Backing Out...

I read a great piece by Jerry Solomon on Cost Consultants today:

http://producerposts.com/producer_posts/

One of his points is that he is often no longer required to bid a job. Instead, he is asked to ‘back out’ of a figure presented to him by an agency.

It’s an expression I’m hearing a lot more of these days. We have often asked an agency ‘Well, how much DO you have for effects?’ after several rounds of bidding a job and being told ‘We don’t have that kind of money’. I can see the sense of cutting to the chase and being told up front exactly how much money they have. That way, we can either accept that or politely decline.

The problem I have though is when the job happens to be a significantly FX heavy job (i.e. 60% or more of the final master will be originated as VFX/CGi). We are still being told that for a job that we have bid for around $600k in terms of VFX/CGi - and that after applying a voluntary discount of 30% - that they have backed out a figure and they only have $150k for us. It does not seem possible, or fair, for us to do produce the majority of what will end upon the screen (in some cases we even provide the ‘talent’ in the form of a Computer Generated Star) while receiving only a small portion of the budget.

If the overall budget for the spot is $500k, our bid for the FX came in at $600k (discounted) and we are being told that there is only $150k left for FX, experience tells me that the fact that we are being asked to bid on this could mean one of the following:

a) The agency producer wants some ammunition to help kill a particular idea from creatives who had a great idea that was totally out of line with the budget.

b) The hope is that someone will ‘fall in love with the idea’ and will invest some of their own time and money to get it onto their reel.

c) They think that someone may be desperate enough to take it on.

All this is understandable. These are challenging times. My problem is when there is a budget of over a million dollars on a heavy FX job but the numbers back out to leave us with under 10% of that budget. Less than 10% to produce over 60% of the total visual content of the spot? Really? And what could be taking up so much of the budget on a heavy FX spot? It’s not the music, it’s not the sound design. It could be the agency travel and accommodation allowance on the shoot. But that couldn’t be all of it.

No, it would appear that directors are more willing than ever to propose that they shoot a lot more in camera. So naturally shoot costs are higher. Back when techniques weren’t as advanced – and there were many more commercials being shot – we would ask the production to shoot elements that we needed to make the FX work. We were often told that there was no time and that we could just ‘make it work’ in Post. Now, most jobs appear to require more time to shoot material that we end up not using.

I understand that these productions are underfunded and that another shoot day is another shoot day. We all need to make our money. I certainly can’t fault a Production Company trying to get as many shoot days as possible – I’m sure for that most part they feel like there is never enough time.

However, from my perspective, companies such as ours have some of the highest Capital Expenditure requirements and some of the highest fixed staff costs so whether a job comes in or not we will be spending out hundreds of thousands of dollars a month in overheads. So when an agency asks a Production Company to back out of an overall budget for an FX intensive spot, and it leaves a figure that doesn’t cover costs, that constitutes a problem.

There are still productions which don’t operate in this way and, understandably, it’s with clients and production companies with whom we have the best relationships. There is still never enough time or money but even at the budgeting stage the allocation of money shows the amount of respect given to our part of the process and it should come as no surprise that these are invariably the most collaborative, most creative and best executed productions of all.

The Business of Altering Reality

I recently saw this short item in the New York Times:

http://www.nytimes.com/2009/04/29/business/media/29dream.html?scp=1&sq=animation&st=cse

Doubled profits at DreamWorks Animation? Their revenue jumped by 68%? While I am impressed with these figures, I am not surprised by these huge profits at DreamWorks. There is a recession going on out there and people need to escape that fact. There have been countless stories lately about different sectors of the entertainment industry that are dodging the recession bullet. The video gaming industry grew by 10% last year, exceeding analysts and their gloomy forecasts by huge margins. Ticket sales at movie theaters are up as well. True, the cinemagoers are probably smuggling in their own food and drink rather than pay double the cost for their watered-down and sugared-up concessions, but it says something that in these economic times they are willing to part with $11 for two hours of distraction.

This increased movie going during economic slumps is not new. During the Great Depression in the 1930’s, Americans went to the movies en masse. It was their one chance to escape their hardships and they spent whatever money that could be spared to go watch Jimmy Stewart and Carole Lombard on the big screen. Their reality could not be altered, so they wanted to watch the better, richer and more screwball lives of others.*

But during this economic slump there is a difference; we have actually learned how to alter our reality, not just escape it. We live in a world of alternate realities. We can create any type of on-line life we want. I can open an E-Harmony account, steal the photo of the best looking man I can find on-line and instantly be a 6’4”, former Olympian and current titan of industry. I could send out Tweets from the loo in Buckingham Palace one day and from the flightdeck of AirForce One the next. If I had the patience for Second Life, I could become a virtual rock star in a virtual band.

I suppose that a lot of us who are drawn to a job in the VFX/CGi world have a tendency to want to alter reality; to create something more beautiful, or interesting or just different than what we see or how we see it. Great art can come out of some very dull or very dark places. I’m not suggesting that everything done in the name of VFX/CGi is Art – but at it’s best the fusion of creativity and technology can produce some breathtaking images that can alter our current perspective or transport us to another time or place.

When our own world seems challenging at best and frightening at worst, I take pride that I work for a company that creates entertainment to offer a short respite from reality for people. Our London office has just finished up Where the Wild Things Are, the latest film from Spike Jonze based on the classic children’s book by Maurice Sendak. Our main contribution was to add character, performance and life to the faces of Wild Things and help to realise an extraordinary project. As ever with the CG work that we do on films, if the characters don’t work then the film doesn’t work. It’s ironic that it is the realism of characters that are not based in reality (Wild Things, talking polar bears in Golden Compass, Hippogriff in Harry Potter) that makes the movie ‘believable’ and help us to escape from the mundane or the stressful.

Wild Things is the ultimate story about an altered reality, instead of serving out his time out in silence, Max grows a wild and fertile forest in his imagination and journeys to the land of the Wild Things. The ultimate animation tools that are helping to stretch the limits of the imagination and push back the boundaries of reality will be used to tell this ultimate story of escapism. We all have things to forget, even if it’s just the fact that we were once so naughty that we had to go to bed without any supper.

* I know that Television had a massive impact on cinema going. From the time of TV’s introduction in the ‘50s ticket sales declined from 3 billion to 1 billion in 1970. For an interesting take on that relationship you should read this blog by Charles Day.