Can the industry be saved here in the US? Of course it can. Lots of things can be done. The question is, what can a VFX house do to insure its existence for the long term? I've been interviewing lots of people, observing successful houses, and also failures. I've been pondering and scratching my head. With the downfall of Digital Domain, it's been a pretty depressing time, but a few things have become clear to me. Our industry must survive. Here's my take-away.
Plantec's Baker's Dozen Rules for the Long-Term Viability of American VFX Studios
1. Never take work you know you will lose money on. If your studio is that desperate, the rats are already running down the ropes. Start letting people go and resign before you file bankruptcy.
2. Never base your business model on doing the simply the "ordinary." That can be done faster, cheaper and maybe better in India, China, Korea, Yugoslavia…and the list goes on and on.
3. Find the right people to manage things. VFX people generally make lousy VFX studio managers. You need someone who knows the business, has a talent for management. He or she doesn't need to be nice, but they do need to treat people with respect and make good business decisions. Never let them make artistic decisions…it's not their job and they don't have the chops for it.
4. Only hire the very best, most productive and talented people you can get your hands on and give them as much job security as you can. This feeds on itself. As you get better and better projects and build a reputation, more of the best people will want to work for you.
5. Pay your people well…but not too well. Too many artists in this industry are used to getting extremely high pay and that needs to be curbed—a bit. Having a hundred people making a quarter million a year can kill a company. You certainly can't keep them around between jobs. Offer them a fair salary but remember that a great work environment and decent benefits often make up for a slightly less-than-rock-star paycheck.
6. Be fast and efficient. If you're doing TV right now you're ahead of the game…if you're doing feature work take a look at how the TV guys work. They're now doing feature-quality work in days instead of months. They have workflows and schedules that will blow your mind. They are the future.
7. Get subsidized. California is not the best place to base your operations. You can't compete without subsidies and California has none. This crazy international subsidy thing is twisting the industry all out of shape. You can't beat them, so join them. You need at least one leg in a subsidy location. It could be one of the States now offering interesting subsidy deals or in foreign countries, especially Canada.
8. Pick one area of VFX and do it better than any other studio. Get known for it. Create your own proprietary software that will do the job better than anyone else. In-house development teams seem a key to success, but not the whole answer. They're expensive, so be sure you're on the right track.
9. Avoid massive overhead. When you don't know where your next dollar is coming from (and VFX studios never do) it's best to stash a little for a rainy day and not spend it as fast as it comes in on fancy crap and luxury.
10. Be good to your employees. Feed them, give them great equipment, love them, treat them like they are valued and give them weekends off. All too often VFX people feel under appreciated because management never takes the time to voice appreciation. The best houses often do. Give random, earned bonuses…never give standard bonuses, they loose their effectiveness almost immediately. Always keep them a surprise. And be creative, don't just give money…give special things that are personally meaningful. Do not limit these incentives to top management. Take special care of your line people who actually do the work.
11. Stop looking at the Studios as the enemy. They need to make a profit: movies are expensive and they don't know how any one will do at the box office. Sure, they make windfalls when a film hits big, but then they also lose when expensive VFX movies without a story – Prometheus? – hit the dumps. They want to work with houses they KNOW will deliver outstanding product on time and in budget. But be firm and don't ever let them expand the scope without expanding the budget. This is a business, not a hobby. We're all here because we love it, but also because we need to make a living.
12. You need a star negotiator, your Executive Producer. This one is VERY important. It's one of the places so many smaller VFX studios screw up. Many of the people calling themselves Executive Producers in feature work and TV are just not qualified to do the work. Some are almost a joke – oh so wish-washy nice, and don't want to offend anyone. It takes a very special personality and savvy and experience to be a true Executive Producer at a VFX house. It should always be a title earned through stellar performance. He or she has to have balls of blue steel, know their opponents at the table, and negotiate with skill and craft beyond that of ordinary mortals. Great EP's are not easy to find. They are expensive and worth every penny. They are the ones who make sure you're overhead and profit margin on a job makes sense. They are not intimidated by the Studio negotiators. They are one important key to your studio remaining in business over the long term. I advise you to train your own from within if you can, but it helps to find one who is tough but smart. She can train the others.
13. Build a corporate culture. Make your people proud to work for THEIR studio…have a cool logo, brag rags and company bags, coffee cups and beer mugs. Have company picnics and other outings, sports teams. Let your studio be a proud part of your people's lives.
