were largely dismissed by lower level local IA management. What is becoming widespread internationally however is the awakening of class consciousness. I am writing to you from Vancouver. The notion of the necessity of some sort of vfx union is no longer LA bound. London vfx workers are chiming in. Vfxsoldier reported about a forum talk discussing unionization in India. As vfx workers are made to move around in pursuit of increasingly shorter work contracts so are their ideas and impressions of the state of vfx industry.

      One last remark I want to make is to contest your assertion that vfx workers are paid well. Let me qualify that statement by saying: not all, not everywhere and certainly not the young blood. My move to Vancouver after over a decade of vfx work in the US was a shocking eye opener. Subsidies are not enough to draw the projects and facilities in, Canada’s lax labour code is an additional incentive never mentioned. While some vfxers, especially experienced old timers can command decent salaries mostly in California – that is no longer the norm as it was 15 years ago in the golden age of vfx industry’s ascent. What is being established in the new offshoot production locations like London, Vancouver, Singapore and Bangalore is the new normal with the bar for what is considered fair compensation set progressively lower every time. We are only a few generations of vfx graduates away from our biz becoming just a job like that of your “daughter, a teacher, my son a minimum wage employee, some of my friends artists and musicians and the guy that just took my order at In N Out”.

      It is time to revisit our outdated misconceptions about vfx compensation and unionization in the face of the changing industry.

      PS. My nick is inspired by the great Martin Emmond.
      Regards,

      • Scott Ross says:

        Dear Rolling Red,

        Again, thank you for taking the time to respond as communication and open dialogue are critical to framing the issues and hopefully getting some things done ( as opposed to just blogs, Bills Of Rights and meetings) to fix the very real problems that our industry faces.

        You are correct that I do not “…possess the complete understanding from the vantage point of a vfx worker”. What I have seen and heard are that US VFX workers are concerned about several key issues. They are : non-transferable benefits, very long work weeks and days, OT policies, credits and the continuation of a shrinking US work force as US VFX workers watch their jobs move offshore to cheaper labor pools. Please inform me of any other key issues that US VFX workers face.

        The major challenge that the VFX industry faces is, to me, simple. VFX adds incredible value to a very profitable motion picture industry yet VFX facilities make no money! I wonder if back in the day, Tom Cruise or Arnold Schwartzenegger would have starred in a movie had they not been handsomely paid! Tom and Arnold were making $20MM a movie …. plus real backend participation. Today’s movie stars are VFX… and while they cost a lot, they make no money.

        Basic economics say that one either has to lower ones operating expenses or raise prices to get out of the mess that the VFX industry finds itself in. The VFX facilities are trying to lower their prices by building facilities in tax incentive/government subsidized or cheaper labor pool countries.

        If US VFX workers join an established motion picture union, the cost of doing business in the US will go up. The Motion Picture Studio will not bear those increased costs, the US facilities margins will go lower as they will have to bear the additional freight and very quickly, IMHO, the US industry will continue to accelerate towards going out of business. That, Red, is basic business that you and other VFX workers need to understand… You say ” Any outcome is guaranteed to be better than the present race to the bottom”. I contend that a US based Union would be tying additional weights to the legs of our industry and insure that we get to the bottom much faster.

        Don’t get me wrong… and please do not pigeon hole… I am not anti Union per se. Unions were an important part of righting the wrongs of big greedy business. Unions were critical in protecting the worker from the greed of the 1%. Unions were viable when our economy was not tied to a global economy. I, for one, did not eat grapes for over a decade!

        But in today’s global economy and in VFX where the employers are not the big greedy businesses reaping gargantuan profits on the backs of underpaid workers… the Union has no place.

        The zeitgeist of the OWS movement is right on…. there is the need to address class consciousness and class disparity but maybe as you say, I don’t fully understand the issues. When I ran DD, newbie “Digital Artists” were being paid well and established folks were being paid handsomely. I can’t speak to Singapore nor Bangalore or even outrageously government subsidized countries like Canada, the UK or Australia, but if what you say is true… let Unions organize in there. That will raise the Indian VFX workers salary to only 60% of a non union US VFX worker.

        US VFX workers get paid well, to suggest otherwise would be disingenuous. My nephew, a talented visual effects compositor with a BA, makes approximately four (4) times more than my daughter, a talented grade school teacher with a Masters degree. Entry level VFX people in the US, back in my day, were being paid more than entry level MBA graduates. I don’t believe pay is the issue for US based VFX workers and frankly find it disturbing to think that a VFX worker would consider themselves as a member of the “downtrodden”. They are, however, worked ungodly hours when they work and should be very concerned about losing their jobs.

        I think it is time to consider what the real problems are in our industry and not fall into the old diatribes of red vs blue, democrat vs republican, labor vs management, us vs them…. the time has come for real solidarity.

        And, if any Union leader disagrees with the above, I invite them to have an open discussion with me, in a public forum to try to come to realistic solutions with the hope of saving peoples jobs.

