It was hard not to notice all the green yesterday as avatars, profile pictures and memes cascaded across the web. Some of this has left many confused and even to those inside the film and computer graphics industries, the full story has yet to really show itself.
Why so much green? The green is to symbolize the chroma key green color that is seen on film sets otherwise known as greenscreen (or in some cases bluescreen) which will later be removed and replaced with the glorious visual effects you see in the final film. Consider it the pink ribbon of the visual effects industry.
That’s great, but what does it mean? The story starts a long time ago, but has really gained traction with a culmination of events, solidified by the Academy Awards this past Sunday night. The oscar for “Best Visual Effects” went to “Life of Pi.” The amount and quality of work completed for this film is simply astounding and many people do not know that the tiger (who could be considered a lead actor) is entirely digital in many of the film’s sequences. A real tiger was indeed used, but the majority of the shots contain tiger created after the fact by visual effects artists. Much of the film was also filmed on a sound stage in a small pool surrounded by greenscreen, meaning the ocean and skies you see in the film are created by visual effects artists. The awarding of the oscar was a bittersweet moment for the industry because, although it is most well deserved, there was another event happening outside the Academy Awards on Hollywood Blvd and in El Segundo, where Rhythm & Hues, the company who created much of the visual effects masterpieces is based. While being given the most prestigious award in the film industry, Rhythm & Hues is simultaneously going through bankruptcy as have other visual effects houses in recent past (Digital Domain, based in Venice, CA, went from public IPO to bankruptcy in less than 10 months. Pixomondo, winning of the Academy Award for “Hugo” closed it’s London and Detroit offices). The other event, nearly 500 protesters comprised of current and ex-employees of the visual effects industry gather outside the Academy Awards to make their voice known and hardly a word was mentioned inside the awards. The visual effects community is especially upset by the cutting short (coincidence or not) of Bill Westenhofer’s acceptance speech, just as he was mentioning Rhythm & Hues, ironically to the tune of the “Jaws” theme.
How can this be, that these companies win awards but are struggling to stay afloat? The problem is multifaceted but it comes down to several different points. Firstly, the chief complaint is about government subsidies and tax incentives being handed out by states, provinces and countries to attract the film industry to those areas. In some cases, upwards of a 30 percent kickback is given to the film studios for bringing their work, meaning for every dollar spent they will get 30 cents right back. This ultimately means the companies based in areas that do not have these incentives are finding it nearly impossible to compete when the competition can offering their services, instantly, at 30 percent less. This also does not include any currency and economic benefactors that are inherent in cross border competition. These incentives have led to a bidding war between companies into staggeringly low prices; in some cases companies will even take on work at a loss just to get work in the doors. Most importantly here, the visual effects house does not see this kickback, the parent client (film studio) does, meaning the visual effects houses foot the cost of relocating or building new services, equipment and talent in order to help the client take advantage of the incentives. Another tragic aspect of the incentives is that they are not permanent, so when they expire or a new elected official ends them, it causes strain and turmoil for the companies that once survived because of them. Also, take note, these incentives are government based and are often times ravaging the local taxpayer. Have a look at what happened to West Palm Beach and more recently the release of documents regarding Warner Brothers, Peter Jackson, The Hobbit and the government/taxpayer of New Zealand.
The second factor is that the visual effects community is the only sector of the film industry that has not unionized. Writers, editors, gaffers and the like have all unionized over the years to help gain collective pull with the studios, provide health care benefits when out of work and work to stabilize wages and terms. Some argue that a union is what is needed for the visual effects community to gain them a collective voice and bargaining terms while others say it would put additional strain on the already struggling visual effects houses causing them to lay off more workers or close their doors faster if they can’t meet the demands of a union. A union may help benefit the workers in the long run but it won’t stop outsourcing and other governments’ incentives.
Another facet is the business model of the visual effects industry, and this is a big one. Traditionally, visual effects has been a work for hire service in which they receive payment for each project they complete, much like an independent contractor. With the increased demand for visual effects by the film studios, the rise of more visual effects houses and the obstacles listed above, the profit margin for this work is often as low as 5 percent, and sometimes at a loss in desperation to get work in the door. There is the old trope of “Do you want it fast, cheap or good? Pick two,” which illustrates that having all three, something usually suffers. The film studios are demanding all three. Production schedules are often a fourth of the time they were ten years ago, the price wars are well documented above and in other articles, and in order to win an award it had better be the best of the best. From the film studio’s eyes, they achieved all three; just look at “Life of Pi.” It’s fabulous and is making nearly a billion dollars world wide. But if we have to pick two, where is the point of failure? The visual effects house is the point of failure and we see them closing or downsizing all the time. The business model of visual effects is broken, in part because the profit margin is so low, but because they do not own any of this content they produce. Visual effects houses do not receive any royalties or residuals like actors or directors every time a ticket sells, the film is played on TV or a DVD is sold despite, in some cases, creating more than sixty or seventy percent of the imagery onscreen (Think “Avatar”). The elder head of Benjamin Button was entirely cg, the head of young Jeff Bridges in “Tron: Legacy” was entirely cg, Richard Parker (the tiger in “Life of Pi”) was entirely cg in many shots of the film, Gollum from “Lord of the Rings” is entirely cg and yet these companies get no residuals as an actor would. If they received residuals or created/co-produced their own content perhaps their visual effects overhead would be backed by other income.
All ten of the top ten grossing films are considered “visual effects films” and ALL of this year’s Academy Award nominees for “Best Picture” contained visual effects (Yes, including “Amour”, “Django: Unchained” and “Lincoln”). Even when a film’s story is questionable, nonexistent, or the acting is sub par, the return on ticket sales of visual effects movies is nearly always a guarantee; just look at the box office results. All of this comes down to the fact that the demand for visual effects has never been higher and the films containing them, more profitable, and yet visual effects houses flounder, drowning in greenscreen, laying off hundreds of workers and closing their doors. This is not about demonizing one country and their workers, it is not about making the film studios out to be faceless money hoarders, but rather collecting the visual effects artists together, united, to talk with the visual effects houses and the film studios to work on long term solutions that will benefit all three in the future. Everyone just feel they deserve a fair piece of the “Pi.”