These are not difficult rules…finding a great EP is the hardest part. Developing your own software…ah…yeah…and learning to produce killer VFX in less and less time with each film cycle. O.K., none of it's easy, but you chose to be in this business. Make sure it IS a business and run it like one or you, too, will be looking back fondly on what could have been.
Here are my last two tips. Get to know your client-side VFX Sups personally. I know some are a little difficult, but most are good people with passions similar to your own. They have a tough job to do, and are often caught in the middle. So get to understand their job and do your best to make them look good. They will want to work with you again.
And very last, get rid of bad apples and dead wood. Make sure your people work well together. One toxic person can really screw up a production schedule and ruin the general happiness level. It's your job of know when someone is poisoning your company.
There is a lot of talk about forming a trade association of VFX Studios. Not a union, mind you; that would be for the artists. I'm looking into that and I'll write on that subject soon. In the mean time I recommend checking out Scott Ross's Blog on the subject at http://scottaross.com/ and you can read additional insight on this entire subject from my knowledgeable friend Bill Desowitz at Immersed in Movies at http://billdesowitz.com/.
Oh there is so much more, but use your head. We can't afford any more bad karma out there.
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Great Article Peter, I hope a lots of people will read this.
So Baron…you wanna job as my PR guy? I mean I can’t pay much, but I do make good cheese.
Well written Peter… Here we agree 100%
Ron, you make me smile. My daughter and I both learned a lot from you. I leaned Light Wave watching your old tapes! Thanks for the positive vote.
some good points, but no taking into account the fact that it is deliberate federal government policy to debase our currency and consistently reduce it’s purchasing power making it nearly impossible for companies to remain in the U.S. If the dollar continues to lose value (guaranteed), one thing is certain, eventually no visual effects work will be done in this country and that is tragic.
I’m not sure I get this point. In canada the exact opposite has been argued that a growing dollar vs the american dollar is hurting business as it raises the costs of everything a shop in canada does vs US. I think both points are way oversimplified.
Actually Shawn H, hits it on the head. The devaluation of the dollar actually vastly improves our US based studio’s ability to compete. And it hurts Canada’s. Where Canada has the edge is all the strong subsidies, which differ by Provence, btw.
Peter, the Baron once told me that you are a genius; I now understand why he has that opinion of you.
I’m going to have to start paying the Barron as my PR guy.
Smart rules for negotiating the bleeding edge of a tough industry. Thank you,
GRIDIRON Greg
Thanks GG. Things are changing so fast, I’ll have to do it again next year when all the rules change!
Very well written piece with plenty of good, common sense points Peter. Keep up the good work.
I was going to include my two cents worth half way down the page when you brought it to light (Individual Exceptional-ism within a team). Well written, concise, and worthy of the title ‘Executive Abstract’ for an in-depth treatise on VFX. Thank you.
Thanks Tír-Ná,
There is an in-depth story here, but my blog is too limited to tell it. With my series of blogs on this subject I hope to present enough of the picture and put forth enough wisdom on the issues that it will help. Wait till you see my Rules for Film Studios!
Most VFX shops including the major ones break rule #1. If studios didn’t break rule #1 there wouldn’t be any effects studios. VFX is a tough business because there are little to no barriers to entry. Which creates more supply than demand and brings the value down. A vfx shot will never be worth more tomorrow than it is today. Understand that concept and you will know why DD and so many other studios are closing down. It’s all very textbook but because it’s “art” and not plastic widgets we get emotional about it. VFX shops are image factories that are cool places to work. Image factories are no different from any other factory other than you have a little more input in the final product. The move to push work offshore will not slow down. The market will decide which US facilities will be left standing.
Perhaps I should not have said “never” and instead used the word “avoid” because let’s face it, VFX studios are not in the business of paying studios to do their VFX…but some do. Every once in a while it might make sense…but those legit times are extremely rare. Sure it’s done but the industry would be much stronger if it wasn’t. I’m pushing to make this a better, more solid and viable business. I believe I know of more than one studio that has never taken on a money loosing contract. But I’ll have to double check that.
