Some Inconvenient VFX Industry Truths
For years the visual effects community has been muttering to itself that we should be unionized. The major hurdle with the unionization of visual effects artists is that we would need to gain support within the walls of the studios. Unfortunately the studios have long since written off our welfare. Instead they have agreed that it is better for them to spend the money to train foreign workers than to support American level lifestyles for digital artists. Expanding on this - corporations in general have decided that it is high time for the American middle class to compete on the global labor market with China, India, Mexico, Sri Lanka and a myriad of other countries whose workers struggle by (or not) on bare subsistence wages. Ross Perot was opposed to NAFTA saying the treaty was “the sound of American jobs being sucked away.” He looks like a prophet today.
Lee Stranahan in his blog (http://www.huffingtonpost.com/lee-stranahan/open-letter-to-james-came_b_451922.html) writes an open letter to James Cameron asking him to step in and help the visual effects community recoup some economic foothold in these times. All Lee seemed to be asking for was “please sir…more gruel…” Unfortunately I don’t believe that anything that Mr. Cameron might say could reverse a trend so broadly ensconced within American business or indeed global business. It is simply good business to take vast quantities of work offshore. Beyond the financial motives is the simple fact that many of these offshore companies produce excellent work. If the American worker could put forth the defense that WETA is incompetent we may be able to strengthen our position. However WETA, The Moving Picture Company and dozens of others are terrific talents and show no signs of flagging. I see no need to hold Mr. Cameron’s feet to the fire more than any other director or producer.
This goes way beyond the world of visual effects. Any idea of sentimentality on the part of large corporations is a complete folly. Lest we continue to delude ourselves any longer - corporations are comprised of individuals that make decisions that strengthen and further solidify their positions. There is no other master other than the bottom line. The only gain or loss is measured within their own personal lives and profit columns. They use a variety of tactics – lobbies, contributions to politicians, whatever necessary, etc. I wonder how much the health insurance industry paid Joe Lieberman to numb his conscience. Joe is looking out for Joe. Joe loves Joe. Self-serving politicians, financiers and “leaders of industry” coat their actions with patriotism and wrap them in religion to give it all a better smell but fundamentally they do not see themselves as middle-class Americans but world citizens. They can afford to live anywhere they wish. Going out for dinner or buying a new home or car doesn’t impact their lifestyle one iota.
They do not believe in compassion for the workers that labor for them or the people whose money they mishandle. Instead they gut and trim whatever they can from those under their auspices and build buildings with their own names on them. They fund charities with their names in the titles. They head charities dedicated to the welfare of unknown strangers at the expense of those to whom they are the most beholding. These too have their names on them. How did Michael Milken amass the fortune that allows for him to maintain a foundation in his name in Santa Monica? He simply decimated the retirement funds of thousands of families. Now that he has served his time (22 months) he generously gives the money stolen from thousands of individuals to different individuals from a building that has his name on it. With checks that have his name on them.
I’m probably not long in the world of journalism because the only way for a journalist in this environment to have access to heads of state is to avoid any inconvenient truths. It’s best to deny all the little stories that reach my ears so I don’t piss off some major player who keeps a Blackwater-sized army of lawyers with dagger-pointed fountain pens at the ready. Brooks Brothers Bullies. Recently a well-known visual effects group cut loose of one of its internal departments. Within the terms of the separation there was an agreed upon figure that each employee was to receive based on the duration of his or her service to the company. The figure that I’ve heard repeated many times was three thousand dollars per annum of service. This would have been a substantial boost to these guys who like all of us wonder where their next job will come from. Whatever you may think very few visual effects people are set for life. When the day came to sign the final separation contracts and the checks were to be handed over the company’s lawyers showed up with checks equal to one-tenth the agreed upon figure. So for example if you were expecting thirty thousand dollars for ten years of service, instead you were handed a check for three thousand dollars. The checks were affixed to the contracts that released the corporation from further exposure. The workers were essentially told to “take it or leave it” and “sign here.” Ball-point pens were extended. Paper marked. Dreams flattened. I don’t know how far this went up the chain. Perhaps the attorneys were exhibiting incentive. Perhaps management in whose name this deed was perpetrated has no idea this injustice occurred. Someday in the not so distant future all these reliable workers will be under the ground. Their struggles and fears extinguished and forgotten, but the buildings with the names on them will remain.
