Life In The Movie Business: An Inside Look At The VFX Crisis

There is no doubt that the visual effects (VFX) crisis affecting the film industry right now is going to have an enormous impact on how movies are made in the future. We're just not sure how long it's going to take and what that solution looks like just yet. Here's an insight into the problems plaguing the film industry, what life is like as a VFX artist, and the Oscars controversy that pushed the whole thing over the edge.

How the VFX business works is perhaps best explained as a game. There are three teams: the big American film studios, the VFX vendors and the VFX artists. Each team has a unique strength and weakness. The big American film studios have money (strength) and technology (weakness), the VFX vendors have infrastructure (strength) and mismanagement (weakness), and the VFX artists have creativity (strength) and disorganisation (weakness). The objective is to use your team's unique talents to make blockbuster movies that generate tens of billions of dollars at the box office. Grab as much of that money as you can while low-balling all the other teams and exploiting their weaknesses. The team that has the most money, the most power and the most glory wins the game. The only rule is that all three teams must remain in play — or it's game over for everyone.

Of course, it's a bit more complicated in real life. The vendors serve as middlemen between the film studios (which hand out the work) and the artists (who do the work). And the day-to-day competition exists not so much between the three teams as it does within the teams themselves. The film studios compete with each other for distribution rights to the next big thing, the vendors try to outbid each other for whatever projects the film studios come up with, and the artists compete with each other for jobs created by vendors to work on those projects.

You don't need to look far to see just how tough it is to succeed in the VFX business. Here's a partial list of what we've seen in the past 12 months alone:

And then there's industry veteran Rhythm & Hues, which is considered to be one of the best in the business for its photorealistic creatures in such films as The Incredible Hulk and The Chronicles of Narnia. That wasn't enough to save it from having to file for bankruptcy protection a couple of weeks ago following a failed acquisition. According to the bankruptcy filing, Rhythm & Hues could not cover the cost of doing the work at the agreed price:

Unfortunately, with respect to current projects, the company will be unable to complete them at the bid amount and therefore needs additional funding to pay the costs, mostly labour, for the projects to be completed.

Rhythm & Hues is now facing a class-action lawsuit over unpaid wages and termination without cause.

Right: Guillaume Rocheron, Bill Westenhofer, Donald R. Elliott and Erik-Jan de Boer, winners of the Best Visual Effects award for Life of Pi. Picture: Jason Merritt/Getty Images.

"Box Office + Bankrupt = Visual Effects"

Unsurprisingly, VFX artists were outraged that yet another VFX house had bitten the dust. How is it that VFX companies are struggling so much despite the films they work on being so successful at the box office? Hundreds of VFX artists converged outside the Dolby Theatre in Los Angeles where the Oscars were being held to draw attention to poor working conditions and the unsustainable business model forcing VFX vendors to their knees one by one. A chartered plane flew overhead pulling a banner that said: "Box Office + Bankrupt = Visual Effects vfxunion.com".

And then things get really interesting. As the VFX artists protested outside, Rhythm & Hues was inside winning the Best Visual Effects Oscar for Life of Pi. Bill Westenhofer, VFX supervisor at Rhythm & Hues, accepts the award, but he runs out of time and his speech gets cut off as he tries to talk about the VFX industry's financial problems.

Westenhofer later tells reporters that he was trying to draw attention to the fact that VFX companies are struggling at a time when VFX movies are dominating at the box office. "...I wanted to point out that we aren't technicians. Visual effects is not just a commodity that's being done by people pushing buttons," Westenhofer says. "We're artists, and if we don't find a way to fix the business model, we start to lose the artistry. If anything, Life of Pi shows that we're artists and not just technicians."

Not long afterwards, Ang Lee, who accepts the Best Director Oscar for Life of Pi, seemingly acknowledges everyone except Rhythm & Hues in his acceptance speech. He also reportedly made a comment a couple of weeks ago about how he would like visual effects to be cheaper. That drove at least one VFX artist to Facebook to vent in a scathing post:

Neither Ang nor his winning cinematographer, Claudio Miranda felt they needed to thank or even mention the VFX artists who made the sky, the ocean, the ship, the island, the meerkats and oh yeah... the tiger. Ang thanked the crew, the actors, his agent, his lawyer and the entire country of Taiwan right down to the team that built the wave-pool on the soundstage where Pi was shot. But failed to mention 100's of artists who made, not only the main character of the tiger, but replaced that pool, making it look like a real ocean for 80% of his movie...

If you've seen Life of Pi, there is no doubt that the film's success largely comes down to the visual effects — it did just win an Oscar saying they were the best after all. Indeed, Hollywood's record-breaking $10.8 billion box office haul in 2012 would not have been possible without the visual effects that made blockbusters such as The Avengers and The Amazing Spider-Man possible in the first place.