Peter, this is all really obvious stuff, not to mention a bit idealized. Basically, you’re asking for a perfect world where a company can make all of this happen simultaneously. That would require a facility that is an exceptionally well oiled machine. The existing companies that come closest to this are owned by filmmakers or studios who have deep pockets and so allow the muscle necessary to pull off what you’re suggesting with clients/studios, but also the time required to design and build the kind of architecture and infrastructure needed. Even small, specialized houses need infrastructure to excel; they’re usually the ones who really can’t afford it. All VFX companies are filled with people, who know all of this already, and who have conflicting agendas and interests, or, put less cynically, simply different opinions on how to achieve it all. I actually happen to agree that the TV model might be valid, except that it just drives all schedules shorter and all budgets down, which ultimately isn’t good for anyone. Not to mention quality… which is sorely lacking anywhere from your list. Maybe you consider that an obvious part of your subtext, but without it, what’s the point? When people say “I hate CG,” what they’re saying is they hate CG that they can notice. The more quality drops, the more noticeable it becomes. Now, I think bitching without offering a solution is both pointless and rude, so here goes: we need to further distribute the workflow. Infrastructure needs to be created (and whoever does it right will go down in VFX history) to support artists working remotely and on project timelines, possibly even by the shot. As more and more artists enter the field, we will continue to become more and more of an interchangeable commodity than we even are now, so the staffing and workload needs to be made more fluid. That said, it’s hard enough to do 1600 shots on a film with everyone in the same building, much less all over the world. So we’ll see… but it can be done. I mean, by 2050, do you really think we’re all going to be commuting to a building 10-50 miles away?
No Bill…some companies are doing it and it is working for them. If it were so obvious, why isn’t everyone doing it? It would be a much more stable world if they did.
I shouldn’t have said a flat “no” to you Bill. Yore response is well considered and you make good points, but the fact is, this is not an idealized naive vision, it’s real, exists and these companies are thriving. Not all do all. But most do most of these “rules”.
“6. Be fast and efficient. If you’re doing TV right now you’re ahead of the game…if you’re doing feature work take a look at how the TV guys work. They’re now doing feature-quality work in days instead of months. They have workflows and schedules that will blow your mind. They are the future.”
No. They’re not doing 4K, stereo, 48fps, they’re not managing hundreds of shot that need a consistent look. This 6th point is completely misguided. They do good work, fast, but that workflow can’t scale. I speak from experience having worked in both.
Can’t agree with #7, since it’s one of the things IMO that’s threatening the long term viability of this industry in the first place. “You can’t beat them, so join them”. In the short term, that will help. But long term, I feel subsidies will lead to an industry that few of us will want to be a part of, unless you’re 20 years old, single, and/or willing to move to a new country every few months.
” Having a hundred people making a quarter million a year can kill a company”
Where the hell are those jobs? What company are you talking about? What re you smoking?
Top end companies have had many people making that much. I was using it as an for-instance-if example. These people are usually the first to go in a crisis, so alas we have few of them any more, but they still exist. I can’t say where because almost everything I know has been gained under non-disclosure. Some formal and others are on a handshake. It’s the only way I can get the big picture. No company is likely to have a hundred, but the very big ones could conceivably. IT would be interesting to see how many DD had.
It’s unlikely now, of course, which is what I suggest…don’t pay crazy wages, they’ll kill your company. But be fair, pay good wages. VFX artists give more than skill and talent, they give soul and spirit to the job.
I think it’s time people from the VFX industry in the US understand that VFX work done in India is cheaper than that in the US not because it’s ordinary or sub standard. But because of the skewed nature of international finance, the $ vs Rupee difference makes the cost appear low.
What a dollar fetches in the US and what Rs. 10 fetches in India are similar, yet the currency difference is Rs 56=$ 1.
Besides, we work 6 days a week and 12 hours a day, not because anyone forces us to, but because we enjoy it. We do have minimum wages, but they seem ridiculously low because of the currency difference. They’re pretty good otherwise.
If the $ somehow fell to even Rs 20 to the dollar, the entire Indian VFX industry would be out of work.
The US VFX needs to simply work harder, smarter, and find a good collaborator in India.
#11 – I’d like to write more here, but before I take the Next VFX job I so desperately need,I’m busy consulting a Seer about the Story / Box Office potential of the Property. I love it, It’s original & Genius ,but It may not put seats in the Theater so gonna Pass up that $12Mil we’ve been offered.
well…i think its pretty much a lie to say that vfx artist are paid extremely well. I know very good artist who are still making 20-25/hr and they’ve been in the industry at least 3-4 years. Companies are too cheap to spend on their artist.