Printer-friendly version
Now we know who the sesnible one is here. Great post!
Hey, that post leaves me felenig foolish. Kudos to you!
Got it! Thanks a lot again for hpeling me out!
I work for a boutique style studio located in Montreal, Canada. We have been seeing a lot of studio closing in Canada lately as well. This seems to be affecting the entire industry. I must agree that I am also concerned with the treatment of artist's eveywhere and hope that something happens sooner or later to rectify the problem. I write more about the indusrty at my blog at Boogie Studio.
ThanksIn regards to incentives being employed in other states please see what film workers in New Mexico are saying:
Dear Richard
The New Mexico film incentives are not out of the woods, and you need to act now.
A Special Session of the Legislature is scheduled to start this Wednesday. There are at least two Legislators who are actively urging cuts to the incentives, and relying on long-disproven, random samplings of data to support their positions.
One of their key arguments: "Well, we've got a $100 million budget gap, and the incentives paid out $100 million last year, so let's cut the film program and that will even things out." It's just not that simple. $100 million out is a result of over $400 million in direct production spending in New Mexico.
All agree that these are lean times, and we need to work together to support the economy of the State. We in the film industry, and thousands more outside of it, know that film is an incredibly dynamic, profitable, and fiscally sound element of the New Mexico economy.
All of us need to quantify in personal and economic terms how film benefits our lives, and communicate that message right now. It's our job to help clear the air, provide some facts, and demonstrate with total clarity that film works for New Mexico.
The form letter below is just a suggestion for those short on time. We urge you to pen your own. Use facts, use numbers, tell your story, and show that it is the voters of this state - in and out of the film world - who want to keep the film incentives intact. Feel free to CC us on your email, as many of you often do. We also encourage you to contact their offices directly via phone.
We are a well organized, active and informed constituency. It's time to put that to work. By educating our elected officials and fellow residents, we help to secure our livelihood and continue to grow a key part of New Mexico's economy. And that's a win-win situation by any measure.
Act now.
Best wishes,
Daniel Taras
Founder
daniel@crewnewmexico.com
crewnewmexico.com
(505) 930-0443
Dear
I am a New Mexico resident employed in the film industry, and I ask for your support in opposing any attempts to cap or cut the incentive program. Film is an integral and important part of the New Mexico economy, and my livelihood.
While I understand there are difficult budget decisions to be made this session, the film program has proven time and again to be a successful economic engine in New Mexico. Tinkering with the incentive program would be a major blow to an industry that employs thousands, myself included.
I would like to ask that you please evaluate the significant impact your position would have on one of New Mexico's most productive and economically viable industries, and help maintain what makes up a core element of my life.
Respectfully,
SEND TO:
Steve Fischmann
NM Senator District 37
PO Box 2580
Mesilla Park, NM 88047
Capitol Phone: (505) 986-4377
Email: steve@stevefischmann.com
and
Rep. Joseph Cervantes
2610 South Espina
Las Cruces, NM 88001
Capitol Phone: (505) 986-4249
Office Phone: (575) 526-5600
Email: cervanteslaw@zianet.com
I’m astonished at your 60 to 70 percent tariff figures. Could you please state another source? Does this hold true for studios going into Canada? For a forty percent incentive the studios are charged sixty to seventy percent? They must be losing their shirts. As to your statement earlier that non-complaining PA’s work themselves up from PA’s to AD’s to directors is inconsistent with reality. Although some PA’s do work themselves into directing roles, the road to directing is generally not PA to AD to director. AD’s in general do not progress to be directors. A more usual path is from writer or editor to director. AD’s are largely administrative positions, not creative. As for your statement:” There’s nothing stopping any of you from building your own businesses.” I beg you to listen to the input on the site. All of the VFX houses that I’m in touch with are struggling at best and most of them are experiencing a significant cut in staffs in an attempt to keep their doors open. You only see a small percentage of the voices here. I get a load of emails from individuals who are undergoing crushing times and see no change in sight. It’s not going to get easier as the studios have made their decisions and the vast quantity of work will continue to go overseas. I’m not making this stuff up…I’m just acting as the voice of hundreds of US VFX worker. Yes…complaining will not change anything.
