Effects Community Mobilizes at Hollywood Protest

9:38 AM PST 02/26/2013 by Carolyn Giardina

“Human beings are being put out of work to get these effects done at a dirt-cheap rate," says one recent Rhythm & Hues casualty.

When more than 480 people gathered Sunday on Hollywood Boulevard to bring the film industry’s attention to the economic problems threatening the visual effects community, they cited a need for a new business model, lamented the personal toll on individuals and families and discussed the potential of a trade association and/or union to address the situation.

And the group intends to continue efforts to discuss and raise awareness of these issues.

Prompting the VFX community to organize was Rhythm & Hues Studios -- the company behind many of the effects in Life of Pi -- and the fact that it filed for Chapter 11 bankruptcy protection Feb. 13 while letting go an estimated 250 employees. Just hours after the demonstration, Life of Pi won the Oscar for visual effects.

STORY: 'Life of Pi' Director Ang Lee Calls Rhythm & Hues Bankruptcy 'Very Sad' 

Some of the factors affecting the business include intense competitive bidding that leads to companies taking on projects at low, fixed bids; globalization, as government incentives and cheap labor abroad has created an uneven playing field; and tight profit margins -- often 5 percent or less -- that can be endangered if a project is canceled or delayed.

Participants in the demonstration -- many carrying signs that had messages along the lines of “I want a piece of the Pi too” -- included current and recently laid-off R&H employees and representatives from other companies and freelancers. Some brought their families; the youngest participants were in strollers.

“Human beings are being put out of work to get these effects done at a dirt-cheap rate,” said Tom Capizzi, an artist recently let go from R&H after being with the VFX house since 1997. “It was a very abrupt layoff without pay. We had our health insurance dropped, so my kids don't have heath insurance right now.”

Capizzi is among the terminated employees involved in a class-action suit against R&H that alleges the mass layoffs on Feb. 11 came without proper notice and was a violation of federal law and California Labor Code.

Said another R&H employee: “I survived the layoffs, but we don’t know how long it is going to last. I just got paid on Friday after a month without pay. A lot of my colleagues didn't get paid since Jan. 15.

STORY: VFX House Behind 'Life of Pi' to File for Bankruptcy 

“Increasingly, it’s becoming an industry where people work long hours, rates are dropping, benefits are not coming in, and you are expected to relocate,” the source added, pointing to his small child and saying, “He’s been in three or four different schools because the work keeps moving around.”

Underscoring how long work hours can take a toll, another demonstrator pushed his child in a stroller with a sign that read: "At least I get to see my Dad today.”

“What you are seeing today is a lot of anger, I think directed at studio execs who have been forcing independent [VFX companies] to go oversees,” said Paul Van Camp, a 30-year VFX veteran and a 2002 AMPAS Technical Achievement Award winner who now works at R&H. “I have heard cases where studios specifically told visual effects companies that they need to open a branch in [a city with subsidies] or they wouldn’t continue to get business. And that puts a strain on VFX facilities. They don't usually have deep pockets, and it costs a lot of money to open these [branches].”

Leslie Ekker, an Oscar nominee for Apollo 13 and a 34-year industry veteran, said the impact of subsidies is “a diplomacy problem."

"It goes beyond Hollywood, but it starts with Hollywood," he said. "The subsidy system is really destructive. Inevitably the marketplace adjusts and tax incentives don’t have the same advantage that they used to, and then you’ll find cities with their VFX work systems just collapsing. That is going to start happening; it is happening a little bit already. … The tax advantage that [Vancouver] had is not as great as it once was.”

Pointing out that the 20 highest-grossing films of all time relied on VFX, Ekker added that “VFX facilities are being treated in a way that is disproportionate to the importance of VFX to a film.” He pointed out as an example that on fixed-bid projects, “the studios are not forthcoming about changes and schedule adjustments.”

To that end, R&H artist Dave Rand said he hopes the industry will consider a move from a fixed bid to cost plus.

During the demonstration, varying views were discussed about whether a trade association or union -- or both -- would help the situation.

“I feel unions are not what is needed,” Ekker opined. “What I think is more valid is some sort of guild or trade organization that helps to spell out the business practices between studio and VFX facility and the rights and condition for [employees].”

Representatives from organized labor attended Sunday's rally to support the artists. “These people are being taken advantage of; it shouldn’t be that way,” said Bob Oedy, international lead organizer for the International Brotherhood of Electrical Workers. “The profits are huge for the studios, and the VFX artists have been marginalized. They really need to unionize or this is going to continue, unfortunately.”

Steve Kaplan of the Animation Guild, Local 839 of IATSE, also attended. “We support any grass-roots effort to change conditions and standards in the workplace,” he said, adding, “As a former VFX artist, I came unbranded; I wanted to stand in solidarity with those I used to work with.

“Ultimately, the artists and the VFX shops need to band together and in solidarity and bargain with the producers to change the way the visual effects industry is paid," he continued. "This stems from the fact that it is fixed bid, and VFX has been used as a profit center for entertainment.”

Kaplan believes this is an achievable goal, though he added: "What makes this a little more difficult is this is a vendor to production [relationship]. If the VFX artists worked directly for production entities it would be easy.

“They have to form a trade association,” he said. “A union could absolutely help, but a union is not the ultimate answer. That is the answer for better conditions for artists. [An answer is] unionized artists working with an organized VFX shop trade association.”

Rand emphasized that the demonstration was about awareness of the troubled VFX business model, not about Life of Pi or R&H.

STORY: Oscars: 'Life of Pi' Tops With 4 Wins; 'Argo' Named Best Picture 

He cited Digital Domain as another recent example of VFX business troubles. Digital Domain -- whose work includes VFX Oscar winner The Curious Case of Benjamin Button -- filed for bankruptcy protection last year. Two weeks later, it was acquired for $30.2 million by India’s Reliance MediaWorks and China’s Galloping Horse.

Elsewhere, Pixomondo -- the lead VFX house on last year’s visual effects Oscar winner, Hugo -- closed its London facilities Friday. The company's CEO Thilo Kuther tells The Hollywood Reporter that the decision was isolated to the London office, which he said has not been able to maintain profitability from local work. He added that its 22 employees all were being paid in full.

Pixomondo has a business model that involves maintaining facilities in various cities and countries around the world, including Berlin, Frankfurt, Munich, Stuttgart, Hamburg, London, Beijing, Shanghai, Burbank, Toronto and Los Angeles and Baton Rouge. Kuther said the company employs an estimated 800 people worldwide.

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