Rhythm and Hues
I am sickened by all the news about Rhythm and Hues, made even worse by the announcement of them opening up in Taiwan, and screwing everyone in LA. I have seen no mention of this on Creative Cow - surprising.
a) We've got major coverage of the state of the VFX industry as a whole, should be ready next week.
b) It's being talked about in other forums than this one, which tends to be very editor-focused.
c) Not to sound insensitive, but there are 2 million people coming to the COW every month. While we very definitely have a regular group of folks from R&H and other VFX houses who are active members...there are hundreds of thousands of VFX people in the COW who'll never work in a house anything like the Hollywood ones. Those folks have often been hurting for many years before it touched Hollywood....also true of editors, which HAS been discussed here many times.
So while it's news, and our coverage will be the best you've seen yet...there's a sense in which this is OLD news, and R&H is one more sad data point of what will surely be more to come too soon.
Which is to emphasize, yes, this is tragic, and we will be covering it thoroughly.
Vice President, Editor-in-Chief
I do think this shatters the image some younger people have that as they toil away eventually their talent will rise in visibility and they'll get to work in the upper echelons with recognition and pay to match.
Then there's the rest who keep rejiggering our business models in a creative arts world where, for many, it's getting harder and harder to prepare for changes coming around the bend.
Many of us lived through the demise of some big iron and "prestige" post houses.
Is this very different from what happened with Digital Domain in Florida? I don't know any staff or people that worked with either. The lack of comments may just be people being cautious with what they say, in case they want work later.
I read a comment elsewhere that suggested there is only a small market of FX-heavy films in production at any one time to support and employ the really big VFX houses.
I think it could also be that there are enough boutique sized FX houses out there to piecemeal out the work to, for less money, in a race to the bottom on rates. The problem I see with that is, a boutique house may be quite good enough to do the work you currently ask for, but it may lack the resources to develop new innovations, stuff that they write custom code for: the new effects and approaches that open up the industry for everyone from TV to games to films, and that leads to stagnation in technology development.
Yup. Let's not do the right thing an combat the CAUSE of the issue, but go after the symptom. Major studios are demanding a lot of high end VFX, for little cost. Often set fees that don't take into account the R&D, the need to buy and maintain the equipment, the long hours the artists needed to complete the task...and the fact that they have to deal with NOTES and CHANGES that seem never ending, and they aren't allowed to bill more ("we had an agreement on the costs...do this at those costs!")
No, instead they just band-aid the issue and go for the cheap labor. And now the studios feel that they can get away with their awful practices.
Why? Because if R&H doesn't do this...they will lose the job to another company that would be willing to do this for cheaper. Same damn issue us editors face...cheaper, younger, hungrier labor.
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Petition to end the practice of the export of VFX talent overseas...if it does any good. I used to have faith in this stuff...but you get wiser when you get older:
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Read my blog, Little Frog in High Def
I don't know that protectionist moves will help in such a porous situation. We could match the foreign tax breaks here in the US with federal money... (he said on the first day of the Sequester kicking in because D.C. is hopelessly gridlocked)
I talked about this global problem a couple of years ago, when I had a minor epiphany regarding high speed data networks. The packets don't care if you are rendering in Kansas City or Karachi. Milwaukee, or Mumbai. Chicago or Changsha. it may be night here, but they are awake on the other side of the planet and ready to take your business away, for lower rates. A rate you can't live on is still a kingly sum to folks living on a dollar a day.
Right now its high end VFX but soon enough it will be straight editing as well, lowest common denominator for price. From a wedding edit to a corporate one, you will be competing with a global market of people who are willing to do it cheaper, and your ONLY advantage might be your talent and creativity versus theirs. We saw stories about this this past year in the journalism biz, where some newspapers were having their LOCAL news written up by sweatshop cube farmers in the Philippines and by AI algorithms that re-processed stats and PR releases into news copy. WBEZ radio broke that story when they caught Chicago papers doing this.
So, do we all just hang it up and go apply for a job at the local pet store? Well, no. Eventually, maybe, though. The very Heavy Iron VFX houses that are falling today may be the only ones with the scale to stay afloat, but they may evolve into production companies developing their own films in competition with the studios. Our business models will have to continue to adapt and find the niches that can't be served as well from out-of-country. To me, that suggests a very hyper-local business and one with small margins.
[Mark Suszko] "your ONLY advantage might be your talent and creativity versus theirs"
Allow me to add one other factor which, not by coincidence, is our tactic. That's having the specific product and category knowledge that comes from years working within a few select industries. Discount shooting and cheaper editing are no substitute for knowing what's of interest to the target audience as well as what other marketers are saying to them. Hopefully this advantage will continue to matter. Otherwise... "Hello, and welcome to WalMart."
