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Photographer
Stecyk
Posts: 297
Calgary, Alberta, Canada


Wall Street Journal Tweeted:

"Free to read: Despite demand, the business of creating visual effects is getting less profitable. http://t.co/rpE8jdV79X "

This article pertains to the movie industry. However, I with dSLRs now capable of shooting video, I suspect some people are broadening their skills to work on both still and video imaging. So if the topic interests you, have a read.
Feb 23 13 04:28 pm  Link  Quote 
Photographer
Ruben Vasquez
Posts: 3,088
Puyallup, Washington, US


Seems like all industries are taking a dive lately but from sounds of it, they only made it worse on themselves by making poor business decisions.

I'm considering dabbling in video a little bit myself but I'm thinking 3d is the way to go these days. We'll see...
Feb 23 13 05:28 pm  Link  Quote 
Photographer
NothingIsRealButTheGirl
Posts: 31,986
Los Angeles, California, US


Winner - Best VFX
Life of Pi

Bill Westenhofer, Guillaume Rocheron, Erik-Jan De Boer and Donald R. Elliott

...meanwhile R&H is bankrupt.
Feb 24 13 09:47 pm  Link  Quote 
Retoucher
George Thomson
Posts: 698
Concord, California, US


sounds like this is the case only for US companies

looks like the Canadian ones are alive and kicking: http://www.3dcanada.ca/r-cgcompanies.html

and so are the ones in London, like Double Negative


I guess that's the price US companies have to pay for the overly paid union workers and the new options producers have due to market globalization... they are just not competitive enough.
Feb 25 13 01:50 am  Link  Quote 
Photographer
NothingIsRealButTheGirl
Posts: 31,986
Los Angeles, California, US


Photon Mayhem wrote:
I guess that's the price US companies have to pay for the overly paid union workers and the new options producers have due to market globalization... they are just not competitive enough.

The "new options" are mainly that the countries you mention subsidize the work.

http://articles.latimes.com/2012/dec/21 … t-20121221

And what VFX people are unionized?

Feb 25 13 08:38 am  Link  Quote 
Retoucher
George Thomson
Posts: 698
Concord, California, US


The Space Cowboy wrote:

The "new options" are mainly that the countries you mention subsidize the work.

http://articles.latimes.com/2012/dec/21 … t-20121221

And what VFX people are unionized?

didn't they do it?
http://articles.latimes.com/2012/apr/20 … s-20120420

"Effects companies based in London; Vancouver, Canada; or Mumbai can take advantage of tax credits and cheap labor to underbid California-based firms. At least half a dozen California companies have shut their doors in recent years, pushing hundreds of visual effects artists out of jobs that pay $75,000 to $150,000 a year."

if you think that the tax-credit is the main driver for those choices you are just putting a spin on the situation.

the USD is extremely overvalued, and you will get the same work done abroad for a fraction of the cost (never mind the tax-savings).

Feb 25 13 12:17 pm  Link  Quote 
Photographer
NothingIsRealButTheGirl
Posts: 31,986
Los Angeles, California, US


Photon Mayhem wrote:
didn't they do it?
http://articles.latimes.com/2012/apr/20 … s-20120420

Did they? That's not what I'm reading from the article.

Tell you what. Howsabout I call Sari and ask her if she's in a union? I worked with her for several years.

Feb 25 13 12:33 pm  Link  Quote 
Photographer
Smedley Whiplash
Posts: 17,242
Billings, Montana, US


The problem, IMO, is that the effects are mated to bad or non-existent writing... as if the effects alone can make up for a lack of a good script, but they can't.... then the show flops, and the money isn't there.

The first rule of thumb should be: tell a good story
and the second should be: if your story is weak, don't waste time/money on CGI effects.

Surely there must be some financial ratio for production costs that they can use to predict a reasonable return for their efforts?

I listened to a replay of an old interview with Schwarzenegger the other day (old Howard Stern), and he was talking about making the show Kindergarten Cop, saying they all agreed to keep costs down by not contracting the final payouts before the movie came out. In a show like that, with virtually no special effects, you could easily do good business even with average sales.... but with a show that relies heavily on special effects, either your costs of production are through the roof, or.... in the case of a mediocre movie, the sales generated don't equal the costs of production, and people end up bankrupt.
Feb 25 13 01:23 pm  Link  Quote 
Retoucher
George Thomson
Posts: 698
Concord, California, US


The Space Cowboy wrote:
Did they? That's not what I'm reading from the article.

