Reply to post: Re: Nobody knows anything

Re: Nobody knows anything

Yes. Exactly.

The opinions on offer in the article are some I've heard way too many times - It's abstract high-brow economics talk that has little ACTUAL correlation with the business. You have to have actually worked in the business or understand how it operates to see why the sky is falling. It's not about equipment and capital outlay - it's about scope creep and time spent (and I say time, because this is realistically the only way to quote and charge for work, because we don't get to itemise 'equipment' like the shoot people do). In the end, people costs will always dwarf equipment costs and nobody chooses your VFX company for the job because the equipment you have is two years newer than another company.

The visual effects business like MOST creative/media/content businesses don't submit to these simplistic economic 'rules' because none of these businesses make widgets - these businesses are a mix of services and products - services and products that are never standardised. Each job is highly variational and each job is usually conducted on a project basis: there are almost never retainers or long-term contracts that span multiple projects. Quoting and cost-estimation is notoriously difficult - the end product is only very loosely defined by the client, meaning, amongst other things, that quotations can vary wildly from supplier to supplier and scope-creep is rampant.

When is a shot 'finished'? Who decides? How many times must you re-do an effect before it can get ticked off the list of deliverables? The entire process and end result is built largely on individual opinions - and can't be accurately spec'd beforehand. This makes for extremely volatile accounting for time(money) spent on a job - the potential for a loss is very, very high. These factors would cripple other service-based industries like law, consulting etc IF they didn't have objectives that were easier to define or outcomes that were easier to agree on.

This is partly why it's so hard to grow creative businesses - the lack of reusable 'recipes' in multiple business dimensions mean they are extremely difficult to scale.

The VFX industry works with uncertainties and changing scope to a degree that would terrify most people in other lines of work. But they do it because they're in the business for LOVE first, not money. And thus, in the end, their powers of negotiation are usually underdeveloped and the studios have all the leverage in the relationship.

Tax breaks, that allow studios to shop their work around the world, are a major factor in the situation, but that has been better laid out elsewhere. I think the factors that don't get enough discussion though is simply the broken relationship between client(studios) and VFX producers, the lack of accountability by studios in their project scopes and ultimately the lack of strong industry representation (negotiating bodies and standards enforcement) and perhaps even unionisation.

In its simplest form, many of the above issues could be solved by simply specifying how many hours/days each shot would be assigned - OR how many change requests are allowed for in the budget per shot. This is how many graphic design jobs work, to limit the endless change-cycle that could creep in to every project. Good luck getting studios to agree to this system without every single VFX house getting on board at once though...