VFX Crossroads Pt. 2: Can The VFX Business Be Saved?
COW Library : TV & Movie Appreciation : Debra Kaufman : VFX Crossroads Pt. 2: Can The VFX Business Be Saved?
Once upon a time -- 30 years ago -- VFX artists were unionized.
If they still were, perhaps the conversation would have been different. But many VFX artists today don't even know that history, and in their anguished discussions today -- such as the recent VFX Town Hall -- the focus is on reinventing the past, with unionization, as well as creating a trade association to sit down with the studios to hammer out a new way to do business. Can anything be done to change this picture? Is it all too little too late?
The engine driving these huge tentpole VFX-heavy movies is the billions of dollars in ticket sales to be had, from global audiences. If every VFX artist still had a union card and the facilities bonded together, what's to keep studios from continuing to exploit tax incentives and subsidies found in nearly every state in the union and numerous foreign countries? Why would the studios give up the cheaper labor costs found in India, China and other nations? Does the fate of the U.S.-based VFX industry figure in to the studios' decision-making? You can draw your own conclusions from recent events.
He explained his metaphor to Creative COW: "The non-profit entities of the motion picture industry functionally resemble a tripod," he said. "This icon of our industry symbolizes strength and stability but derives its steadying influence from the necessary 'adversarial tension' of its three legs: 1) the honorary societies (AMPAS, VES, ASC, etc.) emphasize professional excellence; 2) the guilds and unions (IATSE, ICG, SAG/AFTRA, etc.) emphasize personal welfare; and 3) the trade associations (MPAA, NATO, etc.) emphasize commercial viability."
"What is clear in the case of visual effects is that, while we do have the VES component and the field is demonstrably 'excellent,' absent the stabilizing influence of the union and trade association legs of the tripod, the VFX industry is unstable and collapsing," he continues. "To the extent that globalization and inter-state economic warfare compromise or destroy the balance provided by existing tripods, the whole industry may well follow suit. To throw in another metaphor, VFX may turn out to be the 'canary in the coal mine'."
VES: THE HONORARY SOCIETY
Although it might seem odd to create an honorary organization before a union or trade association to protect companies and members (I know I did at the time), it makes some sense with visual effects, a part of the filmmaking process that gets little respect.
"That all goes to the anger and upset," says VES president Jeff Okun (Blood Diamond, Fantastic Four, Clash Of The Titans). "VFX people are not respected for their artistry. We're perceived as nerdy techs who push buttons and bring nothing to the game...that computers do it."
The Human Torch (Chris Evans) flies above the streets of New York City -- a comet of flame -- in "The Fantastic Four." ©Twentieth Century Fox.
The Visual Effects Society, founded in 1997, is today comprised of 2,600+ members. On its website, the VES describes its mission: to advance and promote the art and science of visual effects and to foster and strive for excellence and knowledge in all matters pertaining to visual effects, and for the purpose of bringing together those leaders and innovators in the field who have demonstrated a high standard of artistic and technical ability and whose singular achievements entitle them to Membership.
The VES was never intended to be a union or trade association, not to advocate or participate in the creation of either organization, and the timing of its founding is a good indication why. In 1997, digital VFX was in its boom days and, many if not most visual effects artists felt no need for a union (more on this below).
At the time, I scratched my head as to why a new group of film/TV workers didn't want to join an already unionized ecosystem, but in retrospect, I understand why: VFX artists and companies wanted to be acknowledged as artists, not button pushers, and wanted to change how the film/TV industry viewed the craft of visual effects. In some ways, the VES did just that, with an annual awards show honoring the best VFX of the year.
The irony was that circumstances would conspire to do the exact opposite of what the VES promised: create a perception that digital VFX were a commodity, not an art. That would have been a tricky thing to see at the time, and more recently the Visual Effects Society has drawn attention to this issue. In response to more recent unrest, the VES published an open letter outlining some of the woes of the industry, and proclaiming that although "VES may not have the power of collective bargaining, but we do have the power of a voice that's 2,400 artists strong in 23 countries -- and the VES Board of Directors has decided that now is the time to use it. We are the only viable organization that can speak to the needs and concerns of everyone involved in VFX to meet the challenges of a changing global industry and our place within it."
To that purpose, the VES has said it will call a Congress to discuss the issues and issued a Visual Effects Bill of Rights. To me, the VES is really hamstrung by its own mission statement. It was founded as an honorary organization, and -- for better or worse -- deliberately eschewed collective bargaining or any of the other tools that could have given it teeth. Executive Director Eric Roth reminded me that the VES has "no official position" on either unions or trade associations.