[Nick Griffin] "Discount shooting and cheaper editing are no substitute for knowing what's of interest to the target audience as well as what other marketers are saying to them. Hopefully this advantage will continue to matter. "
I agree but the clients looking for that are just a subset of the larger overall client base which now has more options than ever. Non-discerning clients (or just cheap clients) will make their decision 90% based on price. And I just don't mean the traditional 'grinder' clients either. I've worked for large companies that just want people churn out edits because when the project comes in under budget management gets a bonus. Of course this hurts the company long term because you can only coast for so long churning out mediocre product but management seems content to milk the cash cow until it dies.
There certainly is a lot of upheaval right now in part because 'good enough' knowledge and good enough tools are available to the masses in ways they weren't even 5yrs ago and the trend is just going to continue. Pretty soon editing and creating a cool composite shot won't be any different than someone casually learning guitar because they want to strum out a few songs at the next beach bonfire they go to. The silver lining is that people still make livings as musicians. There's just more competition now than there was 200yrs ago.
[Shane Ross] "Yup. Let's not do the right thing an combat the CAUSE of the issue, but go after the symptom."
As Shane's link to Deadline reminds us, this is a Chapter 11. R&H is still around, still expanding. The reorganizing is to protect them from people chasing them for money too aggressively...presumably including the artists who hadn't been paid in over a month before being let go.
R&H is going to be going on in some form, including a merger that could have the same herd-culling effect, with the same potential for current patterns to calcify even harder.
[Andrew Kimery] "There certainly is a lot of upheaval right now in part because 'good enough' knowledge and good enough tools are available..... "
Very true, and one of the most frequent topics in this forum...but for someone like Digital Domain or R&H, "good enough" is NOT good enough. It has to be miraculous, it has to be massive, and it has to be insanely fast.
The problem is that there are half a dozen companies who can deliver massive miracles on time, and about that many customers, for a dozen or two movies a year. The studios have exerted massive downward pressure on the houses because they CAN. The VFX houses have exerted massive downward pressure on artists because they HAVE to in order to compete at prices that studios are willing to pay. There's no friction to stop it.
To come at this another way, the problem isn't outsourcing. It's minimum wage.
In the Hollywood corner of the industry, that has historically been set by unions. For example, ACE has negotiated that a full time week is around 56 hours, and the minimum wage is around $46/hr. (One of you will correct me faster than I can look it up. LOL) I doubt most people reading this are working for prices that low, but that's the floor, period, no discussion, doesn't matter where your editors work.
There are obvious workarounds (shoot non-union, move productions to Canada or whatever, but even THAT trend is reversing considerably, thanks in part to a wicked strong Canadian dollar) - but by and large, outsourcing editing is irrelevant because on a Hollywood picture the wage is the wage.
There have been talks about unionizing VFX for years, for the express purpose of trying to take at least a little control of setting minimum wages...but entertainment unions' backs have been broken so consistently of late, it may be too late.
Part of the issue is, who's in the union, and who are they trying to protect themselves from? The individuals working at big VFX houses from the owners of those houses? Traditional labor/management stuff? It would be impossible to get concessions from house management when studios aren't changing THEIR practices. So would it be some kind of trade association of the VFX houses trying to push back against the studios? Not likely when there are dwindling numbers of them fighting for the same handful of contracts.
It's insane that this is happening on the heels of Hollywood's biggest year ever...and yet, in the current scheme, inevitable. When Ang Lee was asked about R&H after the Oscars, he began his answer by saying that he wished VFX cost less.
"Hey Ang, sorry we helped you earn all those Oscars. We'll try to do WORSE NEXT TIME. And can you pay us less? That'd be great." Indeed, for the 4th year in a row, the movie that won the Oscar for Best VFX also won for Best Picture.
The larger issue, and why DD, R&H and others still feel like (with all respect and sympathy) a small story to me, is that 99% of the industry IS fighting the "good enough" fight...which of course we in our 40s and 50s were the ones to start when we were coming up in the late 80s, early 90s, when we were using Media Composer, After Effects, Media 100 and UVW Betacam, most of which came along in 3 or 4 year span, and all of which had us pitching "good enough." We distrupted in a couple of years what had been working just fine for 100 years in film, and 60 years in TV. Hasn't stopped either. It has gone around and it is coming around....and around and around....
But I think that the economic impact from the pain of millions of individuals, and artists in SMBs, local TV stations, etc. is far greater than that of a couple of major VFX companies, if also a much harder story to tell. "From an individual in Alabama to a boutique in Zagreb" isn't as compelling or well-contained as "winners of the VFX Oscar."