Tell you what. Howsabout I call Sari and ask her if she's in a union? I worked with her for several years.

Since the article is about a year old, I was just asking a question.
Ask Sari and let us know.

But you can't expect to pay 150k$ a year per artist and compete with companies that pay a fraction of that (again, not talking about tax-savings).

It looks like there are market corrections, as I see a lead vfx positions in Ca right now is about 60K. However still far from the 10K salary in India. (keep in mind this is not exploitation, as the cost of living is much different)

I'm curious... ask Sari what's the average salary in US for vfx artist.

Feb 25 13 01:50 pm  Link  Quote 
Photographer
NothingIsRealButTheGirl
Posts: 31,986
Los Angeles, California, US


I've hired hundreds of VFX artists in every decade since the 80s and the going rate is not $150 K

I'd say the day of the $3000/week moderately skilled animator ended in the mid 90s

----------------------

Just heard this podcast on kcrw today...

http://www.kcrw.com/etc/programs/tb/tb1 … ry_in_trou
Feb 25 13 02:15 pm  Link  Quote 
Retoucher
George Thomson
Posts: 698
Concord, California, US


btw, it looks like they didn't unionize after all:
http://www.theverge.com/2013/2/25/40280 … -hollywood

still it didn't explain the high wages which I quoted above.

I guess someone who got hired at 150k should accept pretty large cut, which I doubt will happen.
After all those people are not on contracts per project.
Feb 25 13 03:50 pm  Link  Quote 
Photographer
NothingIsRealButTheGirl
Posts: 31,986
Los Angeles, California, US


Photon Mayhem wrote:
btw, it looks like they didn't unionize after all:
http://www.theverge.com/2013/2/25/40280 … -hollywood

still it didn't explain the high wages which I quoted above.

I guess someone who got hired at 150k should accept pretty large cut, which I doubt will happen.
After all those people are not on contracts per project.

It also doesn't explain how Vancouver competes with Mumbai, unless Canadians are making 10K a year as well.

Feb 25 13 04:24 pm  Link  Quote 
Retoucher
George Thomson
Posts: 698
Concord, California, US


The Space Cowboy wrote:
It also doesn't explain how Vancouver competes with Mumbai, unless Canadians are making 10K a year as well.

I heard that producing in Canada is much more... pleasant. The grips, gaffers, loaders, etc are much nicer to work with... smile  but nothing specific to the VFX.

for VFX, 2-3 years ago "an entry level workers frequently are held to $1,100 a week", so let's say it's about the same.

no sane company will move their offices to another country (which some US companies did) for a tax incentive which may change in a year.

I think the tax-incentive in Canada is 25%, however in California is 20-25%... so let's call it the same, so this can't be the reason.


http://www.film.ca.gov/Incentives.htm

To apply for the California Film and Television Incentive Program, a "qualified motion picture" must be one of the following:

(Eligible for 20% Tax Credit):

Feature Films ($1 million minimum - $75 million maximum production budget)
Movies of the Week or Miniseries ($500,000 minimum production budget)
New television series licensed for original distribution on basic cable ($1 million minimum budget; one-half hour shows and other exclusions apply)

(Eligible for 25% Tax Credit):

A television series, without regard to episode length, that filmed all of its prior seasons outside of California.
An "independent film" ($1 million total production budget - $10 million qualified expenditure budget that is produced by a company that is not publicly traded and that publicly traded companies do not own more that 25% of the producing company.)

Feb 25 13 05:23 pm  Link  Quote 
Photographer
NothingIsRealButTheGirl
Posts: 31,986
Los Angeles, California, US


Photon Mayhem wrote:
I think the tax-incentive in Canada is 25%, however in California is 20-25%... so let's call it the same, so this can't be the reason.

Are you in the Visual Effects Society?

Did you get the letter today from Jeff Okun?

"There are many issues on the table and none of them are simple.  Take incentives offered by various states and countries – they distort the marketplace, but obviously they are good for some people because they keep being created and renewed and used.  If California expanded its incentives, a great many people might not be as angry and frustrated – they might be employed and achieve greater job security.

