John Parenteau's Thoughts on the VFX Industry

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Last Friday, visual effects veteran John Parenteau wrote a long status update concerning the visual effects industry on his Facebook page.  With his permission, I've reprinted it here.

John Parenteau's Thoughts on the VFX Industry, March 15, 2013

I was unfortunately not able to attend the VFX Solidarity town hall meeting last night, but I wanted to share some thoughts about the current state of the visual effects industry, and propose some possible solutions for all our futures. This might also help some of my non-VFX friends understand what's going on. So here I go!

As we all know, the visual effects industry has faced some challenging times recently, though most of these challenges have existed for years, and only now have reached a boiling point, and thus become visible on a national stage. Though the times are tough for many facilities and artists, it's this boiling point that will help to create change, and that in the end will be a good thing.

I feel there are some significant issues that face the industry as a whole. No single solution will fix the problems we face. A long term and competent solution for the industry will require, in my opinion, all of these items to be addressed simultaneously. This would, of course, seem to be an insurmountable task, yet if we are to survive as a vital business it is imperative that we work together to achieve results. 

This is, of course, my opinion, but it is based on experience since the beginning of desktop technology, when visual effects unfortunately became a tangible commodity instead of an art form, where it should be. From about 1992 on, a large part of the business was comprised of eager artists who were simply excited to be part of the movie industry. Many of these artists went on to form companies, and though it was well intentioned, the problem was that none of these people (and I include myself in this) had any experience or training in running a business. Beyond our lack of ability to manage employees or create budgets, we lacked the backbone to form a real business model, and to enforce this with our clients. Instead, we fell in to a bizarre and truly ineffective (from a business perspective) method of operating that is the source of our problems today. 

I will say here that though I feel outsourcing is a major problem, I also believe strongly that we cannot make our fight about that alone. The world will continue to expand, the artists in other countries will continue to learn, and it is only a question of time when those same artists have the skill set to produce visual effects on level with the best in our industry here. Even if we manage to force countries to remove incentives, which is highly unlikely, we are still faced with the fact that many other countries have lower cost of living, and thus will always be able to offer visual effects at an aggressive price. 

What is important is to be leaders. Visual effects started here, and will continue to be here, if we are smart about how we approach the next phase of our existence. If we productively yet firmly work to create a solution between artists, facility owners and studios, we will continue to lead the industry worldwide, and thus ensure our jobs for a very long time.

Red Tails

So here are my suggestions to help solve our current problems:

1) Formation of a trade organization - The only thing that speaks in this industry is strength in numbers. The fact that every VFX studio works independently, with no standard of practices between them, no common bidding techniques, and NO ability to push back with the studios, makes us completely helpless to their needs. The heads of the VFX houses insist that they can stand alone, but they do so as their compatriots fall around them. At the same time, every facility bids viscously against each other, cutting our rates lower and lower simply to win an award. But many of these aggressive bids simply serve to keep the doors open, not to help build, and thus can be very damaging to the facility's future. Every visual effects company needs to realize that there is strength behind an organization, that working on common bidding practices based not on how aggressive you're willing to be, but rather a proper cost-plus model, will greatly strengthen each company. A trade organization will also give the group political strength to fight illegal incentives around the world, something any single house lacks the clout to tackle. But it is imperative that every company be a part of this organization. It will be impossible to show strength unless every company, large and small, works together in this.

2) Formation of an artist union - When I first started in the visual effects industry, I was working for Universal and Amblin Entertainment, both of which are located on a union lot. Because of this, the IATSE tried to unionize us. Unfortunately the attempt failed, and I believe that failure has led to some of our difficulties today. The combination of a trade association AND an artist union would provide the industry a strong voice in all visual effects matters, while ensuring both facility and artist are protected now and in the future. The big problem is that the cost of going union is too big for VFX houses to bear right now. At current rough estimates, an additional $8 an hour would be added to each artists' rate (not counting current facility contributions for health and pension, which would be replaced by the union). I have strongly encouraged the union to look carefully at this, and develop a plan to reduce this cost initially, and thus diminish the impact to facilities in a grander effort to achieve the union goal. Margins for facilities are essentially non-existent today, and there are no owners walking away with large profits, regardless of rumors you might hear. The largest argument against unionization has been the cost, and that is simply because there isn't the added money available. If the union works closely with large and small facilities to create a new paradigm, allowing artists to unionize for a small fraction of the current costs (perhaps with limited benefits at first), and then create a plan with those same facilities to slowly and carefully increase rates over a few years, it will allow the costs to be slowly incorporated in to future budgets. This is the only way that unionization will be embraced by facilities.

