Here's the problem, the movie studios send out their films to be bid on by competing visual effects studios that end up in a bidding war. They under bid each other to get the project and in the end the winner has bid so low at a price they can't even afford to do the project. It ends up putting them into hock.
What makes it even worse is that the directors go over budget because they constantly are changing things, changing their minds, and they end up using up all the money the project was afforded to by the studio deal and putting the effects studio in the red.
Last week Ang Lee the director complained that he wished visual effects work was cheaper! Visual effects supervisor Scott Squires commented the other day that if directors knew what they wanted the first time around creatively the price of redoing sequences wouldn't sky rocket as they do, and the budget wouldn't go so so high and putting the effects houses at risk.
When vfx studios go over budget they hope their next project will get them out of the red. The movie studio's demand shorter deadlines than the last time they hired the vfx house. That puts added pressure on CG artist who are already working 18 hours a day, 7 days a week to make the new tighter deadline. So many of the artists never go home to sleep, and end up in sleeping bags in their offices. The artists don't even get paid over time because their isn't enough money!
Then the studio outsources, they create units in India, Malaysia so that they can get the work done in time and keep the costs down and to keep the doors open. When visual effects studios end up with to much over head they file for bankruptcy (and then are bought out like Digital Domain, by a Chinese company) or they just shut down, or laid off like those at Rhythm and Hues who lost their last two months salaries prior to their layoffs.
The overhead visual effects studios make off their projects is just enough pay for their employees salaries (with no overtime pay or even benefits), and to pay for the utilities and just enough to keep the doors open. Because of the financial situations they are under they are unable to follow California labor laws. If they unionized their prices would go up and they then couldn't compete in the bidding wars for other projects. Overseas studios in the UK and Down Under and Canada are doing fine because their countries have better tax incentives than those in the States.
The crazy thing here is that these films make billions every year for the big five movie studios, while the visual effects studios never see a cut. Visual effects contributes up to seventy percent of what is now on screen; as in The Life of Pi. Some visual effects artists believe they deserve a piece of the pie and wish to get higher billing in the end credits; than being just after the caterer, who is unionized. The mentality of a movie studio executives is how they can they can make it cheaper, or not even have to pay anyone at all.
The Life of Pi won for best cinematography which was ridiculous, what cinematography? Most of what we saw onscreen was done digitally. Everybody who has seen The Life of Pi knows that if it weren’t for the visual effects artists work there wouldn't even be a film.
When the director and cinematographer gave their Oscars acceptance speeches there was no mention or thank you to the visual effects studio or the effects artists that made it all possible! Director Ang Lee said last week that he wants visual effects work to be less expensive. How can he do that? Outsourcing of course, studios in other countries that have subsidies/tax incentives/ tax breaks that don't exist in the United States!
Things are moving forward on how to fix these problems, Unionizing or creating a Trade Association, or getting a tax subsidy here in the United States so they can compete with other studios over seas.
Here's the website that's leading the cause.
http://vfxsoldier.wordpress.com/
http://www.daverand.com/subsidies/