[Tim Wilson] "Very true, and one of the most frequent topics in this forum...but for someone like Digital Domain or R&H, "good enough" is NOT good enough. It has to be miraculous, it has to be massive, and it has to be insanely fast. "
When I originally said it I was speaking in a more general sense but I think it applies here too albeit in a slightly different way. R&H's end product has to be top notch, but do all their employees have to be as well? There is certainly a high level of artistry to VFX but there is also a lot of rote grunt work (just like with editing). I've never worked on anything that would be considered VFX heavy but I'd imagine there is a lot of prep work (key pulling, rotoscoping, wire removal, etc.,) in a movie like Avengers or Amazing Spider-Man that requires more elbow grease than artistry and if you can hire 400 'good enough' elbows over there for the same price as 100 good enough elbows over here... to quote Stalin, "Quantity has a quality all its own".
What starts as grunt work now will grow into higher quality work as these overseas companies gain experience (similar to the path animation has taken). Eventually they too will outsource their grunt work to another country and the cycle will repeat itself. Maybe VFX work will circle the globe and come back to the U.S. in a few decades. ;)
I live in Mumbai.
I was once offered the job of leading a team of roto-artists to do 2D to 3D conversions - for a couple of major Hollywood movies. The salary offered? About $600 a month.
Somebody mentioned editing. Want to know what the going rate is for an editing room with editor in Mumbai? Less than $10/hr.
The US or Europe cannot win the 'salary' war against any Asian country, that's pretty obvious. But there might be a 'workaround'.
I was born and raised in Dubai, and have worked there for many years. The salaries in Dubai weren't that high 20 years ago, but there were still quite a lot of Westerners who were willing to move because they couldn't find jobs in their own countries.
When I first landed in Mumbai in 2002, there were hardly any 'Foreigners' here. Today, they are everywhere. They have bought homes, and raise their children here. I have a friend who runs a VFX facility, a classy one. He has many artists from Western countries.
Think about this: If I were to apply for a job visa in the US or Europe, I wouldn't be welcome. But a foreigner can easily get a job visa anywhere in Asia easily. So why not take advantage of it? A few thousand dollars can go a long way in this part of the world.
The point of globalization is to fight the 'battle' globally. Artists must be willing to travel and display their expertise outside their comfort zones.
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I always think there is clear writing on the wall well before a change happens. Just reading the credit roll on highly effected movies over the past ten years you could plainly see the number of foreign countries and their artists plugging in growing rapidly. Why? Cost. Time to revamp the business model. Broaden the scope of your work to more than just features...don't just sell to the movie industry, but pay some of the bills selling high end services to corporate clients or ad agencies.
Diversify. With so many talented artists and even programmers, they could have spent some resources on developing a custom effects app and sell it at NAB. Could have kept them afloat perhaps a bit longer.
Purchase equipment wisely. Technology costs have come down...find ways to save on gear and networking...drive arrays and the like.
Advice for us all, really.
Tilt Media Inc.
Video Production, Post, Studio Sound Stage
"Revamp the Business Model"
In my opinion this is much easier said then done.
Further more, I see no real viable business model on the horizon.
Soon all of what we know of as “Post Production” will change dramatically.
There is no barrier to entry, Distance will become meaningless,
The schools (now there’s a profitable part of this biz) are pumping out way more graduates then there will ever be jobs for. I recently read of a new expression
In the NY Times about companies looking for employees that are
22x22x22, Which turns out to be recent grads that are 22 years old
willing to work 22 hours a day for 22,000.00 a year. Jingle Bells
Schemes like the one being put together by Companies like AFRAME
will eat everybody’s lunch. Some will say the bandwidth just isn’t there
I got a 55” LED TV, No more 19” B&W Zenith
I got my communicator er: IPhone
I got some 9 gig drives that I bought for 5,000.00
I lost my Dial Up Modem and got a cable modem
I threw my 80,000.00 Media Composers in the dumpster
And you don’t need a Kscope to do nothing no more.
Just Wait and everything in your shop will be worthless, everything.
No matter what you buy it’s going to be worthless in a year or two.
The only thing left to sell is creativity and the ability to get something done on time.
So the question becomes,
How much can you sell that for?
Will it be enough to cover overhead and turn a profit?
Do your clients really value it?
So you say revamp the business model, I’m not buying
It’s just nice-speak for a Doo Doo business.
And I would do absolutely everything I could to prevent my children
from entering this industry.
Sad but true coming from the former owner of a post house and rental company
who made a good living for 30 years at it.
Knock it off...you're scaring me!
Depreciation of gear is astoundingly short. It really is not an investment anymore because it changes so fast. but I have gotten 5-6 years of good work out of a small army of MacPros so they were worth every penny.
One big difference is that there are so many players and so many ways to connect with a particular video project. Used to be the big production companies were the only game and they were in the white pages. Now we are bombarded by solicitations on Facebook, Twitter and more.
Establishing and maintaining a solid base of good clients is still the key to all this chaos..and a little reinvention once in a while can't hurt.
Tilt Media Inc.
Video Production, Post, Studio Sound Stage