3) Create a new bidding model - From the beginning, VFX has been treated as a mechanical process, using computers and engineering as if we were creating widgets or tangible goods. But the truth is, what we create is art. I have bid extensively over the past years, often directly against some of the major facilities and teams in the business. I have realized that bidding is in no way an accurate process. Nearly every shot that is produced is a unique entity, never before created. It is next to impossible to accurately estimate the cost of producing a completely unknown effect before you actually create it. Imagine you are asked to create a shot of a giant alien creature rising out of the water. You are shown a single piece of artwork as reference. Sitting in front of an excel document, you have to guess how many days it will take you to create it, using a wide variety of disciplines. And you will be held to that number regardless of any complexity, known or unknown at that point. How does any artist know how much his or her art is going to take to produce, before they produce it? Has that exact shot ever been done? Most likely not, since every filmmaker and studio wants something unique and spectacular. So when we bid, we are totally guessing. Perhaps it's an informed guess, but it's still a guess. Combine that with the fact that most production-based VFX supervisors are looking not at the complexity of the shot in detail, but rather at an "average" cost per shot, based on their own "guestimate" in an effort to meet an overall budget mandated, often, by a producer who has to accommodate all the other aspects of producing that film. But because we are treated as if VFX is a mechanical process, we are being forced in to numbers that are often incredibly unrealistic. There needs to be a better way to bid that doesn't require us guessing long before any part of the show is created. 

Red Tails

I believe, utilizing the trade organization mentioned above, that we can create a new paradigm in costing projects. In production, a producer hires a production designer who has a base level of staff they typically bring along; art director, concept artists, construction, designers, storyboard artists, etc, based on the type of project they are producing. When the scope of the work grows, and there is a need for another concept artist, for example, the production designer simply asks the producer for the added budget, and it is approved, or not based on the available budget. There is no reason visual effects cannot be treated the same. Any project, as it begins, can book a base staff at a chosen facility. This staff might include a visual effects supervisor, producer, CG supervisor/lead, comp supervisor, and perhaps a base level of additional artistry. A certain number of shots for the project can be produced with that team, and any additional shots, much like the production designer's dilemma, would require added crew. A percentage of this total budget would be added on for overhead and profit at that facility, but this would be above the actual costs of the artistry. Much like a production crew, the visual effects crew would be billed based on number of people, not on the estimated cost of a shot. 

This may not be the perfect solution, but it is a way to ensure that the right amount of crew is hired, their costs are covered, and visual effects facilities are actually allowed a small amount of profit, while still covering their overhead. The important, and painful part, will be the negotiations between the trade organization and the studios (with an artist representative at the table), to establish what a base crew is, a standardized cost for said crew, and how much work this crew could create without adding additional team members. This base level might cover simple projects under 200 shots, for example, or simply be a negotiated starting point to build a crew that is capable of producing larger amounts of VFX for a blockbuster film. The process would be transparent between studio and facility, just as hiring a camera crew is transparent to production. But, with careful negotiations, and after some time, a new standard will be set, and the pain will subside. If this sounds like an unusual way to produce visual effects, just consider how the actual film production crew is hired and paid. This would be similar, with only the added component of adding cost for profit and overhead for the facility. 

As I said above, this may not be THE solution, but it is a starting point toward A solution. We, as a community, both artist and facility owner, must solve this dilemma to avoid the continuing "race to the bottom" visual effects has become. Note that the studios have no interest in a trade organization, or to unionize artists. The current disarray of the business only serves to help them produce content as inexpensively as possible. And they cannot be blamed for this. We live in a capitalist society, and the studios have shareholders to appease as well. Their job, because it is show BUSINESS, is to make money. But many years ago, the unions faced similar challenges when it came to unionizing studio lots or film productions, and in the end the studios learned that they could still profit under what is now most likely perceived as the "reasonable conditions" the unions have set for crews. VFX is no different. There will be pain through the process, and there will be more challenges, but in the end these solutions will serve to revamp the industry in a way that is palatable to all parties, and we can return to the craft we all chose, namely telling stories.

Thank you for reading.

John Parenteau

John Parenteau is an Emmy-award winning visual effects professional whose credits include "Star Trek: Voyager", "The X-Files" and "seaQuest DSV", and was general manager of Pixomondo Los Angeles.  He now runs Silverdraft, a supercomputer technology company.  Read more at http://www.johnparenteau.com/