Film Production Tariffs.
Yes there are tariffs in place for corporations doing service work.
When a studio decides to film in Canada, a Production Studio is quickly set-up before filming commences. They hire staff on a temporary basis ( employing locals) for the duration of the project, and a few weeks after completion of the project, the production company is dissolved. Satellite studio tactic in effect.
Example: If a production company (incorporated) based in the Canada did service work for a USA client and didn't have an office in the USA, they would be hit with a 60-70 percent tariff on their billing. The higher the bill the higher the tariff. 60-70 percent of the total money owed stays in the USA, unless there is a local presence to keep that money circulating in the local economy.
Case in point: that's why a company like Mainframe (name at the time) had offices in Los Angeles. The majority of the service work was for USA clients. The high tariff hits incorporated entities.
The tax collectors don't care what type of work you do be it film, games, construction, they only care about how much money it generates and how much they can keep of it based on your tax entity status. (Self-employed, incorporated, Limited Liability Corporation, etc.)
In regards to film. As long as money is being made on an international basis and not restricted to a national basis, then it only makes sense, in my opinion, to have the buyers be able to be sellers of goods and services as well. Hollywood has a 90 percent hold on international box office receipts. 90 percent! Where's the rest of the competition? Being muscled out.
How many times has anyone seen a PA (Production Assistant) demand higher wages or better treatment on set?
I personally haven't seen a PA demand higher wages. I've witnessed a PA move to Assistant Director and then into Directing.
Complaining gets no results, doing does.
For those who live in America, there are many opportunities to start your own business, in any media.
Tariffs are already in place. That's why corporations use the tactic of setting up satellite studios in other parts of the world to bypass the amount of tariffs they will pay.
There's nothing stopping any of you from building your own businesses.
Rather than have the "bosses" spend a day in the "workers" shoes, how about the "workers" spend a day in the "bosses" shoes.
No limits as to what can be done.
We are all captains of our own ships.
Make something happen. Make your own movies, make your own games, write your own screenplays.
Thanks for your comment. From my understanding there is no tariff in place for film properties. That is to say the studios are not charged a fee for sending the work overseas. I am certainly open to information to the contrary if it can be produced. I don’t think the problem is that people are not starting their own VFX companies to compete. The opposite is true. But the more companies that start up the more the competition drives down the cost of VFX to the producer. The costs to generate VFX are still exceeding what the studios are willing to pay. Canada would be unable to compete if it weren't for the so-called incentives that kick back forty per cent or more of labor costs back to the studios. Currently there are large companies (that have smaller VFX companies under their banners) that are losing millions of dollars each year just to keep their doors open. Their hope is that eventually they will outlast the other companies. When their competition has succumbed they believe that they will be able to raise their rates to the point that they are once again profitable. Central to the issue of competition is the fact that starting your own VFX company has never been cheaper. On top of this if you have little or no personal overhead (single, living at home, no car, etc) you can afford to charge a lot less than a company that needs to provide wages, health benefits, comfortable environment, IT support, etc. to its employees. Despite the sound of whining this is just the state of the world and we’re all going to have to find some way to live with it.
TARIFFS
High tariffs are already in place for corporations that are not based in the USA. That's why you have Non-USA corporations with offices in the USA so as to reduce the amount of tariffs involved. And vice verse. You have USA corporations in Non-USA countries with offices there too.
Get in th game people. You live in a capitalist country, start operating like a capitalist.
LEss time complaining, more time doing. There's nothing stopping any of you from stating your own business. That's that's the opportunity in America to seize upon.
There are no limits, only the ones you put on yourselves.
All the best to you all.
Life's too short to just complain.
Post new comment