Keith Goldfarb: As people we very naturally focus on changes of events, deltas, or endings and a lot of people look at 25 years and then we go out of business in year 26 and, and, it is kind of like well, what did they do wrong is the question right? I’m sorry, 25 years, what did we do right? Lulu Simon: What do I love about Rhythm and Hues, uh, mostly, the people Jack Fulmer: It’s not corporate, its, its very familial. Lois Anderson: We moved into our first house, my husband and I, ‘cause my husband worked here too. John Hughes is one of the people that helped us move our stuff. John Hughes: I think our first contract was actually a film logo so that was back in 1987 and computers weren’t all that fast and then there was no way of outputting it so we had to shoot it to film Keith Goldfarb: We were just trying to get something, anything, to keep us employed and being able to pay each other and make computer graphics. I think the majority of the unifying factor was that we saw character animation as kind of a long-term future. Babe: ♫ La la la, la la la ♪
John Hughes: I look at some of the work we do, and I just don’t know how we do it. You know, to me its just magic. The work that goes into the tiger, or some of the other things we do its just, its beyond belief
Amanda Dague: As an animator, I just like the creativity of it. I can take a blank slate and create a performance out of nothing. Jack Fulmer: They’re like you know concert musicians, concert pianists, that are playing at the LA Philharmonic. They’re at the top of their game. Amanda Dague: We’re at our peak, our pinnacle, it’s so exciting! Walt Jones: All of us I think at the end of the day are driven to create, and that’s what really gets us excited and what drives us. The challenge with that is that in many cases, that can take over. Or at least it can cloud your judgement. You’re going to put in extra hours because you want to go the extra mile. And you’re going to try to push things as far as you can as an artist. Even if, the project, and the money for the project, do not require or facilitate that happening. Jack Fulmer: Nobody’s doing this for the money anymore, maybe they were at some point, but they’re not doing it for the money anymore. People are doing it because they love doing it, which is why I do it. Scott Squires: Its not done by the computer, it’s done by a lot of people. And there’s a lot of people in the background working away, night and day, to get the projects done. We as visual effects artists, and as visual effects companies, do not participate in the profit of any of those films. Michael Conelly: The visual effects business is a broken business model right now. And the only people who thrive in this industry, in the movie industry, seem to be folks who have profit participation. John Hughes: At the beginning of 2012 we knew that we had to raise money. I made four trips to China. You know I visited Taiwan a couple times. Hong Kong a couple times. You know, we hired an investment banker. Amanda Dague: You hear little rumours, you hear things in the hallways, little whispers. Um, have you heard this, have you heard that? Uh, it just gets your mind reeling like all the hypotheticals of what could be going on that you don’t know. John Hughes: 20 months of delays, that, between 1.2 to 1.6 million per month. That’s anywhere from 24 to 30 million dollars of additional costs that we had to take on. Saraswathi Balgam: Other projects were supposed to take the people onto that project. And that project got delayed. And all these projects getting delayed, puts you in a really really bad situation. John Hughes: You know I was prepared to sell my shares of stock for a dollar if somebody would invest the 15 to 20 million that we needed. Lee Berger: And then we had investors standing by who fell out at the last second. Prashant Buyyala: We even had wire transfer information, bank account information. “Here, give us the bank account we’ll submit to you know wire you this money by Monday morning.” And over the weekend we’re like: “okay great, this is good, we’re gonna get the money in because everything’s been signed.” And come Monday, the money just didn’t show up. Lee Berger: And then, we went bankrupt. Prashant Buyyala: It’s not to make the studios out to be the bad guys or anything like that. Its just the model of how we have set up this business is flawed. We billed 500 shots say for 10 million dollars or so, and that’s what it is. Lee Berger: We’ll hire up, based on the contract and then sometimes things just change. The making of a movie is not a precise science. There are creative issues in a movie as it’s being done. During the post production process and sometimes even during shooting the movie starts to evolve. Prashant Buyyala: If the movie extends, and we suddenly have to work for three months more or four months more from the studios perspective they paid us 10 million dollars for 500 shots. But, from Rhythm & Hues’ perspective now we’re paying for the same artists for three more months that we have to continue paying their salaries. There