        With respect,

        Scott

  9. Rolling Red says:

    Dear Scott, 
    Funny how wordpress limits the depth of comment exchange to only 3. I would be happy to let you have the last word if I did not think the your comment contains misinformation. I’ll get right to the point. I’ve taken a keen interest and here is what I learned re. union from interfacing directly with IATSE union rep.
    1) Speaking of basic economics and your claim that vfx unionization would increase the cost of vfx production beyond sustainability. I’d like to point out that workers pay union dues not vfx facilities. Monthly work dues go towards salaries, offices, equipment, personnel and general infrastructure.  The only increased cost to the vfx shops would be their contractual obligation to pay fair wages, proper overtime, vacation pay, health and retirement plan premiums – stuff companies should be doing for their employees anyway, and admittedly some already do. Wouldn’t Trade Association under your leadership  want to provide those same employment minimums and therefore wouldn’t the ultimate cost to the companies be the same?
    2) Why would I as a vfx worker personally opt for a union to acquire these basic work benefits rather than count on a Trade Association to keep signatory companies in check to provide the same? Simple. I see union membership and the dues associated with it akin to taking out an insurance policy or getting an agent. Although HR people in companies are the nicest people on earth – the truth is that they are paid by the company and work on it’s behalf. A union and union reps work for me because well-I pay them. This is an expense where the ultimate benefit far outweighs the cost paid (of my salary and not a company payroll like it could be misunderstood from your comment).
    3) Finally, let’s not kid ourselves a business union like IATSE is conservative and cuts more deals with AMPTP than I personally would like. It is not the renegade, radical union peeps are so scared of. Their contracts are based on concession and compromise. They don’t want to rock the boat too much since their own livelihood depends on members who are gainfully employed and pay dues. Unions want to stimulate an industry to keep their membership employed. They’ll even lobby the government for unpopular subsidies. Last thing they want to see is an industry go bankrupt.
    4) Collective agreement negotiations are supervised by local branches of Labor Relations Boards. It is the body with the final authority to judge whether additional expenses asked of a company on behalf of it’s unionized employees are tenable or not. If the board deems them to be excessive a union has no choice but to downscale the demands.

    Much more to speak to but these are most pertinent points. Part of me wishes we could hash it out in person or another forum rather than impose on everyone here.

    Cheers,

    • Scott Ross says:

      Dear “Rolling Red”,

      Not sure about the WordPress issue, but I unfortunately can’t let you get the last word because you too have lots of misinformation in your last message !

      I might be uniquely qualified to talk about the issue of Union or non-Union work forces in the Visual Effects business. I don’t believe there has been, to my knowledge, any other CEO that has run both a Union VFX company (ILM) and a non Union company (DD), besides myself. Not only have I negotiated Union contracts as an employer, I was also a Trustee of IA local 16.

      I surely know that Union dues are paid by the worker and not by the company. I am also very aware of the costs that are borne by the company for running a Union shop.

      You are absolutely right that those costs include “fair wages, proper overtime, vacation pay, health and retirement plan premiums”.

      As to fair wages, the companies that I ran paid our employees fair wages and given the escalation in salaries over the years, and free market economics, I would hope that you would agree that VFX workers in the US are paid well.

      Proper overtime is regulated by state labor laws. Those who break the law should be penalized.

      Vacation pay is set by companies and by general practice in various industries and not by law. Depending upon the health of a company and its profitability, vacation plans vary from company to company and from industry to industry. Health and retirement plans are similar to vacation pay in that companies are not, by law, required to have either health nor pension plans for their employees.

      Given the state of the increasing cost of health insurance, companies have significantly cut back on health plans.

      At ILM, health plans for Union employees were more expensive than non union workers and considerably more expensive than the health plan offered by DD. I have had several conversations with Union officials that have said that the Union health plan, while more comprehensive than say most VFX facilities health plans, would cost the company less because the Union was a larger buying group and therefor got lower rates.

      I have asked the IA to show employers the Union Health Plan rates so that employers might compare the Union plan rates to their company rates. IA has never been forthcoming with their rates so that we might compare costs.

      And finally, Pension Plans are, to my knowledge, not offered to any non union VFX workers.

      So… that is a long way of saying…. Unions cost companies more money… and in an industry where there are no margins….it’s a non starter.

      As to why a trade association is critical…. The basic issue with the VFX industry is that VFX facilities do not turn a profit ( once again, look at DD’s S1 registration). If facilities were making money, a lot of these issues would be moot. And if VFX facilities were making money and the issues were not addressed, then form a Union ( the companies then could afford it).

      Your statement :
      “They don’t want to rock the boat too much since their own livelihood depends on members who are gainfully employed and pay dues. Unions want to stimulate an industry to keep their membership employed…. Last thing they want to see is an industry go bankrupt.”

      Seems to make sense. IMHO, the Unions are similar to the folks that run the VFX facilites. Both sets of bosses want to protect THEIR livelihoods, and at times may not see the forest from the trees.

      I see it this way: The Unions, would cost the VFX facilities
      money that they don’t have, thereby raising the rates of US companies ( remember the “I” in “IA” does not mean that they organize in China or India) thereby driving the business offshore.