So, should the VES lead a call to action on this?  How, as a global Society, can we do this without offending some members elsewhere?  After thinking long and hard on this I believe the best answer might be that maybe we should.  It is a thorny issue and will upset members somewhere if we do it and others if we don’t.  And the issue of actually getting the state to offer a meaningful and competitive incentive is not an easy thing to accomplish either – So expect to hear more from us very soon on this."

Here is the letter in its entirety

http://www.awn.com/news/visual-effects/ … fx-protest

Feb 25 13 05:30 pm  Link  Quote 
Photographer
NothingIsRealButTheGirl
Posts: 31,986
Los Angeles, California, US


Also did you see how the true extent of the New Zealand labor and tax law deals is actually a secret from the NZ citizens themselves?

I'm on my phone right now but I'll dig up a link later.
Feb 25 13 06:05 pm  Link  Quote 
Retoucher
George Thomson
Posts: 698
Concord, California, US


The Space Cowboy wrote:
Are you in the Visual Effects Society?

Did you get the letter today from Jeff Okun?

"There are many issues on the table and none of them are simple.  Take incentives offered by various states and countries – they distort the marketplace, but obviously they are good for some people because they keep being created and renewed and used.  If California expanded its incentives, a great many people might not be as angry and frustrated – they might be employed and achieve greater job security.

So, should the VES lead a call to action on this?  How, as a global Society, can we do this without offending some members elsewhere?  After thinking long and hard on this I believe the best answer might be that maybe we should.  It is a thorny issue and will upset members somewhere if we do it and others if we don’t.  And the issue of actually getting the state to offer a meaningful and competitive incentive is not an easy thing to accomplish either – So expect to hear more from us very soon on this."

Here is the letter in its entirety

http://www.awn.com/news/visual-effects/ … fx-protest

I'm not sure where they want to expand the incentives. The movie gets the 25% tax-incentive and the producers choose how to spend their resources.
I just checked, in BC for foreign production the tax-incentive is 33% (a bit higher), if you are doing just the VFX it's 18%. (for domestic productions is about 25%)
http://www.bcfilmcommission.com/product … les/53.php

I understand his anger, but... those are just "angry words" towards a changing industry and even BC studios will be more or less in the same boat (as Pi - pun intended), as globalization allows for more efficient productions, and the overvalued USD$ (and probably the CDN$) puts all US productions at a disadvantage.

Do you think something will change if they match the 33% incentive that BC gives? or maybe 50%?...  for how long do you think this business model will hold?

They need to change their whole business plan, and to hold water it will have to be in a way that most won't like.

ps. don't know about New Zealand. One of my citizenships is Canadian, although I haven't been back there in a few years. (right now i'm in EU)

Feb 25 13 06:14 pm  Link  Quote 
Photographer
NothingIsRealButTheGirl
Posts: 31,986
Los Angeles, California, US


Again, you keep citing figures as if you know what they are. The figures are unpublished. The publicly published figures are not the ones in effect.
Feb 25 13 06:28 pm  Link  Quote 
Photographer
NothingIsRealButTheGirl
Posts: 31,986
Los Angeles, California, US


I just bought a bunch of wallpaper at $60 a roll from a British company. I notice they sell it domestically for £18 a roll. Why was it impossible for me to get that price?
Feb 25 13 06:35 pm  Link  Quote 
Retoucher
George Thomson
Posts: 698
Concord, California, US


The Space Cowboy wrote:
Again, you keep citing figures as if you know what they are. The figures are unpublished. The publicly published figures are not the ones in effect.

--------

I just bought a bunch of wallpaper at $60 a roll from a British company. I notice they sell it domestically for £18 a roll. Why was it impossible for me to get that price?

public spending is subject to official records in Canada, so yes - those figures are from the official BC site and are correct.  (so are the ones given by the California government)

to help you with your math:
18 British pounds = 27 USD$, add US import duties, delivery 25$ .. etc..

I'm not saying you shouldn't protest... I'm just saying it is pointless and the solution should come from change in the business model of the industry (and no additional subsidies will make any difference in a few years)

gotto go smile
good luck

Feb 25 13 07:28 pm  Link  Quote 
Photographer
NothingIsRealButTheGirl
Posts: 31,986
Los Angeles, California, US


Photon Mayhem wrote:
public spending is subject to official records in Canada, so yes - those figures are from the official BC site and are correct.  (so are the ones given by the California government)

Um, yes.