is no other source of revenue other than coming out of Rhythm & Hues’ own pocket. John Hughes: So our choices were to cut peoples’ salaries, or to lay off a significant number of people or to work people overtime without paying them for overtime by restructuring their contracts. So those kinds of changes are very difficult changes to make and I felt that any one of those would have so dramatically altered the culture of Rhythm & Hues that they would have destroyed Rhythm & Hues. And, well, you know, instead we’re in bankruptcy. So, I ended up destroying rhythm and hues anyway So, you know maybe I should have done something along those lines in order to have tried to preserve Rhythm & Hues. Prashant Buyyala: We’ve had to chase a price point that’s been dropping very rapidly. And the reason the prices have been dropping quite a bit, or one of the fundamental reasons, really is the tax subsidies that are being provided in Canada and in the UK and other places. If a studio decides there is a 10 million dollar project that they want to take over to say Vancouver, and award it to a Canadian company. The Canadian company will bid it at 10 million dollars, but the studio gets say three million dollars back as a tax rebate So the only way to even get considered for that film is to bid it at 7 million dollars. So we’re now getting less money for the same amount of work. Scott Ross: And so the motion picture studios, told the visual effects facilities, that if you want to get this work, you have to do it in Vancouver, where you’re spending a million, a million five, building a facility there. So then of course what happens is another country or region, state, says oh well that’s a good idea we’ll do that we’ll take our money and we’ll take it from our tax payers and we’ll give that to the movie studios and then of course all those people now go to this other place because what the states and the countries don’t realize is every movie they take a look at what’s the cheapest place? So you move to Vancouver, find a house, live there for about 9 months or a year and then ultimately wind up getting laid off. Barack Obama: Oh, it is good to be in LA. This is one of America’s economic engines, hundreds of thousands of middle class jobs. There is still no better place to make movies and television and music than right here in the Unites States. Entertainment is one of the bright spots of our economy and that means that we’ve got to do what it takes to make sure that this industry and every great American industry keeps that competitive edge. So that more folks can find career paths like many of you have. And get good middle class jobs that allow you to support a family and get ahead Dave Rand: I live the life of what some of my comrades have started a Facebook page called a pixel gypsy. You know, and its not that I’ve never been good enough to land somewhere for the duration, its that there never is a duration. I’ve been on the staff of five visual effects shops that were really well known, did amazing work that all went bankrupt, most of them owing the artists money. You know you’re constantly on the go, chasing which government is going to give the greatest hand-out back to the studios. I’ve taken to just living in hotels the past few years, find it’s a lot simplier. I’ve got suitcases that were designed to fit in the trunk of my car, it all layers in there [bullhorn]: Yay VFX. I’ve got a king sized bed, I’ve got a Jacuzzi in my room I have those little soaps that make me feel like I’m on vacation every day and I love using those little soaps I love the way they feel when you open them up. Rhythm and Hues was like a new girl in my life, I fell in love again, you know what I mean? Then in a Friday meeting I had my heart broken, just like I have a million times and now I’m just this kind of strung out grey haired old bachelor. Matt Shumway: People want to have lives, and families, and houses, just like anybody else. They’re not trying to live rich; they’re just trying to live their lives. And you can’t do that when you have to live in a different city every six months. Because you’re, as the studios chase the tax incentives a group of artists have to follow Lee Berger: I don’t think the studios want the visual effects studios to go out of business, because they have a lot of work that needs to be done. And they want us to be healthy, however, they like any other person that has a job, they’re given a budget they’re given a movie, and you have to do this work for this amount of money. [computerized voice]: Remember this is a fixed bid. You absolutely cannot charge us more than the fixed bid. You said there were some changes to the boards, what vfx are involved? The additional shot has beautiful running footage of a car driving across a salt flats, the car then turns into water, and morphs into seven unique animals, all made of water… but one is made of fire. That may be a little more than we bargained for. This is a fixed bid. Lee Berger: A fixed bid would be, you bid the work, and then no matter what the work is, that’s the price that you