THE TRADE ASSOCIATION
Perhaps nothing would be more difficult to form in a fiercely competitive business than a trade organization. When he was General Manager of Industrial Light + Magic, Scott Ross (Terminator 2, I Robot, Interview With A Vampire) found that out first-hand when he attempted to create a trade association in 1989. "When I got to ILM, I was shocked that the industry didn't have a trade association," he says. "I put together a group, the Association of Visual Effects Creators or AVEC, which means "with" in French. We pulled together a couple of meetings, with Dream Quest Images, Boss and ILM, but everyone was so paranoid. We couldn't even sit around a table and have a meeting because there was such distrust and dislike." The attempt broke apart after the second meeting.
Will Smith in I, Robot. ©20th Century Fox.
Ross, who was involved in the early days of the VES but later left, says the obstacle to starting a trade association is fear. "Everyone is afraid," he says. "They [the VFX studio executives] ere afraid to go to the studios and say, This isn't cutting it, because they were afraid of being blackballed. The industry was based in fear and the competition is my enemy, the director is my friend, and I'll do anything for the studio."
Bill Taylor, ASC (The Bourne Identity, Serenity, Milk), who headed up Illusion Arts, also remembers this era. "Ten years ago, we needed to form a visual effects trade association and it almost happened," he says. "But none of the actors could get together. They were all paranoid about letting the competition know their procedures. It would have helped a lot." He'd still like to see a trade organization formed but admits "it's getting harder and harder, no question."
He notes that one of the tricky aspects of starting a trade association was the fear of being perceived as colluding over prices. "We didn't have those conversation but anytime a group of organizations get together to talk about change, you have to be aware of those types of positioning," he says. He also pointed to the hyper-competition as a factor standing in the way of organizing a trade association. "Somebody in the meeting said, 'Listen, we all get along great when we're in the same room together, but as soon as we're out in the streets, we'll bite each other's heads off.'
"And that's true," he continues. People did whatever they needed to do to keep their own stability. I don't think it's intentional or malicious by any one company or studio. It's just business. Studios are in the business to get the best product for the least amount of money, and our job is trying to get the most work we can for the most amount of money. When those things collide, there will always be competition, which forces prices down."
As far as I know, there have been no other attempts to form a trade association. Will one ever be formed? Ross isn't sanguine. "Based on the history of the way the industry has acted, I'd say that it won't happen," he says. "My hope is that it will change, that we've reached some tipping point. Until someone has the power to address the industry's problems -- either as a trade association or a union -- nothing will change. We can all scream we're made as hell, but you need someone from a position of power representing the workforce or the companies that has strength, power and legitimacy."
At the same time, he's back in the game in a second attempt to start a trade association, which he feels should take place first, before unionization of the workers. At the VFX Town Hall held on March 14, Ross reported that he had sent invitations to 15 "major" facilities to meet and gotten responses from all of those except those in the U.K. He promised to report back on progress made on this front.
But the emergence of a trade association is not going to be easy. As times grow increasingly tougher for VFX houses to stay afloat, there's both more and less reason than ever for them to bond together. "The studios don't want a trade association," says Phil Feiner, former CEO of Pacific Title & Art. "I just don't see all these desperate companies wanting to stand up for a trade organization. It's big business and it's big dollars. I'm for anything that will accomplish it, but I don't think a trade association alone will do it. We're long in the tooth but late in the game."
Is it possible to achieve fair business practices after so many years of embracing a dysfunctional business model? Can VFX companies adopt fair treatment towards employees when they are struggling to stay alive? The answer on many peoples' lips is: Union!
UNION AND DISUNION
Would it surprise you to learn that, at one time, nearly all the visual effects people in Hollywood belonged to a union? According to Steven Poster, ASC, President of the International Cinematographers Guild (ICG) Local 600, photochemical optical cameramen belonged to his local. Likewise, artists who did matte paintings, miniatures and other VFX work belonged to their respective unions and guilds. As digital effects came on the scene, some of the first VFX houses to adopt them came out of this hands-on, analog world and, thus, were still unionized.
Without a doubt, unionization remains the most contentious leg of the tripod. With the demise of Rhythm & Hues, we've heard loud calls for unionization again. Up until now, we've considered the VFX companies, their business strategies (or lack thereof) and their uneasy relationship with the studios. Nowhere in this equation are the VFX artists who make up the backbone of the industry.