Life in the VFX Industry

The VFX industry is notorious for its insane working hours and family-unfriendly demands that regularly draws comparisons with sweatshops in the manufacturing industry. And because it's a relatively young part of the film business, there is no official union at this stage to look out for VFX workers.

They are also not as well-liked by the broader film business and are typically seen as a necessary and expensive evil. This disdain is reflected in any movie you watch: If you pay attention to the credits at the end of a movie beyond the top-billed cast and crew, you'll notice that the names of the VFX crew are always listed closer to the end — underneath the name of the receptionist, the caterers and the company that provided the security guards — even when the film is almost entirely created with visual effects, as was the case in Life of Pi.

We spoke to two active VFX workers, but they asked not to be named because speaking to the media without permission breaches the non-disclosure clauses in their employment contracts. We'll call them Bert and Ernie.

Most VFX artists develop and maintain a specific set of skills that allow them to specialise in such areas as animation, effects or lighting. They work up the ladder from junior positions to mid-level and senior roles that eventually offer leadership and management opportunities. Some choose to specialise in animated features, live-action movies or TV commercials. Artists also have IMDB profiles with a reverse chronological list of films they've worked on along with their job titles.

Bert says artists are usually required to work in the dark — much like photographers and dark rooms.

"It's purely for technical reasons," Bert says. "We can't have glare or outside light sources getting in the way, and we need to see the image in the same lighting conditions people will be seeing it in the cinema."

Most artists consider themselves to be independent contractors and rely on overtime rates to make their budgets stretch between jobs — they are hired by VFX vendors as required on a project by project basis with no expectations of continuing work. Many artists are compelled to chase short-term contracts overseas and spend months at a time away from their families. Coworkers are more often than not the only friends you have, and romantic relationships can be more trouble than they're worth when you know you'll only be in town for a little while.

From the VFX protest outside the Oscars on February 24, 2013. Picture: neonmarg/Flickr

Moving around becomes especially difficult when kids enter the equation. Some switch industries entirely while others transition sideways into video games.

"You can spend two years working on one video game as opposed to one movie every four or five months," Ernie says. "And you get royalties if a game does well, especially if you're in a higher up position."

It's not unusual for post-production staff to be required at work 12-15 hours a day, seven days a week in order to deliver a film in time for Boxing Day or the Easter long weekend. These deadlines are mandated by the motion picture studios — the same studios crying poor over online piracy even though it continues to rake in billions of dollars in revenue each year.

From the VFX protest outside the Oscars on February 24, 2013. Picture: neonmarg/Flickr

What Now?

Efforts to unionise are currently underway, but it requires the cooperation of the entire VFX industry. Financially strained VFX houses are understandably reluctant to take on the costs of negotiating a collective bargaining agreement, and artists who rely on short-term contracts are reluctant to put their jobs on the line.

Where the work goes is largely determined by where the biggest tax incentives are located. For instance, the Canadian province of British Columbia has paid out $437 million in tax credits to the big film studios in 2012/2013, which Canadians now have to make up for by paying more for healthcare and increased taxes. VFX vendors have no choice but to take jobs away from places like Los Angeles in favour of Vancouver in order to compete on a level playing field.

And it's not over yet for Rhythm & Hues. The film studios have agreed to give the vendor "emergency loans" so that it can finish the films it has yet to complete. Of course, the film studios have everything to gain by ensuring those projects are completed. Those box office takings are not shared with the vendors nor with the artists who bring the projects to life.

Murmurs of strike actions have gained momentum — and such a move would paralyse not just the film studios and the vendors but the entire entertainment business. Films would halt production, release dates would be missed, merchandising agreements would be broken, the cinemas would have nothing to show, and we would have nothing to watch. If we don't start addressing these problems soon, there might not be any other way around it.

Pictures: Rhythm & Hues, Getty


Comments

    Funny thing was I seem to remember game developers complaining about how companies like Pixar and ILM were grabbing up all the good computer artists and animators, luring them away with big ollywood money.
    Maybe they will see that the grass is not always greener and go back to games.

    Amazing article. The loss of Rhythm and Hues is especially disappointing. They were up there as part of the "Big 3":
    - RnH
    - Weta
    - ILM

    Rhythm & Hues need to realize that they have big film by the balls, and it's not the other way around.

    Unfortunately they have employees to look after and legal obligations, but in a perfect, non contractual and convoluted world, the creatives (who generate 100% of the value of anything) would be able to go on strike and threaten not finishing this stuff.

    After all, these films would now fail with their primary reliance on the Green.

