Computer Graphics World

March/April 2013

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Editor'sNote tive change will result from those who still practice their art and science in the business, though I fear not." Jenny Fulle, founder of The CreativeCartel, pointed out that the VFX industry has been changing a lot in the past five to 10 years, becoming more global, with tax subsidies more common. "It is becoming increasingly impossible for companies in non-subsidized areas to be competitive at this point. When a government is offering a 30 percent to 59 percent tax incentive or tax credit, you cannot compete with that if subsidizes are not offered in your area too," she said. "I don't know if you can end the subsidies, but we need to somehow neutralize the effect they are having. All the subsidies are creating a false economy, and until we end the false economy, it will be difficult to address the other problems such as compensation, benefits, work schedule, overtime, and so forth." While state subsidies within the US are present, Fulle noted that it is the international subsidies that are having the greatest impact. She recalled two decades ago when UK studios got their start, thanks to subsidies. It took years for the UK visual effects community to hit its stride in terms of quality. The same has happened in Vancouver now, and you have a strong, experienced community of VFX artists and companies taking root. "In both these cities, you now have visual effects artistry that can stand on its own. Granted, without subsidies, there would likely be a considerable consolidation of companies, with only the most healthy and talented surviving." The bottom line: A lot of the work we do can be done in a number of places around the world. "But, if the industry continues to chase subsidies, then the new pockets of VFX expertise are never going to have the time to grow and the work will dumb down a bit," said Fulle. A level playing field is key, but there is no easy solution to achieving that. A bandaid is needed now to stop the bleeding (and that could mean a tax incentive program in California) until a more permanent solution can be made at the global level. Until then, companies likely will take chances on studios in areas with subsidies for artist-driven work, thus dilute the artistry of VFX because you are chasing the dollar savings and not making your decisions based strictly on the artistry, said Fulle. "Right now, there is too much supply, and that is causing a rumbling through the industry. There is not enough work to go around. And chasing subsidies is a difficult business model, which isn't beneficial or healthy for the VFX community." Bobby Beck, CEO/co-founder of Animation Mentor and former Pixar animator, said that despite the current situation in VFX, the industry does indeed have work to offer artists. "We are in an exciting time, as this issue has existed for a long time and it seems like there is visibility and momentum in the right direction to truly solve it." Beck and his AM team are ingrained within the industry: co-founders Shawn Kelly and Carlos Baena are working as animators at ILM and Paramount Pictures, respectively. And all are deeply concerned, but not exactly surprised. As Beck pointed out, the industry has been changing for a long time, and there are diametrically opposed forces working against each other to solve this issue. One, big film studios want lower prices. Two, the quality of work the VFX studios are doing is getting more challenging and, as a result, more costly. Beck believes that the current situation with VFX is one that can be solved by the big film studios themselves if they are willing to support the VFX industry that continues to drive their most profitable films – the point of the "going green" movement on the social media channels. ›› See a Q&A with Beck about how this may affect schools, accessible under "Extras" in the March-April 2013 issue box on Scott Ross actually summed up the situation nicely in a radio interview he did shortly after the Oscars. He was visibly upset. "When I was running ILM, this was a cottage industry populated by technologists and creative artists. There was a quote back then by George Lucas that if you feed those ILM people enough beer and pizza, they will do anything. Now it's a lot of business, and the size of budgets have gone up tremendously," Ross said. He noted that on movies like Batman, Avatar, and so forth, VFX can cost $100 million and is by far the biggest line item in the budget. However, studios are actively trying to drive the price down to get the work. "We are architects of building stuff that has never been built before and we do it on a fixed price. That, combined with tax subsidies around the work, and the profit margins are 3 to 4 percent in a good year." Consider what occurred on the Twilight movies, Ross said. British Columbia was offering a 35 percent tax rebate, so studios had to do the job in Vancouver. Studios spent $1 million to open there, and then the workers were imported to the facilities. "So now we have a population of migrant digital artists in New Zealand, Vancouver, Mumbai…." VFX appears to be the future of filmmaking, Ross notes. And a trade association has to go into effect and a cohesive voice needs to say to the studios that the business model does not work, and if it does, "you are shooting the goose that lays the golden egg. Motion picture studios are doing what they can to get the best work for the least amount of money. That is business. We then say we will do anything [to get the work.] We have not taken ours seriously and not realized our value, and now we have to go back to the studio and say, 'this is the way it needs to be done,' and come up with a new business model." ■ March/April 2013, Volume 36, Issue 3: COMPUTER GRAPHICS WORLD (USPS 665-250) (ISSN-0271-4159) is published bi-monthly with special additional issues in January and July resulting in 8 issues per year by COP Communications, Inc. Corporate offices: 620 West Elk Avenue, Glendale, CA 91204, Tel: 818-291-1100; FAX: 818-2911190; Web Address: Periodicals Postage Paid at Glendale, CA, 91205 & additional mailing offices. COMPUTER GRAPHICS WORLD is distributed worldwide. Annual subscription prices are $72, USA; $98, Canada & Mexico; $150 International airfreight. To order subscriptions, call 847-559-7310. © 2013 CGW by COP Communications, Inc. All rights reserved. No material may be reprinted without permission. 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