Many, many visual effects artists -- in the U.S. and elsewhere -- work insane hours (when they're employed), get no overtime and no benefits including healthcare. Although they may make good wages, when the paycheck is divided by the actual hours worked, the hourly rate can be less than impressive. Visual effects artists are often doubly punished for overtime: if the studio needs the job completed faster, artists pull unpaid all-nighters, bringing the job in early. For their efforts, they're laid off early, thus deprived of the income that a longer job would have meant.
As Fulle points out, visual effects artists are a nomadic group, moving from project to project. Many, many VFX artists are nomads, moving from project to project and being paid by 1099s as individual contractors responsible for paying their own taxes. These so-called perma-lancers believe that, since they are not employees, they don't have the status to ask for union representation. Animation Guild organizer Steven Kapan disagrees, saying that if a VFX artist works in the facility, using that facility's equipment and keeps regular hours, that person fulfills the definition of employee. But how many perma-lancers know that?
The conditions, it would seem, are ripe for massive unionization efforts and yet Animation Guild labor organizer Steven Kaplan says that very few people have signed and sent in cards to be represented by a union. "Considering that 500 people marched up and down Hollywood...we only got 1 percent of those," says Kaplan, who later reported that a new online effort has led to more people asking for information. "Is it that people don't know? Or are they afraid?"
Founder/owner Richard Edlund, ASC set up Boss Film Studios as a union shop in 1983 to do Ghostbusters. Photo courtesy Columbia Pictures.
That could be one reason why the Animation Guild, which is seeking to represent VFX artists, isn't seeing lots of signed cards. It's easy to replace your Facebook photo with a green square, notes Kaplan, harder to stand up and be counted. "No one is ready to fight," he says. "And the first few contracts will be a fight. If you look at the history of labor, you see that it does take a bloody nose. True change is when the trade association, with the support of the union, sits in a meeting with the studio."
It's instructive to look at what happened to previously unionized VFX facilities who split from the union at some point in their transition to fully digital studios. "I set up Boss Film Studios as a union shop to do Ghostbusters," says founder/owner Richard Edlund, ASC. "The model shop guys and the VFX guys were in Local 40. At a certain point, when Dream Quest Images moved outside the 50-mile radius and they were non-union, I just threw my hands up. So when our contract was up, we decided not to renew."
As these union affiliations disappeared, nobody in the fledgling digital VFX industry advocated for renewing or creating union ties. Several factors played into this. First, the environment for unions has been unfriendly. Since the heyday of union membership in the 1950s in the U.S., membership has trended downward. From the 1954 peak of nearly 35% of workers unionized, The New York Times reported in January 2013 that membership is now 11.3% nationwide, a 97-year low.
The VFX artists were also not ripe candidates for recruiting. Rather than coming from the traditional film/TV guilds and unions, most VFX artists were college educated with a background in technology, computers, and art. They had no collective experience or background in the idea of a union. As professionals, they were paid well; they had no way of seeing into the future and knowing that they would need collective bargaining in 10 to 15 years.
In fact, there was a cultural disconnect between the IA unions and VFX artists. "Most of the men and women who work in VFX were young and highly educated and they looked at the union, particularly the IATSE, as their father's union," says Ross. "And they didn't want to be a part of it."
"The IA has had a difficult walk over the years," he continues. "On one hand, they want to represent the VFX community, but they don't understand the animal. They'll throw a mixer at a bar with velvet paintings on the wall, and the VFX guys will ask, where's your website? Where are the digital people? There was such a gap generationally and a gap between who the IA was and how they worked versus who these young artists were and how they worked. The men and women of the VFX industry never saw a kindred spirit in the IA."
It's no longer 1998 or even 2002, when a U.S. union of digital effects artists made sense. "The business is now global, and any union or trade organization that would have muscle would have to be global. "We need a union," says Okun. "Sadly we need a worldwide union and a worldwide trade organization and that will never happen."
At the Animation Guild organizing office, Kaplan and his colleagues are counting signed cards but the bar is high. "With a strong amount of support -- typically 65 to 70 percent support -- we approach the studio and begin to gain recognition," he says. "The artist has to be he one to initiate the card signing."