But actually no.

"Hobbit producers to New Zealand: if you tell people how we got our sweet tax/labor deal, no one will want to make movies in your country"

http://boingboing.net/2013/02/07/hobbit … ealan.html

It would be improbable that this is unique to NZ

Feb 25 13 08:17 pm  Link  Quote 
Retoucher
George Thomson
Posts: 698
Concord, California, US


The Space Cowboy wrote:
Um, yes.

But actually no.

"Hobbit producers to New Zealand: if you tell people how we got our sweet tax/labor deal, no one will want to make movies in your country"

http://boingboing.net/2013/02/07/hobbit … ealan.html

It would be improbable that this is unique to NZ

As I said, I can't speak about NZ, however even in the article it's clear that this was a special case.

still it's all on the record:
"The Government secured the three movies by changing employment laws and beefing up the tax rebate sweetener for the productions, resulting in an additional $25 million in incentives for Warner Bros."
http://www.nzherald.co.nz/nz/news/artic … d=10864146

"New Zealand grants approximately 15% in rebates for production and special effects work, which suggests a total budget for each film of around $250 million, using the studio figure."
http://www.the-numbers.com/movies/2012/HOBIT.php

so if before the changes in the Law in NZ it was 15%, compared to the 25% in California, and 30% in BC... so in this case for them was (15% + 25mil).
and did it really matter for the industry as a whole?

I'm not sure what you actually think happens.. they make it for free? smile

In reality even getting the max tax-credits by law is not easy.

Feb 26 13 03:05 am  Link  Quote 
Photographer
NothingIsRealButTheGirl
Posts: 31,986
Los Angeles, California, US


Photon Mayhem wrote:
As I said, I can't speak about NZ, however even in the article it's clear that this was a special case.

still it's all on the record:
"The Government secured the three movies by changing employment laws and beefing up the tax rebate sweetener for the productions, resulting in an additional $25 million in incentives for Warner Bros."
http://www.nzherald.co.nz/nz/news/artic … d=10864146

"New Zealand grants approximately 15% in rebates for production and special effects work, which suggests a total budget for each film of around $250 million, using the studio figure."
http://www.the-numbers.com/movies/2012/HOBIT.php

so if before the changes in the Law in NZ it was 15%, compared to the 25% in California, and 30% in BC... so in this case for them was (15% + 25mil).
and did it really matter for the industry as a whole?

I'm not sure what you actually think happens.. they make it for free? smile

In reality even getting the max tax-credits by law is not easy.

It's a special case, but they changed the laws and it's all on the record.

And studios go to India because the labor is cheap, except when they go to Canada because the extra politeness is worth the price.

Ok. Got it.

------------

Incidentally...

California allocates $100 million yearly … which meets the needs of only about 20% of the work that would stay in California otherwise.

For comparison purposes, New York caps its program at $420 million yearly and both Louisiana and Georgia are uncapped in the amount of incentives they offer)

http://www.studiodaily.com/2013/02/ves- … to-action/

So even if the published percentages are accurate they don't tell the full story.

Feb 26 13 08:36 am  Link  Quote 
Photographer
Peter Claver
Posts: 26,657
Toronto, Ontario, Canada


.
Feb 26 13 07:47 pm  Link  Quote 
Retoucher
George Thomson
Posts: 698
Concord, California, US


The Space Cowboy wrote:
It's a special case, but they changed the laws and it's all on the record.

And studios go to India because the labor is cheap, except when they go to Canada because the extra politeness is worth the price.

Ok. Got it.

------------

Incidentally...

California allocates $100 million yearly … which meets the needs of only about 20% of the work that would stay in California otherwise.