get. John Hughes: Film making nowadays is very much a fluid situation, the shots change dramatically you know easily half of the shots that we bid could disappear and be replaced by other shots Lee Berger: You know this is the film making process, and its really difficult to go in and know exactly what you want. Dave Rand: Most construction that you see, most houses, skyscrapers, airports, they’re built on a fixed bid. Which makes sense because there’s a blueprint where everything is laid out, down to like every screw, every I-beam, every piece of glass. Markus Kurtz: People always compare it with building a house, you know if you go to an architect you wanted to make the changes well if you agreed to a plan and you laid a foundation to your house, its going to cost you to rebuild that house. In visual effects it doesn’t work that way because we’re not paid by the hour that we work, we get paid by the completed project. Lee Berger: If shots change, if they are lengthened, if they are shortened, if you add characters, you can ask for an overage. John Hughes: But unless we can prove to the studio that there were additional shots or that there was in fact a very clear change of direction on a part of the director, you know, we just don’t get much in the way of overages Dave Rand: Now we’ve got this fixed price, you know this fixed price bidding model where there’s a fixed price and the director just doesn’t really have to be there. Because the visual effects artists can just do it over. John Hughes: The art of film making seems to have changed a little bit over the years it used to be that you’d have a script and you’d story board it, and you’d have all three acts, and then you’d go out and shoot. But nowadays, they often start shooting without really know what act three is going to be. You know it’s really hard to have a fixed bid and a fixed deadline when the studio and the director haven’t even agreed on act three yet. Jack Fulmer: It’s like getting in the car to drive somewhere and you don’t know where you going. You’re like: “Well, don’t you… do you have enough gas?” “Well I don’t know, I’m just driving!” [laughs] Dave Rand: When you’re creating these huge fluid dynamic simulations like we did on Life of Pi, and they want to change this wave from going that way to this way, or make the rain go completely differently. That’s a lot of simulation time, just to make the change. And then, finally it gets shown to the client who says something like: “why is it even raining in this shot? It’s not supposed to be raining in this shot.” Walt Jones: So now we go back, we do that work that we think we’re supposed to be doing. We present it again, it goes back up through the chain of approvals. The decision maker sees it, and they give their feedback. Then it goes back through the chain the other direction, and we find out whether or not we’re done or we have to keep going. John Hughes: And we understand that if you have a vision and you’re moving toward that vision but as long as you’re moving in the same direction toward that vision that’s fine, you know we’re gonna get there. But what we see often is that you know that they’ll be heading towards a vision and you might be heading toward that vision for six months and then all of the sudden they turn around and they’re heading off in an entirely different direction. Jack Fulmer: If you are not a visionary, or if you don’t have a visionary involved in a project and relies heavily on visual effects it’s not going to succeed. John Hughes: The studios would not permit a director to shoot for a week or two on set and then say tear down the set and build a new set.” You know that simply wouldn’t be tolerated because in the live action portion of filmmaking everything is paid by the hour. Dave Rand: Pretty much everybody who is making everything happen on the movie set it’s by the hour. So the meters running, the focus is dynamic. Because it makes the director and the decision maker whomever that person is, usually it’s the director, has to be there. And there is someone telling him every second what the meter is at. And the creativity just rolls because everybody is so focus and the decision are being made in real time. But when you remove the decision maker from the process, which is what happens in visual effects the artist ends up getting to version 15, 16, 20, 30 and the clients never even seen it yet. You know if the decision maker was wandering amonsth the midst of the visual effects artists like they do the movie set if theres ever a platform where that’s needed, its in visual effects. Lulu Simon: It was a Friday that they told us that our paycheck were gonna be delayed. Walt Jones: John announces to everyone that we’re gonna be late on payroll Matt Shumway: Been here long enough to know that that was the last thing John would ever want to do. And, that’s really when it hit home that you knew how bad it was. Lee Berger: It was like a perfect storm of crap happening all at the same time. Michael Conelly: We’ve come close to hitting a wall in the past, but I think we’ve come close enough times that there was this sense of “things will be okay” and this time was different. Walt Jones: My phone starts ringing at like I don’t know what 8:30, 9:00 o’clock at night. People freaking out, because apparently managers are now calling people and telling them they’re being let go. Amanda Dague: 9PM, Sunday night, all of these posts. Walt Jones: Facebook has probably the best information about what’s going on. Amanda Dague: Just going down the news feed