    I'm a game designer myself, and this instability rouses memories of my experiences in games... weeks without pay, overtime without pay all so I could end up losing my job anyway.

    Creatives should have the power because that's where the value is... that's just common sense. You like stuff? Let them have money; creatives do this amazing thing... they automatically create things if they're afforded freedom.

    I'm sick of suits with fast cheque books making ludicrous demands through their naivety fogged glasses; you create nothing. Having money isn't a real skill, stop exploiting real talent and please stop ruining all that is good in this world.

    Go to the moon and sell each other rocks and leave us alone.

      God I hope they unionise.

        The problem with unionising is the same one we have in the games industry - the world is full of naive kids and second world folks who have a lot of creative talent and will be happy to work for a lot less money and worse conditions than the professional, Western ones do. Or that's always been the general consensus. Whether big film and big game would really scarper to China or replace unionised artists with kids who don't know any better is debatable, but not implausible.

          If the union is large enough, its members can refuse to work on projects that allow non-union labour. That is effectively what has happened for actors, writers, etc for Hollywood films made by the big studios.

          Of course, this situation has its own downsides if the union doesn't properly represent every member of the relevant industry.

          While this is a huge generalisation and there are exceptions, you'll probably find that the quality of the work done by outsourced second and third world artists is much lower than artists in the west. The artists working on feature films (and to a slightly lesser extent, AAA games) are the absolute best in their field, which is already a very small one, with limited positions available. They are artists, not technicians, and that is something that isn't so much skill based as it is talent based - while the software used can be very technical and complex, it's not just a matter of pushing the right buttons to make the art come out.

          Many of the non-western artists who fit in this top tier have already left their home countries to work in the west, so those who are left can't compete when it comes to quality. The same goes for naive kids churned out of animation schools. They don't have experience, and only a small percentage of them will have enough talent to progress further than low level commercial work. If studios snub a union of the top tier of western artists, the quality bar will drop, and it will be noticeable. The executives at the top might not care, but eventually the public will, and the money will dry up.

          Got I hope parents start teaching their kids the importance of standing together.

    Had no idea that was going on. Fascinating read. With that said business exploiting vendors? SHOCKING NEWS! ;)

    huh....Australia acutally had VFX studios

    arent the studios being outside of LA somthing to do with tax?

      Australia has had some of the biggest VFX studios. The one that made Dark City/Matrix being a notable one.

        AKA Animal Logic.

        We've actually got quite a lot of little effects houses, mostly up around Sydney with a surprisingly large number in Adelaide.

      Normally State Govts will offer tax insentives to offshore companies to bring the work into their state - Hire local crews, companies businesses etc. I think the NZ Govt gave big cash insetives for the Lord of the Rings Trilogy, but recently they did a flip and I remember reading that a few film unions in NZ were going to strike?? (can't remember the source)

    If you're interested in more before and after pics like the one above for Life of Pi, there's a Tumblr of before pics: http://beforevfx.tumblr.com/

    I never knew any of this was going and and i gotta say I'm pretty pissed about it. These companies are making billions off of a succesful movie/franchise and yet the life blood of that movie, yet somehow the people that actually made it a reality are basically sweat shop workers is beyond appalling.

    Shame on those companies, seriously some government body or something should give them a giant ass smack down and get those people and those companies what should rightfully be theirs. I mean its ridiculous that company's that make these awesome movies that make so much money aren't even viable as businesses.

      seems to be the way of the world these days. the higher ups make all the big $$$ while the common folk get screwed over.

        It actually makes me sick, nothing wrong with running a business well but this is just appalling.

          well a business has to make money. thats the point but people get greedy and always want more and to get more they look to cut corners and screw people over.

    Damn, and I thought the videogame industry had it hard :(

    Wow, really opened my eyes. Hope VFX artists DO strike, grip the industry by it's balls and make everything happen THEIR way.

    Thank you for this article and bringing this issue to my attention. I had no idea.

    Truly amazing how a VFX dependant industry is destroying the very thing that sustains them.

    Being a construction worker I can sympathise with working away from home.

    That was a huge dick move to play Jaws theme during the VFX guy's speech.

    Just a quick note on the VFX always being at the bottom of the credits - the same always applies for the sound department. It's not so much a snub at the importance of the departments, but film credits tend to be organised in line with the actual production workflow. Key creatives and actors will always be billed first, then the production crews, then the post production crews. As both sound and VFX are literally the tail end of post production, they bring up the rear.
    On the surface it seems unfair but (and I'm speaking as a sound guy) it makes sense and avoids the appearance of favoritism.

    looks like our old friend marx was right when he said that market relations are build upon contradictions (big studios+vendors versus artists/workers) and are crisis-prone!

    good luck to the artists and their struggle to be properly rewarded for their effort!

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