For comparison purposes, New York caps its program at $420 million yearly and both Louisiana and Georgia are uncapped in the amount of incentives they offer)

http://www.studiodaily.com/2013/02/ves- … to-action/

So even if the published percentages are accurate they don't tell the full story.

don't forget the Federal Incentives (which are on top of the states'): http://www.film.ca.gov/res/docs/pdf/Sec … 2-4-08.pdf

and things like the local incentives, as if you shoot in San Francisco you get additional incentives...
http://filmsf.org/index.aspx?page=46

sorry... still doesn't add up that other's incentives are to blame for the problem in US when it comes to VFX.

but I see that California needs far more than 100mil. for incentives:
"            expenditures of $1.1 billion.
           2010-11: $124 million in credits allocated to 52 projects with
            estimated aggregate project expenditures of $967 million.
           2011-12: $104 million in credits allocated to 29 projects ($66
            million of which is "reserved" for 11 pending projects) with
            estimated aggregate project expenditures of $740 million.
           2012-13: $100 million in credits allocated to 28 projects with
            estimated aggregate project expenditures of $683 million
           Demand for credits far exceeds supply; available allocations
            were oversubscribed for all funding cycles, and the 2010-11,
            2011-12, 2012-13 amounts were oversubscribed on the first day
            of availability."








but still...  the California state has to foot the bill, and who/where would the budget for that come from?


http://www.leginfo.ca.gov/pub/11-12/bil … _comm.html
"                     BILL ANALYSIS                                                                                                                                                                                                   


                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair


          AB 2026 (Fuentes) - California Film and Television Tax Credit.
         
          Amended: August  27, 2012       Policy Vote: G&F: not available
          Urgency: Yes                    Mandate: No
          Hearing Date: August 29, 2012                         
          Consultant: Mark McKenzie       
         
          This bill meets the criteria for referral to the Suspense File.

         
          Bill Summary: AB 2026, an urgency measure, would extend the
          applicability of the California Film and Television Tax Credit
          (film tax credit) for two years, thereby authorizing the
          allocation of an additional $100 million annually in tax credits
          to qualified productions from July 1, 2015 until July 1, 2017.
....



maybe taking a look at the California's budget will shed some light (as it had 20billion in deficit in 2011, and now it's just getting balanced)
http://www.ebudget.ca.gov/pdf/BudgetSum … ummary.pdf

Feb 26 13 08:27 pm  Link  Quote 
Photographer
NothingIsRealButTheGirl
Posts: 31,986
Los Angeles, California, US


Well, I guess you are right, and it's all about overpaid American CG artists.

Looks like the only way the US is going to compete with India is to either start paying people $10K a year, or start being polite, like they are in Canada.

-----------------

edit:

R&H Taiwan studio to open by late March

http://focustaiwan.tw/ShowNews/WebNews_ … 1302280004

Yang said all visual effects companies are facing the same problems worldwide.

He blamed the outsourcing of post-production film work on certain countries providing huge tax credits, saying that post-production companies that do not have studios in those nations could face higher costs.

Canada, for example, provides credits ranging from 16 to 60 percent for Canadian labor and production costs, he noted.

"It is the movie studios that are benefiting (from the policies), not the visual effects companies," he noted.
Feb 26 13 09:05 pm  Link  Quote 
Photographer
NothingIsRealButTheGirl
Posts: 31,986
Los Angeles, California, US


Interesting article:

If, as the MPAA insists, movies should be recognized as imports then so too should post-production work. That means visual effects work would be subject to the same subsidy-busting provisions which previously were primarily applied to physical goods like steel and lumber.

http://pando.com/2014/02/25/revenge-of- … hollywood/


----


also:
http://digg.com/video/how-life-of-pi-sa … s-industry
Feb 26 14 05:36 pm  Link  Quote 
Retoucher
JBHarris
Posts: 38
Frisco, Texas, US


Why do people always cling to the idea that it is all about how us american workers are somehow overpaid compared to the rest of the world.  My favorite is that "it's ok to pay people in india 10k a year because the cost of living is cheaper".  That might have been the case ten years ago, but it's not now, and hasn't been for a long time.  My brother is a VP at an international construction company.  They have very few engineers from america any more, because they are paying indian engineers half what they would pay an american one (about 50k a year).  The indian engineers are not making a good living, for where they are at they are not even considered middle class.  On top of this the company pays a select few american engineers to go over all of the work the indian engineers do because they have had many many mistakes from them.  The whole issue is complicated, in a one point stance of how to fix it, it's going to take working on several issue's to ever get things back to where people everywhere can make a $$ ammount that is truely proportionate to the job they are doing.  Also food for thought, do you really think as much money as life of pi made that there is any reason that the company who did the vfx should be having to shut it doors??  what they were paid for that movie compared to what the movie made is shameful
Feb 27 14 07:24 am  Link  Quote 
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