Walt Jones: You’ve got people being let go at every single level up the chain. You know, from like custodial staff all the way up to you know high end visual effects supervisors. People who have been with the company in some cases for like 17 years. Amanda Dague: It’s completely shock, and then staying up all night, texting, emailing friends, calling friends. Not knowing if I’m about to get a phone call. Mentally preparing for that. Its like, it’s 9 o’clock I’m like how late is it going to go until? Is it midnight? Do I go to bed at midnight? Do I go to bed at 1am? Do I stay up until 2? Walk Jones: Monday morning, we had our coordinators running around. And what they would do is they would go to peoples’ desks see if they were there, or not. If they were there, then they had to find out if they were supposed to be there. Or if they just hadn’t found out, that they’d been cut. Michael Conelly: And that was just like a punch in the stomach. Amanda Dague: Sad, to see all the empty seats. Didn’t get any work done that day. Walt Jones: And the entire time you’re going like well why that person? Why this person? Why is that person still here? Why is this person gone? That guy, that guy was sitting next to me and he’s gone. Why am I still here? Keith Goldfarb: For me, this workplace and this, my job, it’s all about my interaction with other people. My best friends in my whole life I’ve met here at Rhythm. And, people that I’m very attached to, you know, and so it’s very sad. Amanda Dague: I didn’t really expect it to hit me as hard as it did. [Tearfully]: It’s still hard to talk about. Saraswathi Balgam:
I asked him today, I said John how are you doing? And he’s really really sad. He’s very very sad that we’re in bankruptcy he’s really sad about how many people are going to be affected by this. And I feel sad for that. John Hughes: You know we run this company for the people, and then… [Tearfully]: And then to have hurt them so badly, it’s really the antithesis of what we wanted to do. Seth McFarlane: You know 2012 was a great year for movies. Hollywood shattered box office records with 10.8 billion dollars in domestic sales. In fact, studio accounts have never had to work harder to prove nothing made a profit. Bill Westenhoffer: Life of Pi is the most reward experience I’ve had since I’ve started working visual effects. Seth McFarlane: Now this is going to be a big night for some of you people because as we all know winning an Oscar guarantees a long successful career in the industry. Michael Conelly: To have two nominations for the company was incredibly exciting and validating, and on the other hand full of irony. The company was shattering at the same time that all of this recognition was being heaped on us. So the night of the Oscars… what a mess. Lois Anderson: This has been a very dramatic juxtaposition of being up for two Oscars and declaring bankruptcy at the same time. Samuel L. Jackson: And the Oscar goes to… Life of Pi! [Cheers] Bill Westenhoffer: Having worked on this for many years, you know I wanted to thank some people and I thought that was very important. To our director Ang Lee, you are an inspiration and you made it an incredible journey for all of us. Michael Conelly: Everybody has this little bubble, of, hey look at this we did it… and then this odd slap in the face. Bill Westenhoffer: 45 seconds in I started seeing the red flashing light in the back saying you’ve gotta wrap it up. Matt Shumway: And then, when they start playing that stupid Jaws theme it was just, insulting enough I mean, in any other year that might have been actually kind of funny. Bill Westenhoffer: To my children Christopher, Thomas, Alexander and Samantha. Thank you for inspiring me everyday. To my mom and dad, thank you for telling me I could do any crazy career choice I wanted. Finally I want to thank all the artists who worked on this film for over a year, including Rhythm & Hues. Sadly, Rhythm and hues is suffering sever financial difficulties right now. I urge you all to remember… Walt Jones: Bill gets like completely Jaws’ed off stage. Michael Conelly: It was emblematic of something that is wrong with this industry. Lois Anderson: I don’t know how they felt about the protest going on. Maybe they didn’t want anything to be said about that, I really don’t know what was at play. Bill Westenhoffer: If I can get the phrase being sharked into the cultural lexicon, I think that whole experience would have been worth it. Matt Shumway: And then to top it off, you’ve got Claudio the cinematographer and Ang Lee not thanking the people who
really did about 75% of the movie.