THE CHICKEN AND THE EGG
Which comes first: the trade association or the union? Although neither one exists at the moment, that question is central to the contentious discussions going on now within the VFX community. "I understand why people are angry and frustrated, but from my perspective, a union won't help," says Barnes, who is now an independent VFX executive. "It'll drive whatever jobs are left out of the state [California]."
Many industry players agree with Barnes, noting that because of the dysfunction impacting the business of VFX -- the VFX companies are not financially prepared to pay workers the money and benefits that unionization would bring. Ross made the same point at the VFX Town Hall, which was filled with many angry and frustrated workers.
"I support a Guild or a union for the VFX industry," says Ross. "But, and here's my big "but" -- it's in the timing. You are going to sign cards to organize VFX facilities, and they make no money. They do not make money, and a lot of the abuses that have happened towards their artists is because they are drowning and want to keep their heads above water. I have run a union shop and a non-union shop -- and union shops cost more money."
That unions cost facility owners more money is another bone of contention between union representatives and facility owners...but it's a moot point until enough VFX artists sign cards to begin the unionization process. "We have to go to the studios and say the business model we've worked on for the past 25 years doesn't work," Ross continued. "The VFX companies need to make a profit to afford treating employees well." But then again, all those VFX artists who are frustrated and angry don't want to wait. It remains to be seen if they're angst turns into signed union representation cards.
More than one person has said they would rather not focus on the struggle for a union, but back it up a few steps to the specific improvements they'd like to see. Fulle expresses the ambivalence that many VFX artists have about the idea of joining a union: "I think that what we need is very simple: how to have portable health benefits and stop overtime abuse," says Fulle, who also decries the inappropriate use of 1099s, which turns many artists into perma-lancers. "Those are the two things I think people are looking to the union for. But there must be a way to achieve these two goals, without the overhead and politics that come with a union."
The Abyss (1989) 20TH CENTURY FOX from BusinessWeek's Hollywood's Money Machine: James Cameron
IN THE END
As the VFX community debates its options, it would do well to place their struggles within the context of what's going on in filmmaking. We're past the early days of digital effects, when facilities and artists were rare specialists. The number of people around the globe offering VFX solutions has proliferated beyond anyone's wildest imagination. For VFX facilities and VFX artists alike, it's no longer a seller's market.
Barnes points out that there's an imbalance between supply and demand. "In the old days when we first started, in the late 1980s, early 1990s, there weren't a lot of us doing this stuff and we had more flexibility with the pricing structure and we were all trying to figure it out," says Barnes. "Now there is some crazy number of VFX facilities worldwide and not enough product to support all those vendors. It's a supply and demand issue."
Could a trade association and a union positively impact the industry -- at least in the U.S.? Possibly. Ross enumerates the changes he'd like to see: bidding templates, a standardized contract, education about VFX for directors and a public relations push to get consumers to understand how VFX are made.
But the clock is ticking, as VFX facilities around the globe become more sophisticated and capable, eventually leveling the playing field with higher priced facilities from Los Angeles to London. If the studios tread water for a few more years, the VFX community in North America (at least) risks losing any remaining leverage it has. Though many U.S. states and at least a couple Canadian provinces are finding that film subsidies are a losing proposition, there are enough places in North American enjoying the revenues that film production can bring to give it up.
Subsidies and tax incentives tilt the playing field, and many in the industry would like to see an end to them. Gene Warren Jr. of Fantasy II Film Effects (Hellboy, The Abyss, CSI:NY) talked at the VFX Town Hall about his long, unsuccessful effort to get film/TV subsidies declared illegal. But he hasn't given up on, noting that VFX Solider has hired a lawyer to look into ending subsidies. He encouraged attendees to contribute to that campaign. "Subsidies have become part of the business model for producers to go to a state or province, ask how much they'll get, and then go down the block and tell the next one what they're being offered," he said. "If I were to do this as a business and give you a kickback, I'd go to jail. The banksters who own the studios are getting free money and they won't change the law or enforce the law against themselves until they have to. It's a horrible race to the bottom and it's time to put an end to it."
But nobody can stop the globalization of the VFX industry, another obstacle towards changing the VFX equation. VFX artists are trying mightily to come to their own rescue, like the superheroes they often depict in their work. If the VFX industry does nothing, many more companies and artists' lives will be disrupted. The problem is that, even if they do something, the result might be the same. That shouldn't stop anyone from trying.
[Editor's note: Among Jonathan Erdland's replies to Debra Kaufman's follow-up questions for this article was the following email, which he has given us permission to share here.]