      The big VFX facilities, already margin-less, are already building facilities in places where there are lower costs thereby driving the business offshore.

      Both driving the business off shore, both trying to protect their jobs and both missing the point : VFX facilities need to be paid for the value that they bring to boxoffice.

      And finally, all of me wishes we could hash this out in a public forum, at a town hall meeting, where no one has to hide behind false names, strange monikers, and be faceless.

      Scott Ross

      • Rolling Red says:

        Yes. Unions do cost companies money. That cost is not arbitrary but negotiated and regulated by Labor Relations Boards which will not allow the company in question to go broke over additional benefits to their employees. It is counterproductive to all parties, the employees, the union and the companies.

        Your next statement defining the “basic issue” with the vfx industry as “facilities not turning profit” – exposes your pro business employer skewed bias. I am sure that you understand that from my perspective the “basic issue” is *unfair distribution of profits*. Vfx facilities may not turn satisfactory profits – but the industry as you know is not broke – it makes Billions of dollars worldwide every year. The money which is the direct result and fruit of our daily stress, sweat and sacrifice – not surprisingly – does not trickle down even in part all the way back to us, the vfx artists.

        We are both making a mistake here and speaking in very narrow vfx production company – vfx employee terms. There are significant number of vfx artists working directly for big name Hollywood studios. It is quite common in BC Canada and I know that it is also part of the greater vfx landscape in California. Following your logic, and given the fact that all the industry profits are concentrated at the top – vfx artists working on set – should unionize because the direct issuer of their paycheck (big name hollywood studio) is loaded. Meanwhile, vfx artists working for vendor facilities, should contend with decent pay in the US (according to you, why you do not anticipate it eroding surprises me), no pension, practically no longer existing RRSP contribution matching, and continuously reduced health benefits at best. At worst of course there is cases of misclassification of employment and unpaid OT.

        I don’t think there should be a double standard depending on where one is lucky or unlucky to be employed at. Nor do I believe that vfx artists are the only remaining group in the Film business that should be dissuaded from unionizing simply because the businesses they work for prefer to get by, by denying their workers basic benefits rather than honestly assessing the cost of vfx production to include the welfare of their employees.

        Vfx artists are not individual writers, directors or actors receiving residuals largely ahem – thanks to their unions but a massive labor force. I strongly believe that adequate pay, health care or extended health care in Canada, vacation pay, pension and if not pension then RRSP matching, OT pay including penalties on work in excess of 60, 70 or X no. of hrs per week in the form of double or triple hourly rate – are our prerogative for supplying highly skilled technical and artistic services and dedicating our life to the profession.

        I also know this: the public’s appetite for spectacular visual effects is growing and digital effects permeate increasingly new sectors of the economy, not to mention sister fields of animation and games industry where our skills are already highly transferable. The Film industry is turning yearly profits despite the global recession. The demand for vfx work will therefore remain steady short of a revolution😉. If your predictions are correct (which is debatable) and a few vendor facilities will find themselves uncompetitive due to pressures from the workforce below – the projects will be awarded to another vendor shop where we’ll find employment. You choose to argue that vfx unionization is a zero sum game for facilities. I don’t see it that way (see my opening paragraph).

        Happily, it is certainly not so for vfx artists.

        We may have to end this exchange by agreeing to disagree.

      • Scott Ross says:

        Thanks Red… but once again I disagree with many of your suppositions.

        As I’ve said before, I am in a very unique position. There is no personal upside for me. I no longer own a VFX facility ( thank god), I am not employed in the VFX business. I am solely interested in helping an industry that I dedicated my life to.

        I’m not sure what your business background is, but I’ve run 2 of the 5 largest VFX companies in the world. I’ve founded one of the largest VFX facilities in the world. I’ve done so, successfully, from 1986-2006. I’ve run a Union shop and a non Union shop. I believe I am highly qualified to talk about such matters.

        Please don’t ask me about spline curves or NURB surfaces… I would direct you to a qualified TD!

        Again, I would be happy to discuss this issue publicly, with any Union boss, facility boss or studio boss. I am open to the possibility.

        I just want to see the industry that I helped grow, continue to do so.

        Thanks,
        S

  10. Scott Ross says:

    Red… are you there?

    • Rolling Red says:

      Hey Scott, what’s up? Surprised at your prompting comment. I seem to have struck a nerve with you. Your allusion to false names, strange monikers and faceless-nes, has admittedly left a bad taste with me. I am not sure what your suspicion is and I refuse to speculate on it. Suffice to say that I am very easy to track down on the web and have not made any efforts to disguise myself. I have been very open about my pro union opinions and made it a point to put my name to it in person to fight the paranoia that is needlessly surrounding the question of vfx unionization. I’ll now get back to your previous comment and leave a few observations. Cheers.

  11. Scott Ross says:

    Sorry about the bad taste.. I was just tellin it like it is….As I’ve said in the past… I’d enjoy the opportunity to have an open dialogue in a public forum w anyone interested in helping save the VFX industry.

  12. […] went over the salaries of some of the DD execs and had to ask: With so many bonuses and extra pay in severance, what incentive is there for these […]

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