Ang Lee: I cannot make this movie without the help of Taiwan, my Indian crew, my Canadian crew Tom [inaudible], Jim [inaudible], Gil Nader, David Womack, David Lee my agent Karen Sage, and lawyer [inaudible], Joe Dipallo… I have to do that. Lois Anderson: Unfortunate is not a strong enough word, but it was.
However look at what it did. It galvanised and entire industry. Bill Westenhoffer: Ironically I think that the fact that my mic got cut off has done better to get the message out to the public than had I actually said it on the stage that night. Walt Jones: It gelled the entire VFX community into being horrifically pissed off at how they were being treated. Jon Meier: It’s a catalyst for the change in this industry, that’s going to put it in the right direction David Begnaud: Hi everyone it’s David Begnaud and this is NewsBreaker. Hop on your social media account and you may be seeing green. People are swapping their profile pictures into green squares, you know, like a green screen. It’s all in solidarity with the Visual effects industry. Teague Chrystie tweets: if you see a bunch of VFX artists with green icons on twitter and Facebook we’re just showing folks what movies look like without us. Walt Jones: We’ve got some fantastic conversation happening. You’ve got people who are getting little green screen pins to wear. Showing that they at least support the idea of having these discussions even if we don’t necessarily at this point have a clear vision of what the answer is. A lot of articles come and out sort of try to go through and figure out okay what went wrong with Rhythm & Hues. Rhythm & Hues had everything going for it, they knew what they were doing. They had international facilities, they were making use of tax incentives, they won and Oscar. What the hell happened? And, no one has any clear answers. Its sort of like every one of these articles just kind of rehashes the same stuff over and over again. VlogginEgan: VFX firms and post houses are like nomads roaming the globe trying to find and economically viable place to be able to work. And it shouldn’t be that way because god damn it you need us. And when I look into this from a perspective of someone who wants to get into the industry and do visual effects work and I’m sitting back and color correcting my own video, or doing a chroma key, and thinking about people not being able to be paid for… it hurts. Scott Squires: If that trend continues, where we continue to do the impossible, and we continue to make things extraordinary in a shorter period of time, and we continue to lose money. The visual effects industry will become extinct. Lee Berger: Every day, things change in this business. It changes like your laptop changes. The technology changes. The economics of the world change. Jack Fulmer: I’ve talked to plenty of people who are so affected by this and so hurt and so distressed that they’re just going to probably go do something else. Keith Goldfarb: I don’t consider going out of business after 25 years of producing what we produced, I don’t consider that a failure. Quite the contrary, I consider it a success. And I think that people need to have a little more appreciation for how difficult it was to stay in business as long as we did. Lee Berger: Visual effects and animation business is a business. It’s show business. And artist, or whatever it is that your vocation is here, its still a business. Jack Fulmer: The people who are artists will always be artists. And no one can ever take that away from you. Right? Nobody can ever say: “Oh, well, we’re gonna shut this business down. So you’re no longer an artist.” No way I’ll always be an artist, you can never take that from me. John Hughes: It’s… it’s the process you have to enjoy what you’re doing. And I did. You know, I enjoyed it very much. [background chatter] Christina Storm: Oh, and I need your badge. [background chatter] Captions by: Hedgehog_International